Page 1

ISSUE 9.1

ALB Special Report: Korea 2009 Big reforms, big opportunities

Banking & finance Is this ’97 all over again?

Higher education

LLMs: Becoming your own Master

The Taiwan question

Building bridges across the Strait

10 firms to watch in 2009

ISSN 0219 – 6875 MICA (P) 165/09/2008

Analysis LATERAL MOVES DEALS ROUNDUP REGION-wide PERSPECTIVES UK, US REPORTS Sign off

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EDITORial >>

Hubris will get us nowhere

T

here is a sense of hubris pervading the Asia-Pacific legal employment market at the moment. Buoyant, resilient, strong, booming are just a few of the adjectives used to describe the current state of the market for legal talent. When questioned on this topic, lawyers, HR managers and recruiters often run out of superlatives with which to describe how strong things are. To be fair, if we use the US and European markets as a yardstick then things in the Asia-Pacific region seem quite rosy. By ALB’s count, October and November alone saw at least 300 lawyers laid off in the US and Europe, and this figure does not include Travers Smith’s announcement that it has canned five lawyers in the UK, DLA Piper’s plans to shed up to 40 consultants in its real estate and finance practices, and Reed Smith retrenching 130 of its own across its transAtlantic operations. But, is this hubris warranted? Is the Asia-Pacific legal market not suffering from the same slow-downs in transactional work as its European and US counterparts? Given the course of the current financial slow-down and the widely accepted fact that this has still not fully reached its disastrous potential, the question, it seems, is not if the Asia-Pacific legal services market will be hit by this wave of redundancies but when. This may be sooner rather than later. The Singapore legal services market, one of the hardest hit by the current financial crisis, was abuzz with rumours that two of the island nation’s most prestigious law firms – a boutique capital markets practice and the other, one of the ‘big-four’ – had already kicked a number of its lawyers to the curb in an effort to reduce costs. Add to this Australian firm Corrs Chambers Westgarth’s proclamation that it had offered its graduates a lump sum payment if they deferred the start of their employment until the second half of next year and Orrick’s culling of ten lawyers in Asia and we see, slowly but surely, signs of things to come. It may only be a matter of time until the financial tensions that arise as a result of the inexorable downturn in staple areas such as M&A and banking & finance become too great an economic burden to bear for small and big firms alike. A more appropriate time for forward planning there has never been. And while we cannot hope to avoid the rolling juggernaut that is the global financial crisis, a lot can be achieved by removing one’s head from the sand.

The Singapore legal services market was abuzz with rumours that two of the island nation’s most prestigious law firms had already kicked a number of its lawyers to the curb in an effort to reduce costs

2

IN THE FIRST PERSON “This time around, we’re seeing

the core business itself in trouble, usually because demand for products has dropped as a result of the economic recession in the US and Europe”

Stephen Eno, Baker & McKenzie, on the differences between the current crisis and the Asian Financial Crisis of 1997 (p50)

“Open [legal] markets are far more

dynamic, much more focused on client service and more globally competitive”

Luke Shin, Kim & Chang, on opening Korea’s legal services sector (p56)

“The Chinese legal market is so competitive, to lead you must have a full service capacity” Zhang Zhi of V&T, on the increasing competitiveness of the Chinese legal market (p44)

ALB ASIAN LEGAL BUSINESS

Asian Legal Business ISSUE 9.1


News | deals>> >> CONTENTS

contents

ALB issue 9.1 54

42 COVER STORY

68

42 ALB Watchlist Some firms will make the headlines in 2009, but not all will make them as regularly as the firms on the ALB Watchlist. ALB discusses strategy and tactics with the 10 firms we predict will be in the ascendant in ’09

ANALYSIS

Regulars

12 China: Enforcement problems and money troubles Why we should all hope that government stimulus works in China

6 •

13 Legal process outsourcing What Obamania means for the future of this burgeoning industry 14 Dubai: Debt dilemmas to derail growth? Questions are being raised about the ability of the Gulf region’s star – Dubai – to fend off the credit crunch in light of its heavy debt obligations

FEATURES 48 Banking & finance As the shadows lengthen over capital markets practices, restructuring and insolvency practices are bathing in the dawn of a new era

• • • • • • • • • • •

28 International arbitration Drew & Napier 29 IP Alban Tay Mahtani & de Silva 36 REGIONAL UPDATES • China Paul Weiss • Philippines SyCip Salazar Hernandez & Gatmaitan • Malaysia Tay & Partners • Singapore Loo & Partners • Indonesia BT Partnership • India Singh & Associates • Vietnam Indochine Counsel

54 ALB Special Report: Korea 2009 Lawyers in Korea remain upbeat, pinning their hopes on internal and external stimuli

22 UK report

64 Higher education: LLMs The perfect way to beat a deflated employment market?

INDUSTRY UPDATES

50 Loo & Partners

26 Competition Alban Tay Mahtani & de Silva

61 Lee & Ko

27 Employment law Freehills

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.

68 Document management It’s about much more than categorising, filing and shredding

4

NEWS Clifford Chance, Freshfields, Bakers on major Chinese gas deal UAE firms anticipate relaxation of foreign investment rules Weil Gotshal to open in ‘over-lawyered’ Dubai India benefits from legal market restrictions Taiwan-mainland China centre to provide legal advice for Taiwan investors White & Case cuts Bangkok office US: Managing partner in fraud case Unwinding minibonds in Singapore Indian PE lawyers hit hard, says FML lawyer Orrick lays off Asia lawyers Korean lawyers turn tables on judges BHP-Rio Tinto merger, lawyers still optimistic Clifford Chance, WongPartnership to part ways

16

24 US report

PROFILES

ALB ASIAN LEGAL BUSINESS

Asian Legal Business ISSUE 9.1


NEWS | deals >>

deals in brief | Singapore | ►► Hua San crude carrier financing Value: Undisc. Firm: Stephenson Harwood & Lo Lead lawyer: Martin Green Client: ING Bank N.V. • Deal involved financing of Hua San, largest vessel by weight ever to be built in China • ING Bank N.V. acted as agent for international lenders to holding company Xihe Holdings

| China | ►► China Everbright Ltd– ALAM stake acquisition

| korea |

US$0.85m Firm: Bryan Cave Lead lawyers: Chris Lause, Evan Chuck Client: ALAM • Deal involved China Everbright Ltd’s acquisition of a 5% controlling interest in private equity company ALAM • Acquisition gives China Everbright addition of ALAM which posted US$100bn of assets last year; target is now positioned to take advantage of opportunities arising from economic uncertainty, said firm

| KOREA | ►► Heraeus–Saint-Gobain Quartz acquisition US$1,500m

►► Lifetime Studios Korea–Willmake assets acquisition

Firm: Wilson Sonsini Goodrich & Rosati Lead lawyer: Selim Day Client: Lifetime Studios Korea Firm: Ahn & Chang Client: Willmake Ltd • Deal involved Lifetime Studios Korea acquisition of Willmake asset Roiworld.com, gaming brand and dress-up site for Korean teens, through asset transfer

Firm: Kim & Chang Lead lawyer: Kyung-Tae Kim Client: Heraeus Firm: Hwang Mok Park Client: Saint-Gobain Advanced Materials Korea Firm: DLA Piper Client: Saint-Gobain Quartz Limited • Deal involved Heraeus purchase of portions of Saint-Gobain Quartz’s global business, including its Korean subsidiary • Acquisition includes three former Saint-Gobain Quartz locations in Korea, Japan and United Kingdom, as well as sales activities in North America

6

• KPF will hold 51% stake in JV, holding the remainder by investing US$10m

US$3m Firm: Kim & Chang Lead lawyer: Jong Koo Park Client: Lifetime Studios Korea

| KOREA | ►► ronics–Korea Parts & Fasteners Co JV US$22m Firm: Kim & Chang Lead lawyer: Hyun Ho Eu Client: Plextronics Inc Firm: Sojong Partners Client: Korea Parts & Fasteners Co • Deal involved establishment of KNP Energy, a joint venture between Plextronics and Korea Parts & Fasteners (KNP) • JV involves production line to

| INDIA |

develop solar technology, processes involving photovoltaic fabrication

| japan/UK | ►► Charterhouse Capital Partners LLP–Lucite International Group acquisition US$1,600m Firm: Hammonds Lead lawyers: James McKay, Mark Robson Client: Lucite International Group Firm: Macfarlanes Lead lawyers: John Dodsworth, Matthew Blows Client: Mitsubishi Rayon Co

►► SKS Microfinance Private Limited investment US$75m Firm: Nishith Desai Associates Lead lawyer: Amrita Singh Client: ICP Holdings, Sandstone Investment Partners • Sandstone Investment Partners, ICP Holdings and Kismet SKS II made an aggregate investment of US$75m in SKS Microfinance. Financing led by Sandstone, an India-focused fund

| INDIA | ►► Emami–Zandu Pharmaceutical Works share acquisition Value: Undisc Firm: Kanga & Company Lead lawyers: Ashish Bhakta, ML Bhakta Client: Emami

Firm: Paul, Weiss, Rifkind, Wharton & Garrison Lead lawyers: Tarun Stewart, Toby Myerson Client: Mitsubishi Rayon Co • Mitsubishi Rayon Co and UK-based private equity firm Charterhouse Capital Partners entered agreement in acquisition of Lucite International Group shares in cash

Firm: AZB & Partners Lead lawyers: Shuva Mandal, Zia Mody Client: Zandu Pharmaceutical Works Limited

• Transaction subject to regulatory approval in various jurisdictions, including Europe, the US and China, and will be financed by The Bank of Tokyo Mitsubishi UFJ Ltd. Date of close before 30 June 2009

• Prior to acquisition, Zandu promoters were engaged in litigation to ward off takeover attempt. Litigation included proceedings before Company Law Board, Securities Appellate Tribunal and the High court of Bombay

• Emami Limited acquired around 27.5% shares in The Zandu Pharmaceutical Works Limited

Asian Legal Business ISSUE 9.1


NEWS | deals >>

| JAPAN/INDIA | ►► NTT DOCOMO–Tata Teleservices investment US$2,700m Firm: Khaitan & Co Lead lawyer: Upendra Joshi Client: NTT DoCoMo Inc Firm: Skadden Arps Lead lawyers: Upendra Joshi, Keigo Yamaguchi, Khaitan & Co Michael Mies, Nobuhisa Ishizuka Client: NTT DoCoMo Inc Firm: AZB & Partners Lead lawyers: Abhijit Joshi, Zia Mody Client: Tata Teleservices

►► Your month at a glance Firm

Jurisdiction

Deal name

Ashurst

Indonesia

Salamander Energy, Murphy Overseas Ventures oil exploration bid

AZB & Partners

India/Japan

NTT DOCOMO - Tata Teleservices investment

AZB & Partners

India

Emami -Zandu Pharmaceutical Works share acquisition

Baker & McKenzie

China/Turkemenistan

Central Asia - China pipeline project

Bryan Cave

China

China Everbright Ltd - ALAM stake acquisition

Clifford Chance

China/Turkemenistan

Central Asia - China pipeline project

DLA Piper

1,100 0.85 1,100

Energy & resources M&A Energy & resources

307

Equity market Investment funds

Hong Kong/Japan

Rain Fall film financing

Korea

Heraeus - Saint-Gobain Quartz acquisition

F Zimmern & Co

Hong Kong/Japan

Rain Fall film financing

Freshfields Bruckhaus Deringer

Japan

Siemens AG - Fujitsu Siemens Computers

UAE

Lamprell plc stock exchange listing

China/Turkemenistan

Central Asia - China pipeline project

Fried, Frank (in assoc with Huen Wong & Co.)

China/Hong Kong

Chow Tai Fook Group - Peace Mark acquisition

Hammonds

Japan/UK

Hwang Mok Park JSM

Undisc.

Finance

1,500

M&A

154

M&A

Undisc. 565 Undisc. 1,100

Finance M&A Finance Energy & resources

65

M&A

Charterhouse Capital Partners LLP - Lucite International Group acquisition

1,600

M&A

Korea

Heraeus - Saint-Gobain Quartz acquisition

1,500

M&A

China

Dah Chong Hong Holdings - Silver Precious International acquisition

18

M&A

Kanga & Company

India

Emami -Zandu Pharmaceutical Works share acquisition

Undisc.

M&A

Khaitan & Co

India/Japan

NTT DOCOMO - Tata Teleservices investment

2,700

M&A

India

Blackstone Group - CMS Computers investment

KhattarWong & Partners

Singapore

Safe Step Group - King’s Safetywear offer

66

M&A

Kim & Chang

Korea

Plextronics - Korea Parts & Fasteners Co JV

22

Finance

Korea

Snow Peak - C&C Korea acquisition

Korea

Heraeus - Saint-Gobain Quartz acquisition

Korea

Lifetime Studios Korea - Willmake assets acquisition

US$60m

Firm: SJ Berwin Lead lawyer: Mark Mallon Client: Kajima

M&A

250

• In addition, DOCOMO expects to acquire up to 20% of shares in Tata Teleservices Maharashtra through joint tender offer with Tata Sons

►► Kajima–Nomura JV

M&A

Natural Beauty Bio-Technology privatisation

Speymill Macau Property Company - AIA Tower purchase

| JAPAN |

Energy & resources

Grosvenor - Vega Property Group JV

Hong Kong

• Khaitan & Co advised on investment structures and Indian law including, aspects of the foreign investment and corporate laws

2,700

Deal type

Hong Kong

DSL Lawyers

• Skadden has had a longstanding relationship with NTT DOCOMO and has advised on several strategic investments in recent years

Undisc.

Hong Kong

• NTT DOCOMO will acquire 26% Tata Teleservices common shares

• Deal marks entry of the Japanese giant into world’s fastest-growing telecom market, which reportedly has three times more subscribers than Japan

Value(US$m)

Undisc.

Equity market

Undisc.

M&A

1,500

M&A

Undisc.

M&A

Firm: Linklaters Lead lawyers: Christopher Coombe, Jonathan Evans Client: Nomura Holdings

King & Wood

China

Jiangxi Copper Bond Issue

Lee & Lee

Korea

United Technology Holdings listing

Singapore

W.C. Heraeus GmbH - Kulicke & Soffa Industries unit acquisition

• Kajima Properties entered JV with Nomura Real Estate UK

Linklaters

Japan

Kajima - Nomura JV

Linklaters Allen & Gledhill

Singapore

Singapore Airport Terminal Services-Singapore Food Industries stake acquisition

Lovells

Indonesia

Salamander Energy, Murphy Overseas Ventures oil exploration bid

Luthra & Luthra

India

GMR Kamalanga project

1000

Construction/ finance

Macfarlanes

Japan/UK

Charterhouse Capital Partners LLP - Lucite International Group acquisition

1600

M&A

• Kajima and Nomura have also established a parallel joint venture for the purpose of providing strategic management advice and recommendations to the trustees of the JPUT. Operational property management will be provided by Kajima www.legalbusinessonline.com

995

Finance

10

Finance

165 60 285 Undisc

M&A Banking M&A Energy & resources

7


NEWS | deals >>

| japan | ►► Siemens AG–Fujitsu Siemens Computers US$565m Firm: Freshfields Bruckhaus Deringer Lead lawyers: Christopher Bown, David Taylor, David Aitman Client: Siemens AG • Siemens AG sold 50% share in JV with Fujitsu Siemens Computers to Fujitsu Ltd. The purchase price is approx €450m

“While other countries in Asia have used similar forms of international film financing in the past, this is one of the first for Japanese movies. Our team helped Standard Chartered Bank Hong Kong successfully accomplish a sophisticated Western financing method and ensure it was adapted to local law and industry standards” Michael Leow, Vasco Da Gama

• Freshfields advises Siemens on a regular basis in Germany as well as in relation to a wide range of international projects taking place in various jurisdictions including Spain, Italy, India, Russia and France

| UAE | ►► Lamprell plc stock exchange listing Firm: Freshfields Bruckhaus Deringer Lead lawyer: Bruce Embley Client: Lamprell plc • Dubai-based Lamprell admitted to the London Stock Exchange’s main market for listed securities • Freshfields previously advised Lamprell on its admission to London’s AIM market in October 2006, the first London IPO by a company based in the United Arab Emirates

| HONG KONG /JAPAN | ►► Rain Fall film financing Value: Undisc.

Firm: F Zimmern & Co Client: Distribution Workshop Firm: Vasco Da Gama Offices Lead lawyers: Michael Leow, Suresh Khilani, Elaine Cotter Client: Rain Fall Limited Liability Partnership Firm: DLA Piper Client: Standard Chartered Bank • Deal involves financing of film “Rain Fall”, one of the first Japanese film productions to use Western style financing including completion bond • Standard Chartered Bank HK offered a discounting facility and a gap financing facility for the film’s production.

8

| CHINA/HONG KONG | ►► Chow Tai Fook Group– Peace Mark acquisition US$65m Firm: Fried, Frank, Harris, Shriver & Jacobson (in association with Huen Wong & Co) Lead lawyers: Joseph Lee, Richard Steinwurtzel, William Yoo Client: Chow Tai Fook Group • Chow Tai Fook Joseph Lee, Group acquired Fried Frank Peace Mark’s luxury watch retail network • Peace Mark is in provisional liquidation and has undergone debt restructuring • Reportedly first and largest cross-border corporate rescue and restructuring in China/Hong Kong announced and completed since the financial turmoil

| CHINA/HONG KONG | ►► United Technologies–GST acquisition US$247m

Firm: Walkers Client: GST Holdings

• Deal involves refinancing of 1,000 MW gas-fired Santa Rita power project in the Philippines

Firm: Woo Kwan Lee & Kwan Client: United Technologies

• Deal signed on 11 November 2008 and funded on 14 November 2008. Funding covered commercial tranche and an uncovered commercial tranche representing US$500m of new financing, and HERMES covered tranche of US$44m from the original project debt in 1997

Colin Law,

• United O’Melveny Technologies Far East Limited bid to acquire GST’s outstanding shares and options, other than the shares it already holds • The offer price was HK$3.38 per ordinary share and HK$0.58 per outstanding option • The GST Controlling Shareholder, GST International Management Ltd (GSTI), owning 53.43%, has agreed to accept bid • Bid is subject to regulatory approvals, including PRC antitrust filings. Also, bid relies on at least 90% of disinterested shares in GST, which would allow UTFE to privatise GST

| PHILIPPINES/SINGAPORE | ►► Santa Rita power project refinancing

• Eight mandated lead arrangers: BTMU, Calyon, HVB Unicredit, ING, KfW, Maybank, SocGen and Standard Chartered

| KOREA | ►► Snow Peak–C&C Korea acquisition Firm: Kim & Chang Lead lawyer: Yong-Kap Kim Client: Snow Peak • Japanese sporting goods company Snow Peak Inc acquired C&C Korea • Transaction structured as a purchase of assets and assumption of liabilities

US$544m

Firm: O'Melveny & Myers Lead lawyers: Colin Law, Nathan Bush, Peter Chen Client: GST Holdings

Firm: Paul Hastings Janofsky & Walker Lead lawyer: Patricia Tan Openshaw Client: First Gas

Firm: Herbert Smith Client: United Technologies Lead lawyer: Ashley Alder

Firm: Shearman & Sterling Lead lawyer: Bill McCormack Client: Lead arrangers Asian Legal Business ISSUE 9.1


NEWS | deals >>

| KOREA | ►► United Technology Holdings listing

►► Your month at a glance (cont) Firm

Jurisdiction

Deal name

Makes & Partners

Indonesia

Sarana Menara Nusantara - Profesional Telekomunikasi share acquisition

53

M&A

Milbank Tweed Hadley & McCloy

Indonesia

Sarana Menara Nusantara - Profesional Telekomunikasi share acquisition

53

M&A

Mulla & Mulla & Craigie Blunt & Caroe

India

GMR Kamalanga project

Nishith Desai Associates

India

SKS Microfinance Private Limited investment

US$10m Firm: Lee & Ko Lead lawyers: Wonkyu Han, Wonsik Choo Client: Daewoo Securities and United Technology Holdings Company Limited • Listing of United Technology Holdings Company Limited on the Stock Market Division of Korea Exchange (KRX) • Reportedly first successful listing of a Hong Kong company on the KRX. Currently a total of only four nonKorean companies have been listed on KRX. (The other three companies are all companies established in the Cayman Islands.) • Lee & Ko coordinated questions, documentation requests and responses between the clients and the KRX

| SINGAPORE | ►► Safe Step Group–King’s Safetywear offer US$66m

India/Singapore

Frasers Hospitality - Skyline, Group agreement

Orrick, Herrington & Sutcliffe

China/Greece

COSCO Piraeus pier development

Paul, Hastings, Janofsky & Walker LLP

Philippines/Singapore

Santa Rita power project refinancing

Korea

Paul, Weiss, Rifkind, Wharton & Garrison

Japan/UK

Rajah & Tann

Singapore

Value(US$m)

1,000

Deal type

Construction/ finance

75

Finance

Undisc.

Finance

6,600

Shipping

544

Finance

Dong-A Pharmaceutical IP breach defence

100

Litigation

Charterhouse Capital Partners LLP - Lucite International Group acquisition

1,600

M&A

W.C. Heraeus GmbH - Kulicke & Soffa Industries unit acquisition

165

M&A

Singapore

ETLA Limited - ElectroTech Investments proposed merger

20

M&A

Shearman & Sterling

Philippines/Singapore

Santa Rita power project refinancing

Simmons & Simmons

UK/Qatar

Qatar Investment Authority - Chelsfield Partners investment

SJ Berwin

Japan

Kajima - Nomura JV

UK/Qatar

Qatar Investment Authority - Chelsfield Partners investment

Undisc.

Hong Kong/Japan

Sumitomo Mitsui Banking Corporation - Bank of East Asia business alliance

Undisc.

Hong Kong

Natural Beauty Bio-Technology privatisation

India/Japan

NTT DOCOMO - Tata Teleservices investment

Skadden

Firm: KhattarWong & Partners Lead lawyer: Yang Eu Jin Client: King's Safetywear

544 Undisc. 60

307 2,700

Finance Equity market Banking Equity market

Equity market M&A

Firm: WongPartnership Client: Safe Step Group

Sojong Partners

Korea

Plextronics - Korea Parts & Fasteners Co JV

22

Finance

Soewito Suhardiman Eddymurthy Kardono

Indonesia

Sarana Menara Nusantara - Profesional Telekomunikasi share acquisition

53

M&A

• Investment holding company Safe Step Group made cash offer for King’s Safetywear

SPX Corporation

Korea

SPX Korea - Sein ESP acquisition

1

M&A

Stephenson Harwood & Lo

Hong Kong

Speymill Macau Property Company - AIA Tower purchase

154

M&A

Singapore

Hua San crude carrier financing

Indonesia

Sarana Menara Nusantara - Profesional Telekomunikasi share acquisition

Singapore

Singapore Airport Terminal Services-Singapore Food Industries stake acquisition

Vasco Da Gama Offices

Hong Kong/Japan

Rain Fall film financing

Undisc.

Finance

Widyawan & Partners

Indonesia

Salamander Energy, Murphy Overseas Ventures oil exploration bid

Undisc.

Energy & resources

Wilson Sonsini Goodrich & Rosati

Korea

Lifetime Studios Korea - Willmake assets acquisition

Undisc.

M&A

WongPartnership

Singapore

Safe Step Group - King’s Safetywear offer

66

M&A

Singapore

Singapore Airport Terminal Services-Singapore Food Industries stake acquisition

285

M&A

Yulchon

Korea

KEXIM container vessel financing

Zhong Lun

China

NPEA - Qiaolian Group investment

Zul Rafique & Partners

Malaysia

Newcastle University Medicine Malaysia development

Yang Eu Jin, KhattarWong

• Offeror was funded by Navis Fund V, LP

| HK/JAPAN | ►► Sumitomo Mitsui Banking Corporation–Bank of East Asia business alliance Value: Undisc. Firm: Skadden Lead lawyers: Mitsuhiro Kamiya, Nicholas Norris Client: Sumitomo Mitsui Banking Corporation • Deal involves business alliance between Sumitomo Mitsui Banking Corporation and Bank of East Asia www.legalbusinessonline.com

Stamford Law Corporation

Undisc.

Finance

53

M&A

285

M&A

Undisc. 70 Undisc.

Finance Equity market Construction

9


NEWS | deals >>

• The agreement sets out framework for both parties' codevelopment of business potential in mainland China, Hong Kong, Japan and other countries where both operate

| INDIA |

• King & Wood acted as legal counsel to the underwriter China International Capital Corporation Limited in this issuance • Aggregate amount issued bonds is RMB6.8bn and the expected total amount of the proceeds raised by the exercise of all related warrants will not exceed that amount

►► GMR Kamalanga project US$1,000m

Firm: Luthra & Luthra Lead lawyers: Pranjal Bora, Sameen Vyas Client: GMR Energy Firm: Mulla & Mulla & Craigie Blunt & Caroe Client: SEPCO Electric Power Construction Corporation • Deal involves construction of 1,050 MW coal-based power plant in the State of Orissa • GMR Kamalanga project is expected to be first merchant power plant in India to achieve financial closure • Law firm Luthra was involved in drafting and negotiation of the EPC contracts for the project

| india | ►► Blackstone Group–CMS Computers investment

| INDONESIA | ►► Salamander Energy, Murphy Overseas Ventures oil exploration bid Firm: Lovells Lead lawyer: Brad Roach Client: Murphy Overseas Ventures, Salamander Energy Firm: Ashurst Client: PT Kutai Timur Resources

a three-year work commitment comprising 3D seismic survey, drilling of exploration well • Deal follows major changes proposed to Indonesian mining laws to boost sector

| indonesia | ►► Sarana Menara Nusantara–Profesional Telekomunikasi share acquisition US$53m Firm: Stamford Law Corporation Lead lawyers: Deepa Darji, Lean Min-tze, Susan Kong Client: PT Sarana Menara Nusantara Firm: Soewito Suhardiman Eddymurthy Kardono Client: PT Sarana Menara Nusantara

Brad Roach, Lovells

Firm: Widyawan & Partners Client: Salamander Energy • UK-listed Salamander Energy and US-based Murphy Overseas Ventures bid successfully for oil and gas exploration rights in Indonesia • Salamander Energy was granted a 49% interest in the South East Sangatta PSC in East Kalimantan, Indonesia, including

Firm: Milbank Tweed Hadley & McCloy Client: Profesional Telekomunikasi Indonesia Firm: Makes & Partners Client: Profesional Telekomunikasi Indonesia • P.T. Sarana Menara Nusantara acquired 100% issued share capital of P.T. Profesional Telekomunikasi Indonesia for US$53.3m

| CHINA/GREECE | ►► COSCO Piraeus pier development US$6,600m Firm: Orrick, Herrington & Sutcliffe Lead lawyer: Christopher Stephens Client: COSCO Pacific

Chris Stephens, Orrick

• Global container terminal operator COSCO Pacific secured concession agreement with Piraeus Port Authority to develop and operate Piers 2 & 3 at port of Piraeus in Greece • Signing of concession agreement at official ceremony in Greek Prime Minister's office and was witnessed by Greek PM and President Hu Jintao on 25 November 2008 in Athens

| SINGAPORE | ►► W.C. Heraeus GmbH– Kulicke & Soffa Industries unit acquisition US$165m Firm: Rajah & Tann Lead lawyers: Kala Anandarajah, Regina Y Liew Client: Kulicke & Soffa Industries

Value: Undisc. Firm: Khaitan & Co Lead lawyers: Haigreve Khaitan, Rabindra Jhunjhunwala Client: Blackstone Group • Blackstone Group acquired 55% majority stake in Mumbaibased CMS Computers and set up company through IT infrastructure management and outsourced business services divisions of CMS Computers

| CHINA |

“There have been a number of changes in the bidding procedures for direct award and regular tender blocks in Indonesia, including the terms of the model Production Sharing Contract” Brad Roach, Lovells

►► Jiangxi Copper Bond Issue US$995m

Firm: King & Wood Client: China International Capital • Jiangxi Copper Company publicly issued convertible corporate bonds with detachable warrants at the Shanghai Stock Exchange

10

Asian Legal Business ISSUE 9.1


NEWS | deals >>

Firm: Lee & Lee Client: W.C. Heraeus GmbH • Kulicke & Soffa Industries sold its wire business unit to German metals and technology group W.C. Heraeus • Deal also needed clearance from the Competition Commission of Singapore

| singapore | ►► Singapore Airport Terminal Services– Singapore Food Industries stake acquisition US$285m Firm: Stamford Law Corporation Lead lawyers: Lean Min Tze, Susan Kong, Marilyn Goh Client: Singapore Food Industries Limited Firm: Linklaters Allen & Gledhill Client: Singapore Airport Terminal Services Firm: WongPartnership Client: Temasek Holdings • Singapore Airport Terminal Services is acquiring Temasek Holdings’ 69.68% stake in listed Singapore Food Industries

in a special purpose vehicle of CVC Asia Pacific (the holding company of NBBL after completion of the privatisation)

| India/Singapore | ►► Frasers Hospitality– Skyline Group agreement Value: Undisc. Firm: Nishith Desai Associates Client: Frasers Hospitality • In strategic growth plan, Frasers Hospitality signed contracts with Skyline Group and Minerva Group to open Frasers Serviced Apartments in Bangalore • Contracts were signed in Bangalore in presence of Singapore Finance Minister

| UK/Qatar | ►► Qatar Investment Authority–Chelsfield Partners investment Value: Undisc Firm: SJ Berwin Lead lawyer: Peter Anderson Client: Chelsfield Partners

• Upon completion of the acquisition, SATS is required under the Singapore Code on Takeovers and Mergers to make a mandatory cash offer for all the remaining SFI shares that are not already owned, controlled or agreed to be acquired by SATS

Firm: Simmons & Simmons Lead lawyers: Ania Rontaler, Colin Leaver Client: Qatar Investment Authority

| Hong Kong |

• QIA gained two seats on the management board of Chelsfield

• Qatar Investment Authority acquired 20% investment in property group Chelsfield Partners for an undisclosed sum

►► Natural Beauty BioTechnology privatisation

| China |

US$307m Firm: Skadden Lead lawyers: David Yun, Jamii Quoc, Nicholas Norris Client: Citigroup Firm: Clifford Chance Client: CVC Asia Pacific • First takeover in Hong Kong by a private equity firm since the recent global financial crisis • CVC Asia Pacific privatised Natural Beauty Bio-Technology Limited through scheme of arrangement. Consideration offered is an alternative between cash and cash plus ordinary and preference shares www.legalbusinessonline.com

►► NPEA–Qiaolian Group investment US$70m Firm: Zhong Lun Lead lawyers: Anthony Zhao, Luke Zhang Client: NPEA • Wuxi Qiaolian Group, manufacturer of wind power equipment and metallurgical machinery, closed investment from five investors, coled by Avenue and NPEA • The Zhong Lun team provided crossborder legal services

“China is on friendly terms with the countries in [Central Asia] and these countries welcome significant investments from China. As these deals are strategically important to China, we will continue to see not only substantial equity investments from Chinese investors in the energy sector of these countries, but also substantial financing from PRC banks for these projects” Barry Cheng, Bakers

| Hong Kong | ►► Speymill Macau Property Company–AIA Tower purchase

| CHINA/TURKMENISTAN | ►► Central Asia–China pipeline project US$1,100m Firm: Baker & McKenzie Lead lawyer: Barry Cheng Client: Borrower Firm: Clifford Chance Lead lawyer: Geraint Hughes Client: China Development Bank

Barry Cheng, Baker & McKenzie

Firm: Freshfields Bruckhaus Deringer Lead lawyer: Robert Lonergan Client: Uzbek sponsor • Development of 1,818km pipeline to deliver 30 billion cubic metres of natural gas from Central Asia to China • China National Petroleum Corporation also signed agreements with Uzbekistan and Kazakhstan giving 50% stakes in deal

US$154m Firm: DSL Lawyers Lead lawyers: Carlos D Simões, David Silva Lopes Client: Speymill Macau Property Company

Pamela Chu, Stephenson

Firm: Harwood & Lo Stephenson Harwood & Lo Lead lawyer: Pamela Chu Client: Speymill Macau Property Company • Speymill Macau Property Company plc purchased AIA Tower in Macau, signed and completed in September • The deal involved the acquisition of the offshore and Macanese companies that own AIA Tower, plus the refinancing of an existing mortgage by arranging a new loan with a local bank • According to the law firm, the professional relationship between SHL and clients Speymill Macau goes back more than 20 years, with deals ranging from company incorporations and listings in Europe to large-scale property transactions in Asia

►► Corrections On page 8 ALB issue 8.11, in the deal entitled ‘Actis–Teknicast acquisition’, ALB mentioned ‘Lee Taylor of White & Case’. This should have read Lee Taylor of Clifford Chance. On page 36 ALB issue 8.11, in the ALB Hong Kong Law Awards article, ALB listed ‘Taiwan Deal Firm of the Year – Lee & Li’. This should have read Taiwan Deal Firm of the Year – Tsar & Tsai. On page 28 ALB issue 8.10, in the Appointments section, ALB mentioned ‘Daniel Lee leaving IBM Korea’. This should have read Daniel Lee leaving Kim & Chang.

11


NEWS | analysis >>

ANALYSIS

Enforcement problems and capital withdrawals: Just another day for lawyers in China

I

t might be a well known fact that China’s IPO market has ground to a halt over the last few months, but according to Audrey Lee at Paul Hastings in Hong Kong at least, what is novel is that the foreign investors who invested in Chinese property companies hoping to get on the IPO gravy train are now falling all over themselves to get their investments out as the country’s property market teeters on the brink of collapse. Lee says that these pre-IPO financiers – private equity, hedge and sovereign wealth funds, rich individuals and companies who bought convertible bonds from developers who were planning offerings in Hong Kong – have been left with illiquid holdings in struggling firms and face developers who are unable to pay them back. Abandoned listings such as Evergrande Real Estate Group, Glorious Property, Star River Group and Hengda Real Estate, which together hoped to raise US$6bn, are cases in point.

According to Reuters, players such as US hedge fund giants Stark Capital, Och-Ziff Capital Management Group and Citadel Investment Group are all said to have taken part in preIPO financing. But investors are not taking developers to court, Lee said. Rather, they are restructuring deals and demanding tighter controls, oversight, transparency and full-recourse guarantees from developers. “China is still by and large an untested market for enforcement,” Lee told Reuters. “Most investors are taking a long-term view of the China real estate market, preferring restructuring and finding ways to allow the companies to continue to operate.” According to Lee, some investors were not below asking property companies to bring in more investment, either from sovereign wealth funds or cash-rich companies. Whether this is tenable over the long term remains to be seen. Not only are funds

►► China: Withdrawn IPOs (1Q–3Q 2008) Name

Sector

Changsheng China Property

Property

145 Withdrawn

China Pacific Insurance

Financial

1,000 Withdrawn

Type

E-Land Fashion China

Retail

Evergrande Real Estate Group

Property

GCL Silicon Technology

Solar power

Longfor Real Estate

Property

SFK Construction Holdings

Construction

Wah Kwong Maritime Transport

Shipping

Wing Fat Printing

Manufacturing

100 Withdrawn

Xiashun Aluminium Foil

Manufacturing

200–300 Withdrawn

Source:FinanceAsia

12

Value (US$m)

300 Withdrawn 2,100 Withdrawn 750 Postponed 1,000 Postponed 150 Withdrawn 100–150 Withdrawn

understandably wary, but it is widely considered that consumer confidence (along with investor appetite) in the country’s real estate sector will hit new lows in the first quarter of next year.

Stimulus package good news for legal sector

China’s US$570bn stimulus package is expected to increase legal work as the government injects investment into the property market, according to local lawyers. “It is good news,” said Tom Chau, a partner based in Herbert Smith’s Beijing office. “We expect to see an increase in deals as the government begins investing in the infrastructure sector. One would also expect that such investment will generate new opportunities in other related sectors such as logistics, construction and consulting. With these new opportunities, we expect that there will be an increase in the need for legal work.” Following the announcement of the package, stock markets in Asia soared on the expectation that Chinese demand for commodities will boost relations in the region. Chau said that more cross-border transactions are likely to occur, as large-scale investments often require international experts and service providers. “Legal documentation is needed to regulate the relationship of participants. It is expected that the need for legal advice will not be confined to only one or two jurisdictions, but will spread across different jurisdictions, including those in Asia,” he said. The global financial crisis is also boosting outbound M&A deals, as Chinese companies take advantage of low valuations and buy up distressed foreign companies. China Life and China Mobile have been aggressive in Asian Legal Business ISSUE 9.1


NEWS | analysis >>

news in brief >>

their hunt for global acquisitions. China Life’s chief investment officer has said that M&A opportunities are becoming “more and more obvious”, undoubtedly due to the plummeting share prices of overseas insurance companies. Chau advises investors to be cautious and adopt more stringent and detailed legal documentation to minimise legal risks. But he also agrees that we’re likely to see an end to China’s exportdriven economic dependence. “The Chinese economy has been changing from an export-driven economy to a more diverse economy, and we expect such a trend to continue in the foreseeable future,” said Chau. “The global financial crisis may accelerate such changes.” ALB

ANALYSIS

Obama against

legal process outsourcing?

W

hat does Barack Obama’s presidential victory mean for the future of legal process outsourcing (LPO)? This has been the foremost issue for many in the outsourcing business. Law firms and in-house counsel could be affected by the potential implications of an Obama policy that will seek to curb tax breaks on companies that outsource, but mostly it could affect relations with India, which is one of the world’s biggest sources of LPO services. “I will stop giving tax breaks to companies that ship jobs overseas, and I will start giving them to companies that create good jobs right here in America,” said Obama in a speech in August. As yet, what the future president will do remains uncertain, and the outsourcing industry remains positive. “We don’t know whether PresidentElect Obama is against outsourcing or not,” said Ben Trowbridge, CEO of outsourcing firm Alsbridge, which handles LPO services. “What he is against, and the position he took during his campaign, is American companies ‘shipping jobs overseas’.” This could potentially implicate American law firms and in-house counsel outsourcing work to law

www.legalbusinessonline.com

graduates in India. But Obama’s stance is not set in stone, says Trowbridge. “Comments like this made during election campaigns are often forgotten quickly after the election,” said Trowbridge. “Going forward, a Democrat-controlled White House and Congress could conceivably play a role in slowing the trend down, but not stopping it, as it is fundamentally against our free enterprise system to prevent companies from sourcing from the most effective location.”

“As long as there are countries capable of providing labour to produce that output at a lower cost than highwage American workers, the use of offshore outsourcing will continue unabated”

KhattarWong’s new tie up “synergistic” KhattarWong has continued its regional expansion by means of an association with Hong Kong firm Alan Lam, Yam & Pe, a tie up that the firm is looking to register with the Hong Kong Law Society. The collaboration will see the firms working on cross-border Tan Chong Huat, KhattarWong transactions, referring legal work and managing work generated by KhattarWong’s corporate advisory company in Hong Kong. “We believe the move will create for KhattarWong an even keener competitive edge for the months ahead as we make further inroads into the Hong Kong and PRC markets,” said managing partner Tan Chong Huat. The firm has undergone an aggressive expansionary strategy in the last year, which has seen a merger with Singapore law firm Hee Theng Fong & Co to expand its China presence, the opening of a Vietnam office, a cooperation agreement with Malaysian law firm K K Chong & Company and Thai legal group Chavalit Law Group, and membership of international law association Interlex, announced in October. A quarter of law firms admit to losing confidential data About 24% of UK law firms have admitted to misplacing at least one mobile device containing confidential documents, a recent survey found. IT company CREDANT Technologies interviewed 100 small to medium sized UK law firms and revealed that lawyers were about as “clueless” as other professionals when it came to respecting client confidentiality. Over 90% of lawyers surveyed believed their data was protected because they secured it with a password, one third protected information with encryption, and 4% did not use any security at all. In addition to this, 37% of respondents believed that if they lost their mobile a hacker or identity thief could access the data. Only 13% had lost a mobile and were confident it could not be breached or used against them because they had encrypted the data.

Ben Trowbridge, Alsbridge 13


NEWS | analysis >>

The policy could also prove unpopular during the current financial crisis, which has been compelling firms (as reported in ALB last month) and in-house counsel from major companies to outsource work as a cost-cutting exercise. “The current economic climate is forcing companies to find more ways to manage spending, and outsourcing is a time-tested and appropriate decision,” said Trowbridge. “It is a catalyst for review of spending, organisation and use of capital. For every company that chooses to keep business functions in-house because of social backlash or political threats, there is another one who finds that the financial and organisational benefits are compelling enough to move non-core functions out of their company and offshore. The disparity between wage costs in the US and in leading offshore countries for similar jobs, output and quality is far too great to simply dismiss, especially when American CEOs have a fiduciary responsibility to shareholders.” Some of the major law firms to have invested in outsourcing in India include Clifford Chance and Eversheds. According to research firm ValueNotes, LPO is growing at a rate of over 40% every year. Law firms are not the only ones seeking outsourcing services. LPO companies are reporting that most of their client base consists of in-house legal departments in major corporations. In-house departments can breathe a sigh of relief as, according to Ganesh Natarajan, president of outsourcing trade body Nasscom, there are no specific tax breaks afforded to American companies offshoring work, which means Obama could only provide incentives to firms that invest in jobs locally. Despite Obama’s ‘anti-outsourcing stance’, Trowbridge says that the future of LPO will be unimpeded, due simply to the workings of the free market. “As long as there are countries capable of providing labour to produce that output at a lower cost than highwage American workers, the use of offshore outsourcing will continue unabated,” said Trowbridge. “Clients will always be evaluating and sourcing in the latest most effective locations worldwide.” ALB 14

ANALYSIS

Dubai’s dubious debts: Is the emirate the next to hurt?

L

ong thought to be the bastion of liquidity despite global financial turmoil, the Gulf region may not be as sure a bet as once thought. Questions are being raised about the ability of its shining star – Dubai – to fend off the credit crunch in light of its heavy debt obligations. As is always the case, law firms, it seems, are already catching on to the need to be more proactive in terms of the funding sources for deals. Firms are also looking outside the innate strengths of the Gulf market – beyond projects, energy and resources – to relatively new markets in the Middle East, such as TMT, IP and dispute resolution. This is a move that may in the mid to long term turn out to be critical in more ways than one. Speaking at the Dubai International Financial Centre Week conference, H E Mohamed Alabbar, a member

of the Dubai Executive Council, noted that the emirate’s outstanding sovereign debt totalled US$10bn and its key sovereign assets totalled US$90bn – although the latter does not include some infrastructure assets that are still being valued. Although this is, by all accounts, a comparatively impressive balance sheet, rumours still abound that the government may be forced to sell some assets to meet its debt obligations when the global financial crisis hits full speed in the first and second quarters of next year – a claim denied by Alabbar. “The government has not … and will not sell a thing,” he told the conference. But just how will this affect things in the emirate and the Gulf and foreign investment into the region? Pledged FDI is likely to remain high, at least in the short to mid term, but Asian Legal Business ISSUE 9.1


NEWS | analysis >>

it may be that new and planned FDI commitments into the region will dry up, mirroring a trend that is pulsing through Asia at the moment. “Because of the credit crunch, deals will slow and projects will be financed less by debt and more by funds and private equity. But hopefully there’s light at the end of the tunnel that isn’t a train,” said Neale Downes, partner at Trowers & Hamlim. Shibeer Ahmed, a partner at Lovells, says this has already occurred. “The amount of transactional work is going down and the amount of competition is up.”

Lovells has plans to create dispute resolution and real estate practices in the near future. From all accounts, diversification is a winning strategy on more than one level. Not only will it allow law firms to weather whatever financial clouds are gathering on the horizon for the Gulf region, but diversification could prove the key to survival in a legal market that is increasingly saturated by international firms. By ALB’s count, at least 20 foreign firms have set up shop in the Middle East on the back of a seemingly endless flow of projects, infrastructure, and oil work. ALB

ANALYSIS

New Indonesian mining law creates investor uncertainty

A

new mining law aimed at increasing energy deals into resource-rich Indonesia has divided foreign investors and may create uncertainty for future inbound deals. Until recently, Indonesia had not seen a major mining contract since 2000, a spell only broken by the iron sand project in Yogyakarta province by Australian company Indo Mines Ltd. The new mining bill aims to break this trend and increase inbound deals, strengthening the government’s control over contracts. But there has been much debate as to whether the reforms will either lure or repel foreign investors. The bill will dispose of the old Contract of Work (CoW) – a government-granted contract which gave the deal parties control over the agreements – and replace it with a licence system that instead gives the government control. “As far as foreign investors are concerned, [replacing CoWs] has them divided into two camps,” said Luke Devine, foreign legal consultant at Hadiputranto, Hadinoto & Partners. He cites major mining houses and junior explorers as the two divided groups.

www.legalbusinessonline.com

“The major mining houses have demanded that the old CoW system must be retained, as ... it gives the investors the certainty they need in order to spend the billions required to develop these large-scale mining projects,” said Devine. The new system hands control of agreements to the government, he says, not the deal parties, when it comes to making amendments. “The mining houses have stated that they would be reluctant to invest in mining projects without legal and regulatory certainty that the CoW system provided them. The investment from these foreign majors may decline in respect of new projects,” said Devine. On the other hand, junior and mid-tier explorers should welcome the new licence system, as it gives ownership rights not allowed under the old law. “Allowing direct foreign share ownership in these projects ... will make it easier for foreigners, and foreign capital markets, to invest in mining projects with the required ownership certainty,” said Devine. “The new mining law will be welcomed for the added certainty in this respect.” Another potential problem for investors is the ongoing debate as to whether the holders of existing CoWs

news in brief >> US clients drop spending on external legal advice Clients are expected to cut private law firm spending in the US and more of them will steer clear of outsourcing legal advice in 2009, a new survey has revealed. According to the BTI Premium Practices 2009 corporate legal spending survey, growth in demand for external legal advice in the US will drop to just 1.9%, representing the legal market’s third consecutive year of single-digit growth. By comparison, the demand for legal advice in 2006 grew at a rate almost 10 times higher, at 19.5%. The study interviewed 1,900 clients and corporate counsel at Fortune 1000 organisations over a period of eight years. Topics included spending, budget and practice area assessments for 2008 and 2009. Most corporate counsel said they relied on about 40 law firms for legal advice, 20% fewer than the 52 firms used last year. They have also used in-house legal departments more to reduce outsourced work and compensate for rising law firm fees.

Ashurst boosts China presence with JV Ashurst has developed links with two firms in advance of its February 2009 Hong Kong office launch. The firm has forged an association with local law firm Jackson Woo & Associates (JWA) which will allow it to practise local law alongside its international practice. JWA’s affiliation with China’s Guantao Law Firm also provides Ashurst with a nonexclusive alliance with Guantao. “We are delighted to have found like-minded partners in [JWA’s] Jackson Woo and Sabrina Fung, both of whom have been voted into the Ashurst partnership,” said Ashurst Hong Kong office managing partner Robert Ogilvy Watson. “Formal associations are not permitted with PRC law firms so [the alliance with Guantao] is in effect as much as the current law permits.” The association with JWA was approved with the firm’s registration as a foreign law firm by the Law Society of Hong Kong last week. A merger will see the firms officially become a single entity in 2011, pending approvals. The firms are currently operating in JWA’s offices, but is said to be looking to move to new premises early next year. It is also looking to boost its numbers by around a dozen lawyers.

15


NEWS | analysis >>

ANALYSIS

Taiwan Strait: Detente may create bridge for firms The eternal dance between China and Taiwan has recently begun heating up, as the two continue improving economic ties – with China having recently opened up its legal market and banking sectors

will have to give them up under the new law, which could impact the number of future investments. “The termination of existing contracts ... may have significant adverse consequences for investor confidence in Indonesia’s regulatory system,” said Devine. “There are concerns that this will have broader ramifications for foreign investment in Indonesia, not only in the mining sector, as it gives a clear signal to investors as to the attitude of the Indonesian Parliament to honouring the terms of existing contracts. These contracts were approved by the Indonesian Parliament at the time of their initial signing. If the effect of the new mining law is to cut their term short, it will again put the spotlight on Indonesia’s regulatory uncertainty.” However, the changes would mean more work for lawyers, as they would have to traverse central, provincial and regional government regulations. “Although the legal work involved in the often-complex contractual structuring around the current form of domestic concessions will cease, additional legal work [for foreign investment mining projects] will come from having to work through the myriad of ... regulations that will apply to these mining projects, rather than simply reviewing the terms of the signed CoW,” said Devine. ALB 16

I

n what was perhaps the biggest news for both legal markets, China opened its legal market to Taiwanese residents in early 2008. The move saw over 600 Taiwanese hopefuls take China’s annual bar exam in September. As reported on page 23, more than 30 lawyers successfully obtained legal certificates that allow them to practice on the mainland. “The ability of Taiwan people to take the PRC bar exam and be admitted is a welcome development,” says Jerome Cohen, an expert on Asian law and of counsel at Paul Weiss. “This possibility for entering the mainland bar is encouraging. It should open up limited opportunities for this elite group.” Although the news went largely unreported in Western media, bloggers were quick to pick it up. “Removing unnecessary impediments to practising law in China is laudable because it allows lawyers from both sides to learn from each other,” wrote an

unidentified China law blogger, listing the many advantages of the measure. “Tearing down barriers is a very good thing for lawyers on both sides of the Strait, and is a smart political move too,” the blogger continued. However, long-term consequences are raising concerns. Ongoing tension between China and Taiwan may mean that competition between their legal markets will heat up. The main question is whether Taiwan will lose more legal talent to China, lured by higher earning potential. According to LCS & Partners’ Victor Chang, Taiwan’s legal talent is increasingly being lured overseas and towards the mainland. “The fact is that Taiwanese companies simply don’t pay large legal fees, and mainland law firms are charging multiples of what Taiwanese firms can do,” he said in the August issue of ALB (see ALB 8.8 ‘Special Report Taiwan 08’). But Baker & McKenzie’s Taipei managing partner H Henry Chang

►► China Annual data

2007

Historical averages (%)

2003–07

Population (millions)

1,321

Population growth

0.6

GDP (US$bn; market exchange rate)

3,241

Real GDP growth

10.8

GDP (US$bn; purchasing power parity)

7,245

Real domestic demand growth

9.5

GDP per head (US$; market exchange rate)

2,453

Inflation

2.6

GDP per head (US$; purchasing power parity)

5,483

Current-account balance (% of GDP)

5.6

FDI inflows (% of GDP)

3.0

Source: The Economist

Asian Legal Business ISSUE 9.1


NEWS | analysis >>

news in brief >> remains doubtful of the effects on the two legal markets. “Although sharing of legal talent will undoubtedly increase as the Taiwan-China trade and investment relationship grows, it will not become interchangeable as a result of the current trade liberalisation polices,” he says. “For the time being and for the short term, we will see more inter-firm cooperation in cross-Strait business deals. For the longer term, we are unlikely to see anything as radical as lawyers freely practising law in both jurisdictions or being admitted to the bars of both, although ChinaTaiwan trade laws will become more similar and the two jurisdictions will increasingly recognise each other’s judicial decisions on business and trade-related issues.” Another contentious subject is whether Taiwan will reciprocate and open its bar to Chinese lawyers. An official in Taiwan ruled out the measure, citing differences in the legal systems and an overcrowded Taiwanese legal sector. Nevertheless, Cohen encourages the move. “I hope that there will be reciprocity before long in Taiwan, although Taiwan has less relative need for lawyers than the Mainland does,” he said. The signing of the latest trade agreement has optimistic observers again commenting on warmer crossstrait ties. The hot topic has been M&A activity in the banking sector. Taiwan’s Financial Supervisory Commission is said to be reconsidering the ban on Chinese banks setting up shop or

“The fact is that Taiwanese companies simply don’t pay large legal fees, and mainland law firms are charging multiples of what Taiwanese firms can do” Victor Chang, LCS & Partners buying into the Taiwanese banking sector. China, though, has clearly opened its banking M&A doors. It recently approved Fubon Financial Holding Corporation’s acquisition of a 20% stake in Xiamen City Commercial Bank – the first acquisition by a Taiwanese financial institution in a mainland bank. The deal has prompted Taiwanese local banks, including Mega Financial Holding, to investigate acquisitions in the Chinese market, but they are still waiting for the government to approve China-bound investment. Ongoing political tension remains, despite the optimism. As neither country recognises the other’s currency, exchange problems arise. According to Cohen, the new changes will also be burdened by politics. “There is also a requirement apparently that [Taiwanese lawyers] pledge to support the PRC constitution and laws,” said Cohen. “How that will be handled will be interesting to watch.” ALB

►► Taiwan Annual data Population (millions)

2007

Historical averages (%)

2003–07

22

Population growth

0.2

GDP (US$bn; market exchange rate)

383

Real GDP growth

4.9

GDP (US$bn; purchasing power parity)

784

Real domestic demand growth

2.9

GDP per head (US$; market exchange rate)

16,913

Inflation

1.2

GDP per head (US$; purchasing power parity)

34,610

Current-account balance (% of GDP)

6.7

FDI inflows (% of GDP)

0.4

Source: The Economist

www.legalbusinessonline.com

Top IP lawyer given President’s Award The International Trademark Association (ITA) awarded senior IP lawyer Ella Chong its President’s Award. The award recognises a career of service to the global trademark community. Chong serves on the board of ITA and has been actively involved in the organisation of the committee, volunteering and mentoring young professionals to raise standards for the trademark bar. Facebook to add US law firms to patent dispute Facebook is on the lookout for private US law firms who are willing to help the social networking website resolve a new snag in an ongoing dispute. The popular social networking website is facing a patent infringement dispute with US-based Leader Technologies. Leader accuses Facebook of infringing its patented “method and system for the management and storage of electronic information.” Website founder Mark Zuckerberg was previously accused of stealing key elements from ConnectU, a Harvard dating site, misappropriating trade secrets, unfair competition, and fraud. Orrick previously acted for Facebook and responded by suing ConnectU, accusing it of hacking into Facebook’s computers and stealing emails. Paul Andre of King & Spalding and Philip Rovner of Potter Anderson & Corroon are acting for Leader. They are seeking unspecified damages and injunctive relief from Facebook.

DLA Piper salaried partners asked to contribute capital US and Asian salaried partners of DLA Piper will contribute capital to the firm under a proposal to be voted upon by partners next month. The firm said it is aiming to reduce its credit exposure by 30%, with joint chief executive officer Frank Burch commenting this was a move that anticipated more change in the credit landscape. “We thought it would be prudent to finance more of our operations with our own money as opposed to through our lines of credit with our banks,” he said. The proposal, which will give salaried partners a limited stake in firm profits, also intends to encourage an “ownership” culture rather than an “employee” culture for salaried partners. At present, Asia partners are not required to make capital contributions, but that may be about to change. This would bring Asia in line with the rest of DLA Piper International, with contributions to be stepped up over a three-year period. The firm expects to implement the plan next year.

17


NEWS | analysis >>

news in brief >> International US law firms outperform domestic firms It may seem like comparing apples and oranges, but some commentators have reached the conclusion that, in the US domestic market, international firms are outperforming their local counterparts. Peter Kalis of K&L Gates said that from 1998 to 2007 Am Law Global 50 law firms outperformed Am Law 100 firms, with respect to headcount growth (73% to 67%) and revenue growth (217% to 176%). Hildebrandt Institute chairperson James Jones believes international firms should expand their overseas offices, since foreign offices are often more profitable and can generate up to 60% of a firm’s global revenue.

Blasted: Lawyer accused of using Mumbai tragedy to promote firm A partner of a European firm who was caught in the Mumbai cross-fire is still ducking for cover even after returning to the UK. The partner, who was interviewed by The Lawyer and UK mainstream media, attracted the ire of readers by reportedly “namedropping” his firm and its India practice and allegedly boasting that the siege had not prevented him from participating in a teleconference board meeting from his hotel room. The reports drew howls of protest from readers on The Lawyer’s reader forum, who accused the partner of “shameless self-promotion” and being an “embarrassment” to the legal profession. There must have been wry smiles when one reader, who claimed to be a former employee working under the partner, wrote in to express amusement at the thought of the partner “cowering behind closed doors”. Too harsh? So thought some, who commented that the partner had demonstrated courage by providing comment under duress.

18

ANALYSIS

InBev decision sheds light on future of China M&A

C

hina’s first published competition decision following the introduction of the anti-monopoly law (AML) in August is no threat to future M&A deals in China, according to various competition lawyers. The decision, in which the country’s Ministry of Commerce (MOFCOM) approved Belgium-based beer manufacturer InBev’s US$52bn acquisition of Anheuser-Busch, has lawyers on the edge of their seats as to how the government will approach competition law and the future of inbound deals. “The InBev decision provides a valuable insight into how MOFCOM is likely to approach future transactions,” said Mallesons Stephen Jaques partner Martyn Huckerby, a Shanghai-based competition and antitrust lawyer. “This ruling is largely encouraging. It provides greater transparency in relation to MOFCOM’s merger control practices and, in turn, greater certainty in relation to the regulatory issues affecting investment in China.” According to Huckerby, the InBev decision is significant because it further emphasises the importance of parties consulting and negotiating conditions with MOFCOM, before and after the transaction, to obtain clearance. Chong Kin Lim, co-head of the Drew & Napier competition law practice, agrees. “I think the key thing for firms contemplating merger activities

in China is to consider how to engage the Chinese competition authorities early in the merger process so that concerns can be identified in advance to minimise any unexpected outcome,” he said. However, other law firms, including Freshfields and Linkaters, have published critical analyses of the decision. Freshfields detailed that, although MOFCOM insisted that the InBev ruling will not restrict future competition in the beer market, certain conditions would be imposed to prevent any adverse effects on China’s beer market. These included MOFCOM preventing both parties from increasing stakes in certain assets, preventing InBev from acquiring stakes in two of China’s main breweries, and requiring InBev to inform MOFCOM of any changes to its shareholders. “As a first glimpse of MOFCOM’s remedies policy under the AML, these undertakings demonstrate an approach not typically associated with ‘pure’ competition law review,” read a Freshfields publication on the decision. The decision “demonstrated that the Chinese merger control authority is willing to adopt an approach to remedies that at first sight differs from the international norm.” But, according to Huckerby, while the AML is based on international competition regimes, the law will always be applied in a Chinese context. “The InBev clearance came at a similar time to the [conditional] US

“The key thing for firms contemplating merger activities in China is to consider how to engage the Chinese competition authorities early in the process so that concerns can be identified in advance” Chong Kin Lim, Drew & Napier Asian Legal Business ISSUE 9.1


NEWS | analysis >>

news in brief >> FoxMandal Little becomes a little bigger Indian firm FoxMandal Little (FML) has announced that it will open two new offices in India. FML is set to open in Lucknow and in the northern city of Allahabad, the latter being in association with Bhatia & Co. As part of the FML’s Allahabad venture, the firm will take on board Bhatia & Co’s sole partner, Gaurav Bhatia, and all seven of the firm’s associates. Gaurav Bhatia said: “I am positive that my existing client base will benefit tremendously from the wide areas of practice given FML’s established [network] of offices and practice areas.” Three-quarters of US law firms to change billing practices Most large US firms believe they will change their billing practices over the next 10 years, a recent survey revealed. The annual Am Law 200 survey received about 140 responses, 84 of which were from firms with revenues of US$1bn or more. When asked whether firms would change their billing practices, about 75% of them said they would over the next 10 years, and 66% of them agreed that fixed-fee deals are likely. A similar survey prepared by social networking web site Legal OnRamp revealed that 84% of lawyers working for firms with revenues of at least US$1bn thought there would be more “value billing.” Respondents were divided when quizzed about whether fees would represent more than 10% of total transaction costs. However, collectively they agreed that billable hours would be diminished.

and UK clearances, which suggests that MOFCOM will consider the approach being adopted in other jurisdictions but will reach its decision in a manner that reflects its understanding of the relevant circumstances in China,” he said. Nevertheless, some observers have felt that M&A activity is likely to be subdued as a result of the ruling by MOFCOM. The limitations imposed on the InBev transaction have led to discussion as to whether the ruling will likely affect the attitudes of foreign companies looking to invest in China, including the giant M&A deal currently under review before MOFCOM – Coca Cola’s bid for local juice maker Huiyan Group. www.legalbusinessonline.com

Despite these sentiments, inbound M&A is looking healthy. A recent investigation commissioned by MOFCOM to counter fears of a foreign corporate invasion of local companies found that, as yet, no overseas M&A case has threatened the security of Chinese industry. And according to Lim, China’s importance in the global economy will likely counter any potential decline caused by fears in the InBev decision. “While no doubt this decision will have an impact, the fact remains that the Chinese economy is a key market and firms cannot afford to bypass this market simply due to regulatory scrutiny by the Chinese authorities,” said Lim. ALB

Allens, Blakes, Mallesons on board for BA-Qantas merger proposal Allens Arthur Robinson, Blake Dawson, Mallesons Stephen Jaques and Sullivan & Cromwell have confirmed they are acting on British Airway’s (BA) proposal to merge with Qantas Airways. If the A$10bn merger were to take place it would proceed via a dual-listed company structure and Allens partner Andrew Finch, Blakes’ John Field, Mallesons’ David Friedlander and Sullivan & Cromwell’s Daryl Libow would at the very least receive some due diligence and compliance work. BA would be limited to acquiring a 49% stake in Qantas since Australian federal transport minister Anthony Albanese announced that Qantas would remain a majority Australian-owned company. Slaughter & May is acting for BA, while SJ Berwin is acting for Qantas in the UK.

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News >>

news in brief >> US firm Covington in doha alliance US firm Covington & Burlington has formed a strategic alliance with a Qatar-based law firm. The firm will leverage its relationship with the Institution Quraysh for Law & Policy to expand its presence in the Middle East. Although the firm has tapped the Asia market through an office in Beijing, the firm has yet to establish itself in the Middle East. Patton baggs more Qatar office space Marking the fifth anniversary of its opening in Qatar, US-based law firm Patton Boggs moved to a bigger office as a result of its steady growth. The new office, located in the Commercialbank Plaza in Doha, was inaugurated in the presence of staff and officials including the US ambassador to Qatar Joseph LeBaron, the former Qatari economics minister Sheikh Mohamed Al Thani, and Qatar University vice president Dr Sheikha bint Jabor Al Thani. “We now have 12 resident professionals from six different countries, including three Qatari nationals,” said Robert Hager, the firm’s Doha managing partner. The firm was the first US firm licensed to practise in Qatar.

UK company revamps panel, eliminates time-based billing Is this a sign of things to come? Major UK company ITV has announced a new panel and, according to a report in Legal Week, is claiming the status of the very first UK company to eliminate time-based billing from its panel arrangements. It certainly sets a precedent for other jurisdictions. General counsel have always encouraged alternative billing structures – and now that workflow is starting to tighten up for firms, that gentle encouragement might begin to take a more strident note as GCs look to gain some leverage from their improved bargaining position.

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Energy & Resources

Clifford Chance, Freshfields, Bakers on major Chinese gas deal

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hina’s thirst for energy to feed its booming economy has seen a string of prominent law firms advise on one of the country’s major projects, a US$11bn gas pipeline stretching across Central Asia to China. Clifford Chance’s Geraint Hughes represented China Development Bank as the mandated lead arranger for the financing, while Baker & McKenzie’s Barry Cheng acted for the borrowers and Freshfields’ Robert Lonergan advised the Uzbek sponsor. The deal, which will see the development of a 1,818km pipeline to deliver 30 billion cubic metres of natural gas from Turkmenistan to China via Kazakhstan and Uzbekistan, was realised in 2006 when the late Turkmen president Saparmurat Niyazov and Chinese president Hu Jintao signed an agreement of cooperation between the two countries. China National Petroleum Corporation, the lead operator of the project, has also signed agreements with Uzbekistan and Kazakhstan, giving 50% stakes for their parts in the deal. China is said to be curbing its energy dependence on the Middle East and increasingly moving towards Central Asia and Russia. Turkmenistan is one

of the former Soviet Union’s most gasrich nations. “Central Asia has significant natural resources and is a likely destination for further investment from China and India, as well as continued investment from Russia,” said Hughes. Baker & McKenzie’s Cheng agrees. “China is on friendly terms with the countries in this region and these countries welcome significant investments from China,” said Cheng. “As these deals are strategically important to China, we will continue to see not only substantial equity investments from Chinese investors in the energy sector of these countries, but also substantial financing from PRC banks to finance these projects.” Cheng said that the multijurisdictional aspect of the deal, covering English, Uzbek, Kazakh and PRC law, was one of the challenges of the transaction. “The transaction involves jurisdictions with vastly different legal systems and foreign exchange control regimes. A major challenge that had to be overcome was to create a viable local security structure and a project cash flow retention and conversion/remittance mechanism that would be satisfactory to the parties concerned.” ALB Asian Legal Business ISSUE 9.1


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Middle East

UAE firms anticipate relaxation of foreign investment rules

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s new legislation relaxing foreign investment rules in Abu Dhabi takes shape, some firms are already beginning to field calls from interested clients. The drafting of the legislation is being reviewed by industry bodies including local industrial development organisation ZonesCorp. George Booth, corporate partner at Simmons & Simmons, said that his firm has been following the new developments closely. “We have seen an increasing number of enquiries from clients as to the implementation of

the law,” he said. “If the Dubai free zones can serve as an example of the increased foreign investment in that emirate … then certainly [this] will attract a great deal of attention from the investing community.” While details have not been released, it is understood that the current 49% cap on foreign ownership will be increased in sectors deemed to be most in need of foreign investment. Booth said that, in the revision stage, the law will need to be examined to give a considered opinion. ALB

news in brief >> Lawyers face M&A ice age Signs that lawyers may face a prolonged slowdown in the M&A market are emerging, as recent figures attest. According to Thomson Reuters, cancelled M&A deals in the fourth quarter of 2008 (US$322bn) are now globally on par with completed M&A deals (US$362bn). This is partly due to BHP Billiton’s cancelled merger with Rio Tinto, acted on by Allens, Linklaters, Blakes and Slaughters, among others. There has also been an overall downturn in global markets, for instance securitisations are down by 80%, business for investment-grade corporate debt dropped by 23% and high-yield corporate debt issuance slid by 76%.

Middle East

Weil Gotshal to open in ‘overlawyered’ Dubai

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mid sentiment that the region may be getting overcrowded, another US-based firm, Weil Gotshal & Manges, is set to open an office in Dubai in 2009. The firm was reportedly recently awarded a licence to practise in the country. Its European coordinating partner, Joe Tortorici, is to lead the practice when it opens in January. “We have worked with some of our major clients in the region for several years,” Tortorici told Legal Week. “Dubai is the leading market for us in the Gulf and it has emerged over the last 10 years as a very important money centre.” The opening is among many announced in the last few months, with

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the economic crisis said to be swaying European and US firms towards the booming economies of the UAE. But recent reports have raised questions as to whether the region’s legal market may be getting overcrowded. “A few months ago, I would have said the region wasn’t over-lawyered,” said Nick White, Trowers & Hamlins’ Dubai managing partner. “The pie was growing and there was a piece for everyone. But I have a feeling that some firms may not get the returns they thought they would on the investment they have made in offices and people. I have seen CVs from corporate commercial lawyers who are getting far less work, and far less sexy work, than they were led to believe.” ALB

‘Staggering’ UAE construction activity lures atlanta firm Atlanta-based firm Kilpatrick Stockton has opened its first office in the Middle East, responding to the region’s demanding construction and engineering sector for legal work. The office will open in Dubai and advise clients on creating or furthering their business interests in the Gulf Region, which the firm will later expand to encompass North Africa. “The level of current and planned engineering and construction activity in the Gulf is staggering,” said co-managing partner Bill Dorris. “Given this unprecedented construction activity, there is a growing demand for attorneys in the region … to handle the volume of complex legal work being generated.” First UAE judges sworn in at DIFC Three judges of the Dubai International Financial Centre Courts (DIFC) were sworn in recently, increasing the capacity of the region’s financial hub to deal with cases. UAE vice president and Dubai PM Sheikh Mohammed Bin Rashid Al Maktoum swore in Justice Ali Al Madhani and Justice Omar Al Muhairi to the Court of Appeal in the DIFC Courts and appointed David Williams QC as a judge of the DIFC Courts. “The swearing in of the three judges boosts the DIFC Courts’ ability to deal with cases of any level of complexity,” said Sir Anthony Evans, chief justice of the DIFC Courts. “Both Al Madhani and Al Muhairi have already played a tremendous role in developing the Small Claims Tribunal of the DIFC Courts, and I am confident that they will make positive and significant contributions to the continued development of the DIFC Courts.”

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News >>

India

India benefits from legal market restrictions

uk report London layoffs rife It has been a bad few months for lawyers in London and beyond. UK firms have been hit hard by the credit crunch, triggering a number of layoffs in quick succession. Among the firms to dismiss City staff in recent months are Eversheds, Orrick, Mayer Brown, Reed Smith, DLA Piper, Taylor Wessing and Squire Sanders. Eversheds is up to its second redundancy consultation, with the latest round tipped to include 45 lawyers and related support staff. Fresh from making cuts across its US network, White & Case has now turned its focus on to its UK offices, and although the number of job cuts in the firm’s London office is not yet clear, it is reportedly aiming to reduce its legal and non-legal headcount by approximately 3%. Forty associates across the real estate, structured finance and corporate practices of Orrick Herrington & Sutcliffe are said to be facing redundancy, as well as two associate jobs and one support staff post in the firm’s London office. Mayer Brown recently launched a redundancy consultation for 11 lawyers working in its London office, while DLA Piper has launched a redundancy consultation likely to result in up to 40 job losses across its UK offices. Partners have been told they will be out of the firing line. Crisis turns focus to strategy While many firms are taking to redundancy consultations to balance the financial fallout from the economic downturn, a few UK establishments are also initiating other tactics to stay afloat. Following a June redundancy consultation, Milton Keynes firm Kimbells recently told lawyers in three

of its departments to move to a four-day week and put the entire corporate team on two weeks’ unpaid leave in the run-up to Christmas. No new staff for Cadwalader Cadwalader Wickersham & Taft will have to break its impressive 100% trainee retention rate, which has remained steady for the last two-and-a-half years, due to worsening market conditions. The firm recently announced that it will not be offering jobs to any of its City trainees due to qualify in March 2009. The intake freeze will affect three trainee solicitors and makes Cadwalader one of the first leading firms in the City to make this move. Deloitte survey reveals slow growth for firms It may not come as a surprise, but recent research from Deloitte reveals that UK firms are struggling with growth in light of the economic crisis. The report noted that fee income across the country’s 100 largest firms had increased by only 5.8% during the second quarter of 2008–09 compared with the same period the previous year. Firms in the top 10 are faring slightly better than their smaller rivals, reporting an average rise in fee income of 11.1% for Q2, but large firms have still been affected, posting only modest increases in revenue. Hey big spender – Norton flashes the cash While most UK firms are having to cut corners in most cost centres, it seems Norton Rose is sailing along just fine – having just spent more than £8m on improvements to its offices. According to the firm’s 2007–08 annual report, £8.6m was spent on additions to its offices worldwide and a further £1.5m has been set aside for IT in the New Year.

ROUNDUP • David Harris will start his second four-year term as Lovells managing partner in May. He was recently re-elected, despite stiff competition from European head Harald Seisler • Bryan Cave recently launched its Paris office, with former Dechert partners Kathie Claret, Jilali Maazouz and Joseph Smallhoover and five other associates on board • Austrian firm Schoenherr is set to take over Herbert Smith ally firm Gleiss Lutz in the New Year. Schoenherr will obtain Gleiss Lutz’s Prague and Warsaw branches, simultaneously launching its own office in Bratislava, Slovakia • Eversheds, Allen & Overy and Ashurst are just a few of the top-tier firms to receive gongs for their work and employees at the recent 2008 British Legal Awards. Eversheds won firm of the year and lawyers from Allen & Overy and Ashurst picked up the lifetime achievement and senior partner awards respectively

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ndia’s legal market, which prevents foreign firms from opening up offices in the country, is continuing to reap the benefits from the tie-in with international firms eager to maintain a presence in its legal market. With firms increasing their stakes in India, local lawyers are reporting an increase in salaries. Lead partners are earning up to US$1m a year, according to the Financial Times. “Corporate [lawyer] salaries have exploded. They are going up by 20% to 40%,” said Anand Prasad from Indian firm Trilegal. Firms such as Amarchand & Mangaldas, Jyoti Sagar Associates, Luthra & Luthra and Dhir & Dhir are hiking attorney salaries by as much as 100% in a bid to obtain talent from larger firms. The news comes as more firms attempt to increase their footprint in the Indian legal market. Magic Circle firm Clifford Chance is to set up an India team in Singapore, advising on capital markets transactions involving India. The firm is geared to respond to the increased trade in the region. Meanwhile, Eversheds’ India practice has been appointed to the large-scale Vizag power project, working alongside local firm FoxMandal Little. The US$1.3bn power project will be built in the southeast state of Andhra Pradesh. Asian Legal Business ISSUE 9.1


News >>

taiwan

US

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Managing partner in fraud case

Taiwan-mainland China centre to provide legal advice for Taiwan investors n a sign of improved relations across the Taiwan Strait, a new Taiwan-mainland China cooperative legal service centre was officially inaugurated in early November. The Across-Taiwan-Strait Legal Service Center (ATS Legal Service Center) is a joint initiative of Dacheng Law Offices and the Taiwan All-China Federation of Industry and Commerce. The ATS Legal Service Center aims to provide legal services for investors in Taiwan as well as mainland China, with a particular focus on filling the gap in legal services for those who intend to invest in Taiwan. Meanwhile, over 30 Taiwanese lawyers have passed China’s annual judicial exam and will be allowed to practise in the mainland, following China’s lifting of the bar exam ban on Taiwanese residents earlier in 2008. A spokesman for the State Council Taiwan Affairs Office said that regulations for the provisions were currently being drawn up and would be released soon. The news follows an announcement in April by China’s Ministry of Justice to allow Taiwan residents to sit the September exam. Around 658 Taiwanese took advantage of the allowance, a fraction of the 370,000

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candidates from the mainland. The Ministry relaxed the ban on Taiwanese candidates in an effort to promote positive relations between the countries and further develop China’s economy.

Thailand

White & Case cuts Bangkok office

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hite & Case’s Bangkok office has been given the axe – the third office closure of 2008 for a firm that has also seen a significant number of associate layoffs in the US. The Bangkok office has broken away and will operate independently under the names of three partners, Weerawong Chinnavat & Peangpanor. Its 58-lawyer team will transfer to the new firm and will operate on a ‘best friends’ basis, referring work to the global firm. “The decision to create the new firm was taken after a period of consultation with the team in

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n the latest round of lawyers behaving badly, the managing partner of a prominent New York law firm has been arrested on fraud charges. Marc Dreier, the founding partner of the 250-lawyer firm Dreier, was arrested for allegedly selling US$100m worth of fake promissory notes to various hedge funds in October. “Marc Dreier allegedly used his law licence and his access to institutional investors to perpetrate a brazen fraud,” said Lev L Dassin, a lawyer for the US Attorney’s office. Only days before the arrest, Dreier was apprehended in Toronto for impersonating an in-house lawyer with the Ontario Teachers Pension Plan. According to various reports, Dreier distributed a fake business card with the name of the in-house lawyer in a business meeting concerning a US$40m deal. “On Tuesday afternoon, we learned of fraudulent behaviour by an individual visiting our premises,” read a statement issued by Ontario Teachers Pension Plan. “We immediately alerted the police. An individual was arrested by the police and has been charged.” It does not stop there, however. Dreier was sued by Wachovia Corp for defaulting on a US$12.7m credit loan to his firm. This was exacerbated by a later complaint by the Securities Exchange Commission alleging Dreier sold fake promissory notes. ALB

Bangkok,” said the firm’s chairman, Hugh Verrier. “Given the strategic goals of the firm, we agreed that the creation of an independent firm would be mutually beneficial to White & Case and our Bangkok team.” The firm is undergoing a review by consultancy company McKinsey & Co to manage its resources. Last month, it announced the closure of two European offices, in Dresden and Milan, but denies that the closures are related to the Bangkok breakaway and that the latest axing of 70 associates are related to the McKinsey review. 23


News >>

Singapore

us report Firms slash staff to battle credit crunch UK firms aren’t the only ones turning to redundancy to counter the effects of the economic downturn. US firms across the board – Squire Sanders & Dempsey, Proskauer Rose and Reed Smith among them – have also been engaging in some pruning of the payroll. Squire Sanders dismissed a total of 30 associate and support staff following its annual employment reviews, citing current and projected business conditions as the major reason. Proskauer Rose, meanwhile, made 35 associates and 25 support staff redundant in its US offices (despite major advances in developing its international network). But perhaps the most dramatic culler of staff has been Reed Smith, who made 115 redundancies across its US offices. Other firms to have cut staff include: Buchanan Ingersoll & Rooney (25 secretarial and administrative staff); Duane Morris (22 marketing and administrative staff); Ballard Spahr Andrews & Ingersoll (13 support staff); boutique IP firm Synnestvedt & Lechner (7 staff – has since disbanded); and Blank Rome (9 associates). Christmas bonuses hit by downturn Firms are increasingly having to display Scroogelike tactics in a bid to soften the blow of the credit crunch on their finances. Cravath Swaine, Simpson Thacher, Clifford Chance and Davis Polk are

among the firms whose US associates are receiving reduced bonuses at the end of the year. At Cravath, year-end bonuses for 2008 will range from $17,500 to $30,000, and the firm has canned the special bonus element of its 2008 payments. Simpson Thacher has also cancelled the additional special bonus for its associates, which last year ranged from $10,000 to $50,000, and junior lawyers will receive $17,500 – a severe drop from last year’s payout of $35,000. Clifford Chance associates will receive between $17,500 and $32,500 – a far cry from last year’s $32,000 to $65,000. The story is similarly austere at Davis Polk, and Cleary Gottlieb and Dewey & LeBoeuf are two more firms to have slashed back associates bonuses. Skadden Arps, however, has decided to go against the grain and has actually matched 2007 figures – minus supplemental bonuses. Partners at DLA Piper share financial load Partners at DLA Piper have been asked to contribute capital to the firm from next year. The strategy – a bid by the firm to reduce its reliance on bank credit and simplify its compensation structure – will only affect the 275 salaried partners at the international firm’s US offices who now receive an income rather than hold an equity stake at the firm. The amount to be contributed will depend on seniority and will give the partners a stake in the firm’s profits less than that of full equity partners.

ROUNDUP • Kirkland & Ellis has promoted 67 of its lawyers to partner across its US and London offices. In the US, the corporate practice alone saw 23 promotions, while litigation had 20 • Cleary Gottlieb has promoted 10 lawyers to partner recently – six in the New York office, two in Rome and one in Brussels • New York-based corporate head Tim Goodell has left troubled White & Case to join US oil company Hess Corporation as general counsel • King & Spalding is close to reaching an agreement with Thacher Proffitt regarding the acquisition of around 100 of the latter’s 195 lawyers • White & Case chairman Hugh Verrier has voiced his commitment to expanding and further developing the firm’s existing international network, in the wake of a management shake-up that saw firm power split among 14 regional groups and a 16-member global practice council set up. Verrier confirmed Latin America and Asia as prime targets for investment

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Rajah, Infinitus locked on anime IP suit

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aw firms Infinitus Law Corporation and Rajah & Tann will come head to head in an IP infringement case that has stirred the online anime community to action. Rajah & Tann is advising five media studios – Showgate, Geneon Entertainment, TV Tokyo, GDH KK and Sunrise – which are suing four “heavy downloaders” for allegedly acquiring the studios’ anime cartoons illegally using BitTorrent. Infinitus’ Wong Siew Hong, head of the firm’s IP litigation, is representing two of the accused downloaders, Felix Lukman and Koh Lian Boon. The case has caused a flurry of online activity, with one online group, XedoDefense, undertaking a funding drive for the defence of the two accused. Several members of the group have posted comments criticising Singapore’s IP laws and urging action to “fight” the court pressure being placed on the accused by Rajah & Tann. “As they [Rajah & Tann] have already escalated the situation to actual court action, the pressure on the accused, whether guilty or not, persons would be even greater,” wrote one member, ‘Xedo Senshi’. “The only possible way to fight this is by grouping together.” Wong said that his firm has no business relationship with XedoDefense but is aware of the funding drive. The law suit, said to be the first of its kind, is likely to set a legal precedent. Wong, however, remains somewhat sceptical. “Any case has potential for proving legal precedents; this is no more different,” Wong said. “Having said that, the very nature of the claim and issues involved make it apparent that there are novel issues that need to be determined by the courts. These are of obvious interest to many people. We’ll wait and see how it develops.” Rajah & Tann declined to comment. ALB Asian Legal Business ISSUE 9.1


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singapore

Unwinding minibonds: Drew & Napier chief to help untangle

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rew & Napier chief executive Davinder Singh SC has been called on by the Monetary Authority of Singapore (MAS) to give advice on the next crisis looming in the Lion Nation – the unravelling of Minibonds structured notes. Minibonds are creditlinked notes which are structured as a security with an embedded credit default swap, allowing the issuer to transfer a specific credit risk to credit investors. In Hong Kong and Singapore, these are marketed and sold to individual investors. Singapore’s central bank said that it has called on Singh “to advise the MAS on the implications of the legal issues raised by lawyers acting in the Chapter 11 proceedings for Lehman Brothers”. ALB understands that these “implications” have to do with

the fact that the entity used to issue the notes – Minibond Limited – was an offshore special purpose vehicle created by Lehman, a fact that the Minibonds trustee, HSBC Institutional Trust Services, and receivers, PricewaterhouseCoopers, believe will lead the lawyers acting on the Lehman case to challenge the unwinding of the Minibonds. Series 1 and 5–10 of the notes have defaulted and will be unwound, while series 2 and 3 are expected to go into default soon. There are no series 4 notes. The appointment of Singh, one of Singapore’s most revered litigators, is being interpreted in the industry as a sign that the Singapore government is considering litigating this dispute and expediting the return of cash to investors in the minibonds. ALB

india

Indian PE lawyers hit hard, says Fox lawyer

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espite sentiments that India, as one of Asia’s beacons of light in the global financial crisis, has remained largely unscathed by the turmoil, lawyers say that the legal industry has felt the impact of waning inbound investment due to the lack of funding available, especially in the private equity sphere. “There has been no significant PE activity and the reason for that has been that most foreign institutional investors are adopting a wait-andwatch approach, and are finding themselves struggling to raise finance from investment banks…” said Vineet Aneja, partner at Indian firm FoxMandal Little. Indian private equity deals have seen a sharp decline this year. According to a report by consultancy Grant Thornton, last year around 328 deals with a total value of US$13.34bn were announced, but for this year to October there were only 274 deals with a combined total of US$9.67bn. “The slowdown in the M&A and

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private equity markets has affected the volume of transactions that are being conducted, especially in relation to foreign investment,” said Aneja. “This in turn has led to a reduction in work for corporate lawyers, with greater impact on firms that rely heavily on foreign work.” With deals largely funded by hard-hit international investment banks, Aneja said market sentiment is decidedly in decline. “We have personally witnessed international institutional and fund investors shying away from deals, even where initial commitment has been made,” he said. “This is a clear indicator of the negative impact of the global financial crisis on PE deals in India.” The weakening of company stock values in the crisis has meant the private investments in public equity (PIPE) model has also suffered. “A considerable proportion of PIPE transactions have ended up losing money, hence this year has seen a reduction in the number of PIPE deals,” said Aneja.

region

Orrick lays off Asia lawyers

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iting economic pressures, USbased firm Orrick Herrington & Sutcliffe has cut approximately 10 staff in the firm’s Asian offices. In a round of redundancies affecting its global offices, the firm has laid off 40 associates and counsel in its real estate, structured finance and corporate practices, including 35 staff members. According to reports, half of the number is from outside the US, and around a quarter of the redundancies will specifically affect the firm’s Asia practice. The firm did not disclose which Asian offices were affected, but was said to have made the decision three weeks ago before notifying associates of the redundancies. “Throughout 2008, we have done all we could to avoid today’s action: we have redeployed lawyers to different practices and we have cut expenses,” the firm said in a statement. “Unfortunately, our staffing levels in the affected practices remained too high, given the economic environment our clients and ourselves face.” In October, the firm picked up 27 former Heller Ehrman partners, but chairman Ralph Baxter said that decision was made as to the economic value of the acquired partners. “All of the Heller lawyers who joined us were in practice areas that are litigation oriented. Compared with the layoffs, it’s apples and oranges. They are mostly partners, and they bring business with them,” said Baxter in an interview with AM Law Daily. 25


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Update >>

Competition Competition in the retail mall rental market

“It’s a Landlord’s market.” “Forget about negotiations - it’s a standard form lease!”

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hese are the most common responses in the leasing scene in Singapore for the last 3 years, as every practitioner attempting a lease markup will know. So is the tenant always at the short end of the stick? The Competition Commission of Singapore (CCS) recently released a comprehensive market study on retail mall rental space which provides an insight into the state of competition in the retail mall rental market in Singapore as of October 2008. The CCS found that there are unlikely to be competition concerns in the retail mall rental market at this juncture as no landlord is likely to be dominant in retail malls so retailers are able to negotiate and choose between malls. In addition, while limited supply and rising demand may have conferred greater bargaining power on landlords and resulted in rising rentals, this situation may ease given the uncertain economic outlook and as rental space supply is set to increase over the next 4 years. The CCS also concluded that the entry of REITs into retail space have led to overall improvements in mall management which benefits retailers and shoppers. However, the report confirmed that tenants do not have much bargaining power in leasing conditions, particularly for REIT managed malls, as tenants usually forego better lease terms in order to maintain their presence in particular malls or a harmonious relationship with their landlords. Most practitioners therefore find their hands tied when it comes requesting for lease amendments to protect the tenant’s interest. The report also reveals that it is now more common for landlords to reserve a right to redevelop the building and relocate the tenant without compensation, or revise the boundaries of the leased premises, or change common areas. Such changes may lead to overall mall improvements, but the tenant should be wary that such covenants erode their right of exclusive possession and quiet enjoyment, and may possibly disrupt their business operations, particularly if such changes impact on access or frontage. So while there is currently no clearcut competition concerns in retail mall leasing, hopefully the report will trigger a greater awareness of the somewhat high handed leasing practices prevalent in the market, and allow some room for tenants to bargain for more balanced lease terms. Sandra Seah Partner Competition Practice Group Alban Tay Mahtani & de Silva LLP

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Sandra Seah

Korea

Korean lawyers turn tables on judges

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recent decision by a Korean bar association to assess and publish the performance of judges has been criticised for the potential problems it poses for the independence of the courts. The Seoul Bar Association (SBA) last week said that it will set up a special committee to conduct an evaluation of judges’ performances, publishing the results at least once a year, according to a report by the Korea Times. “A wide range of factors, including the judge’s attitude, integrity, fairness and knowledge, will be assessed,” said the SBA in a statement. “And we will score them according to the results.” The SBA moved towards the decision after a petition filed by a lawyer against the actions of a judge. But there are several problems this poses for the judiciary, said Sean Hayes, a lawyer at Logos Attorneys at Law and the only foreign lawyer to be hired by the Korean Constitutional Court. Hayes said that evaluations may put pressure on the decisions of the judge, especially in a criminal case which could sway the decision towards a more defendant-friendly sentence. “Korean lawyers often get paid based on contingency fees, even in criminal cases. So a judge might be perceived as a good judge when that judge rules in favour of defendants, since lawyers are getting paid based on the outcome of the case.” The issue is also surrounded by cultural dilemmas. Korean judges are often younger than the lawyers, since a Korean lawyer begins their career as a judge and then turns to private practice. Hayes questions whether the evaluation program will have a significant effect, but maintains that the integrity of the judge’s decision should be upheld. “Order is something that should be kept. Sometimes a judge needs to be tough, especially a younger judge. I don’t know if this will have a huge effect. But there will be certain judges red-flagged for bad reasons, for example being victim friendly, which could cost practising lawyers money.” ALB Asian Legal Business ISSUE 9.1


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Update >>

Employment Australian Government introduces the Fair Work Bill

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singapore

Revealed at last: Six firms granted Qualifying Foreign Law Practice licencees

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llen & Overy. Clifford Chance. Herbert Smith. Latham & Watkins. Norton Rose. White & Case. After months of intrigue and speculation, the Singapore government has finally released the names of the six foreign firms which will be permitted to practise Singapore law. The selection process has taken over three months. Firms were invited to apply for the licences back in August and surprisingly only 20 applications were received. A thorough selection process was then undertaken by a number of government officers including the Attorney-General, the Minister for Law and permanent secretaries from the Ministry of Finance and the Ministry of Trade and Industry. The selection committee commented on the high quality of the applications, and it is clear from the results that those involved in the selection process had difficulty separating the competing firms. Attentive observers will have noticed that the list contains a total of six firms, rather than the five which it was originally understood would be approved. The licences will run for an initial five-year period and it will be interesting to see what further liberalisation occurs in that timeframe. Singapore has led the way with its legal sector reforms and the question inevitably follows: who is next? All eyes turn to Korea and India. For more on the QFLP licensees, look out for next month’s special issue. ALB

www.legalbusinessonline.com

ne year after coming into power, the Australian Labor government has introduced into Parliament the long-awaited legislation to implement its “Forward with Fairness” election commitments. The Fair Work Bill 2008, at 575 pages, is substantially shorter than the current Workplace Relations Act. The Bill was published with an extensive Explanatory Memorandum and the government has issued fact sheets on a number of key areas. Many of the details of the legislation are as expected, based on Labor’s election commitments and post-election government announcements. In particular, the Bill: • introduces a new safety net, comprised of the National Employment Standards (NES) and modern awards; • sets out a new system of good faith bargaining for collective agreements in which the new body “Fair Work Australia” will have a pivotal and potentially more interventionist role; • brings back unfair dismissal protection for most employees; and • maintains many of the existing rules in the areas of industrial action, freedom of association and right of entry—with subtle, but significant additional powers to unions. However, the Bill also contains some surprises: • Genuine non-union collective agreements are likely to become a thing of the past, particularly for large employers where unions are traditionally active. • The transfer of business provisions are extended to cover a much wider range of transactions, including outsourcings and corporate re-organisations. The 12-month limitation on transferring instruments is removed so transferring instruments now continue until they are terminated or replaced. • Arbitrated workplace determinations will be available in a wider range of situations, including where protracted industrial action is causing significant economic harm to the parties and where there are sustained breaches of bargaining orders. • The traditional freedom of association and discrimination provisions have been consolidated and, in some cases, expanded to create broader liabilities for employers. • Union right of entry has been expanded to permit unions access to premises in respect of members, including the right to inspect non-members’ pay and employment records. The Bill has been referred to a Senate Committee that will report on 27 February 2009. It is possible that amendments will be made during the parliamentary phase. The government has indicated its intention for most aspects of the new system to commence on 1 July 2009, although the NES and modern awards will commence in January 2010. The Bill appears to be the result of significant compromise between the separate demands of union and employer groups. Employers in Australia should familiarise themselves with the content of the Bill, and prepare for its implementation in mid 2009 and early 2010.

George Cooper, Practice Leader Workplace Law & Advisory – Asia Freehills Direct +65 6236 9941 Telephone +65 6236 9939 Facsimile +65 6538 2575 http://www.freehills.com

George Cooper

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Update >>

Credit crisis

International Arbitration

BHP–Rio Tinto, lawyers still optimistic

Drunk Drafting: Some perils of arbitral champagne clauses

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ometimes, amidst the euphoria and clinking of glasses when closing a deal, arbitration clauses can suffer from neglect or thoughtless tweaking, leading to unforeseen or unintended consequences. Craig, Park & Paulsson’s commentary on ICC Arbitration (3rd Ed, 2000) accords one defective clause the dubious distinction of a “pathological arbitration clause”. It called for arbitration “carried out by arbitrators named by the International Chamber of Commerce in Geneva in accordance with the arbitration procedure set forth in the Civil Code of Venezuela and in the Civil Code of France, with due regard for the law of the place of arbitration”. Similarly, a German appeal court in 1994 declared void for ambiguity, an arbitration clause providing for parties to “litigate before the Arbitration Court of the International Chamber of Commerce in Paris with the seat in Zurich”. The German Court held that it was unclear if the parties were meant to submit to the ICC or the Zurich Chamber of Commerce. It is true that courts of many countries generally strive to uphold arbitral provisions. On 14 August 2008, the Singapore High Court in Insigma Technology Co Ltd v Alstom Technology Ltd [2008] SGHC 134, upheld a clause providing for a dispute to be “finally resolved by arbitration before the [SIAC]” but “in accordance with” ICC Arbitration Rules. The High Court noted SIAC’s agreement to administer the arbitration by substituting “appropriate corresponding actors” to perform functions of the ICC secretariat, Court and Secretary General. Instructively, resolving merits of the commercial dispute was delayed at least 2½ years from the time the dispute crystallized in February 2006. The parties also underwent an abortive ICC arbitration from August 2006 – February 2007, a preliminary jurisdiction battle before an SIAC constituted tribunal that upheld the clause on 10 December 2007, which in turn, precipitated the fight before the Singapore High Court. Such cases illustrate the sheer cost of vindicating draftsmanship. The simple expedient of adopting standard clauses recommended by the arbitral institution referred to is one possible safeguard. Numerous works also supply handy drafting checklists. Common elements to take note of include the arbitral seat, choices of substantive and procedural law and rules, appointment mechanisms and number of arbitrators and language. The shadows cast by arbitration clauses can be long indeed. Degradation of such provisions to “boilerplate” status as throw-in clauses is one sure way to ensure interesting times in the event of a dispute. Mr. Randolph Khoo is a Director of Drew & Napier’s International Arbitration Group. He is also a Fellow of the Chartered Institute of Arbitrators and the Singapore Institute of Arbitrators. He can be contacted at +65 6531 2418, or randolph.khoo@drewnapier.com. He specializes in International & Domestic Arbitration, Company, Contract Law, Shareholder, Family Asset and Employment Law disputes. For his full CV, please visit www.drewnapier.com/directors.html.

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Randolph Khoo

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fter over 18 tireless months of acting on the failed BHP Billiton and Rio Tinto merger, Allens Arthur Robinson partner Ewen Crouch is still optimistic. “It was a terrific effort … our team has been working incredibly hard for the past 12 months and will enjoy the break over Christmas and the New Year. We are optimistic about M&A and capital markets work in 2009 that should get underway from around February,” he said. The two mining giants decided to call off the deal most recently valued at US$66bn, after the fall in metal prices and global financial crisis were feared to have created too much risk for the deal to proceed. Crouch believes the BHP–Rio takeover bid was unique partly due to the number of jurisdictions involved and the nature of the proposal. “This was a unique deal. There are few dual-listed companies and this was the first proposal to acquire a dual-listed company by way of takeover,” he said. There were numerous complexities such as Rio’s repeated rejection of BHP’s bid and reportedly little interaction between parties. The European Union’s antitrust authorities also demanded that BHP divest some assets, while both Japan and China were against the deal due to their reliance on both party’s iron ore and raw materials. Other firms that worked on the BHP–Rio merger include Linklaters, Blake Dawson, Slaughter and May and Skadden, Arps, Slate, Meagher & Flom. ALB

China

Chinese lawyers round up against Baidu

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group of Chinese lawyers are seeking to file a mass complaint against search engine giant Baidu over alleged unfair competition practices. The group has rounded up 50 companies willing to seek legal action against Baidu and will file the complaint once the number reaches 100. The group is being led by lawyer Li Changqing from law firm George Wu & Partners. Li had previously filed a complaint against the search engine company in September on behalf of Hebei-based medical information site Qmyyw. com, which had signed a competitive ranking services deal earlier this year but saw a decline in inbound visits after lowering its payments. In the move, plaintiffs will seek different counts against Baidu, including brand infringement, alleged fraud and unfair competition. Baidu, whose search results appear through auctioning keywords, has been criticised by Chinese media for allegedly allowing unlicensed medical product companies to purchase higher rankings. ALB Asian Legal Business ISSUE 9.1


News >>

Update >>

asia

Bird & Bird hatches alliance with ATMD

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nglish firm Bird & Bird and Singapore firm ATMD have entered into a global association agreement which will see the firms collaborating on an exclusive basis. The alliance will benefit both firms in Asia: Bird & Bird gains a presence in regional hub Singapore and ATMD boosts its China coverage through Bird & Bird’s trio of offices in the PRC. Both firms had previously made their expansionary intentions clear, with Bird & Bird having opened its Shanghai office in October and ATMD having had its AxcelAsia alliance with Malaysian firm Tay & Partners since September 2005. “This is a hugely exciting great step forward for us in Asia,” said Bird & Bird’s China managing partner Matthew Laight. “This takes us from a position where we were really rather European-heavy as a firm, and puts us in a position with a much stronger footprint across Asia.” The alliance is already proving fruitful for Bird & Bird, said Laight. The firm has most recently embarked on a pitch with a major multinational client, which was significantly boosted when the client was found to be familiar with ATMD. “There’s a huge amount of synergy between the two firms, both in terms of areas of legal practice, but also in our potential client base,” said Laight, adding that his firm had grown from a six-partner team in the PRC to now almost 20 with the association. The alliance may be just as beneficial for ATMD, which can now ramp up its business in the European market through Bird & Bird’s 17 offices there. “We see this global association as a great opportunity and an important step in our continued expansion and future growth,” said ATMD managing partner Alban Kang. “Bird & Bird and ATMD are very similar in terms of culture and approach to business, and our clients will benefit from the increased international coverage of both firms.” ALB

www.legalbusinessonline.com

Intellectual Property Notable UK court decisions on inventiveness

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raditionally, Singapore courts have consistently adopted the four-step approach set out in the case of Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 at 73 for determining whether something involves an inventive step. This Windsurfing four-step approach has been reformulated and elaborated in the UK in the case Pozzoli SPA v BDMO SA [2007] EWCA Civ 588. The principal alteration to the approach is to change the running order of the questions, i.e. (a) identify the skilled person in the art; (b) identify the relevant common general knowledge of skilled person; (c) identify the inventive concept of the claim in question; (d) Identify the differences between the prior art and the inventive concept; and (e) ask whether those differences would have been obvious to skilled person. Jacob LJ in Pozzoli reasoned that one must first assume the mantle of the skilled person before identifying the inventive concept embodied in the patent. This allows the skilled person to properly understand what the patentee must have meant and thereby set about identifying the concept. Once the court had identified and assumed the mantle of the skilled person, it had to then identify if those differences between the prior art and the inventive concept were obvious. Still, the question of obviousness remains. Recently, in Conor Medsystems Inc v Angiotech Pharmaceuticals Inc UKHL 49, [2008] R.P.C. 28, the UK House of Lords upheld the validity of a patent on the basis that the test for obviousness ought to be determined by reference to the claims and not based upon the extent of disclosure in the description. Angiotech owned a patent for stent coated with taxol for treating or preventing restenosis. The specification contained insufficient experimental data or evidence to satisfy a skilled person that taxol was likely to be successful as a coating for a drug-eluting stent to prevent restenosis. As such, the lower UK courts and Court of Appeal found the patent obvious because the inventive concept was no more than that taxol was worth trying without any expectation of success. However, the House of Lords reversed the decision and decided that the test for inventiveness ought to be “whether it was obvious to use a taxol-coated stent to prevent restenosis”. If the specification disclosed enough information to make invention possible, then the patentee should not be expected to justify that his patent will work. If the Angiotech decision is adopted by the Singapore courts, we can expect more patents to be upheld as valid. Edmund Kok, Patent Attorney Intellectual Property and Technology Group Alban Tay Mahtani & de Silva LLP Phone +65 6534 5266 Email: EdmundKok@atmdlaw.com.sg

Edmund Kok

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Asian Legal Business ISSUE 9.1


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www.legalbusinessonline.com

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India

singapore

Mumbai terror attacks to cause Clifford Chance and legal industry slowdown

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ndia’s legal sector is bracing itself for the fallout caused by the Mumbai terror attacks which, coupled with the economic crisis, will affect inbound investment and legal work, according to a local lawyer. “Clearly incidents such as these will shake the confidence of foreign investors and we may see some degree of hesitancy in the minds of investors,” said Mumbai-based lawyer Siddharth Shah of Nishith Desai Associates. “The timing of the incident in the midst of a global economic turmoil would not really help in terms of early revival in the Indian economy which was expected. So, in a way, the incident has proved to be a ‘blow below the belt’.” Foreign investors have increasingly eyed India’s booming economy in the last few years, which has been a major source of work for the legal industry.

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“The legal industry in India is much more globalised and clearly any adverse impact on the investment climate would have a direct impact on the growth, or rather the pace of growth, of the industry,” said Shah. “As a result, this incident will result in a definite slowdown in the legal industry over the short term, an industry which was already, in some form, feeling the heat of the global economic turmoil.” However, the decline is not expected to remain in the long term. Shah says that the robust Indian economy will recover from the decline. “In the long run, the fundamental strengths of the country as an investment destination should override these negative sentiments,” he said. “I believe that the legal industry in India will continue to grow and prosper as the economic growth regains momentum.” ALB

WongPartnership to part ways

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lifford Chance and WongPartnership have announced that they will terminate their joint venture, Clifford Chance Wong Pte Ltd. The effective termination date of the joint venture will be 30 April 2009. While the firms said in a statement that the decision was made “in view of the impending liberalisation of the Singapore legal services sector”, a spokesperson for Clifford Chance said that the firm was unable to provide further comment on its progress towards securing a Singapore licence for confidentiality reasons.

Asian Legal Business ISSUE 9.1


News | appointments >>

appointments

Supreme People’s Court

►► LATERAL HIRES Name Jiang Zhipei

Leaving Supreme People's Court Rabobank

Going to Fangda Partners

Practice IP

Location Beijing

KhattarWong

Commercial and banking

Singapore

Shephard Mullin FoxMandal Little

IP IP

Los Angeles New Delhi

David Deck Brian Downie

Bingham McCutchen Akash Chittranshi & Associates Baker & McKenzie Minter Ellison

Jones Day Simmons & Simmons

Tokyo Hong Kong

Jyotirmoy Banerjee Louis Meng

Lehman Bros DLA Piper

O’Melveny & Myers K&L Gates

James Wood

Goldman Sachs

O'Melveny & Myers

Banking & finance Energy & infrastructure Capital markets Corporate, M&A and securities Corporate finance

William Cattan Joanna Addison Lara Hammoud

Dewey & LeBoeuf Dewey & LeBoeuf Shearman & Sterling

Corporate Corporate Arbitration

Doha Doha Abu Dhabi

Kelly Li William Barringer Christopher Dunn James Durling Daniel Porter Ameet Datta Mohit Lahoty Himanshu Bagai Thomas George Matthew E Digby

Patton Boggs Patton Boggs ICC Dispute Resolution Services Linklaters Heller Ehrman Heller Ehrman Heller Ehrman Heller Ehrman Anand & Anand Anand & Anand Anand & Anand Anand & Anand Bingham McCutchen

Property international trade international trade international trade international trade IP/Entertainment IP/Entertainment IP/Entertainment IP/Entertainment Litigation

Abu Dhabi Washington DC Washington DC Washington DC Washington DC Delhi Delhi Delhi Delhi Tokyo

Go Hashimoto Paul Lau

Bingham McCutchen Conyers Dill & Pearman

Corporate Corporate

Tokyo Hong Kong

Tony Grundy

Linklaters

Shearman & Sterling Winston & Strawn Winston & Strawn Winston & Strawn Winston & Strawn Luthra & Luthra Luthra & Luthra Luthra & Luthra Luthra & Luthra Squire, Sanders & Dempsey Greenberg Traurig Harney Westwood & Riegels Morrison & Foerster

Capital markets

Tokyo

Promotion Counsel and trademark coordinator Partner

Location Jakarta

Singapore Hong Kong Tokyo Hong Kong Hong Kong Hong Kong Hanoi Ho Chi Minh City

Yeong Wai Cheong Tony Chen Rahul Beruar

Singapore Shanghai

Firm Amroos & Partners

Practice IP

Prayudi Setiadharma Rajiv Gupta Benjamin Su Kuang H Tang David Mallinson Cindy Au Nicholas Longley Mai Phuong Nguyen David Lim Au

Amroos & Partners

IP

Latham & Watkins Latham & Watkins Latham & Watkins Mayer Brown JSM Mayer Brown JSM Mayer Brown JSM Mayer Brown JSM

Corporate finance M&A Real Estate Real Estate Construction Commercial

Partner Partner Partner Partner Partner Partner Partner

Mayer Brown JSM

Real Estate

Partner

Jakarta

Rabobank

Partner David Higgins James Comyn Manuel Orillac Ian Nisse

www.legalbusinessonline.com

From London London Paris London

To Dubai Abu Dhabi Abu Dhabi Abu Dhabi

Khattarwong

Rabobank lawyer returns to Khattarwong The former Rabobank head of legal in Singapore, Yeong Wai Cheong, has moved to KhattarWong’s commercial and banking practice. This is a return for Cheong, who practised at KhattarWong in the 1990s before moving to financial Yeong Wai Cheong service house Rabobank as head of legal in its capital markets South Asia division. In the corporate sector, Yeong advised on crossborder and M&A transactions acting for lenders and borrowers. Bingham McCutchen

Sheppard Mullin

Sheppard Mullin’s new IP partner to split time between LA, Shanghai Former Bingham McCutchen IP and litigation expert Tony Chen has joined the Los Angeles office of Sheppard Mullin as a partner in the firm’s IP practice group. Chen, who specialises in complex IP litigation, represents both US and international clients, but with a particular focus on companies founded by ChineseAmericans. Chen plans to split his time between Los Angeles and Shanghai. It’s the fourth boost for Sheppard Mullin’s IP practice in recent times with the firm snaring patent litigator Joy Arnold, trademarks expert Hal Milstein and biotech clinical contracting head Blaine Templeman in preceding months. All three partners were previously with Heller Ehrman. Akash Chittranshi

►► Relocations Firm Freshfields Shearman & Sterling Shearman & Sterling Shearman & Sterling

Top IP judge lands at Fangda Partners A retired judge, who is one of the most distinguished experts in the area of intellectual property law, has joined Fangda Partners as senior advisor to assist in representing the firm’s clients. Dr Jiang Zhipei, the former chief justice of the IPR Tribunal of the Supreme People’s Court, recently retired after serving 18 years at the country’s highest judicial body. In his career to date, Jiang participated in China’s IPR law system reform and handled numerous IPR cases. Jiang’s valuable experience and expertise in IPR cases will be a huge advantage to Fangda’s clients who need IPR and dispute resolution legal services. The firm’s intellectual property and dispute resolution team currently has over 40 attorneys including 10 partners based in Shanghai, Beijing and Shenzhen.

Hong Kong

►► Firm Promotions Name Achmad Hossan

Fangda Partners

FoxMandal

JK Rowling legal advisor heads to FoxMandal A senior IP lawyer who most notably advised JK Rowling on a copyright case has been appointed as copyright head at Indian law firm FoxMandal Little. Serving over six years as partner in rival firm Akash

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News | appointments >>

Chittranshi & Associates, Rahul Beruar has a track record of having advised clients such as Warner Bros, Bloomsbury, Cambridge University Press and various other publishers on copyright protection cases in India. “Copyright enforcement is the need of the time, as India has to have a viable IPR [intellectual property rights] regime to sustain its growth,” said Beruar. The JK Rowling case involved a copyright breach of the Harry Potter series, in a local work titled Harry Potter Samagra.

Baker & McKenzie

Jones Day

Jones Day expands cross-border team Jones Day has responded to the increase in Japanese outbound M&A by appointing former Baker & McKenzie partner David Deck to its banking & finance practice. Bilingual Deck, who specialises in securitisation, cross-border M&A and private equity transactions, David Deck was previously partner at Baker & McKenzie GJBJ Tokyo Aoyama Aoki Law Office, where he regularly advised Japanese clients on M&A. “The acquisition of foreign companies by Japanese companies has seen a 3.7-fold increase compared with the previous year,” said Nobutoshi Yamanouchi, managing partner of Jones Day’s Tokyo office. “In light of globalisation in the corporate landscape, the needs of the clients do not focus solely on corporate law but have expanded to require broader legal services which can deal with domestic, foreign and a variety of other fields of law, including finance law.”

Minter Ellison

Simmons & Simmons

Minters’ Downie heads up to Simmons Simmons & Simmons has poached Minter Ellison partner Brian Downie to head its projects practice in Asia. Downie, who was promoted to partnership at Minter Ellison last year, will work alongside the Brian Downie Simmons energy & infrastructure team. He will focus on M&A, project development, environmental issues and dispute resolution.

LLM from the University of Melbourne. As the firm’s coordinator of patent prosecution works, he has also been active in the Asian Patent Attorneys Association.

Latham & Watkins

Latham promotes Asia associates While law firms around the world are cutting associates from the payroll, at least one has been on a promotion overhaul. Latham & Watkins has promoted 30 attorneys to partnership across its global platform. In Asia, corporate attorney Rajiv Gupta has been promoted to partner in the Singapore office while Benjamin Su and Kuang H Tang will become counsel in the firm’s Hong Kong and Tokyo offices respectively. Gupta has been advising on corporate finance and general securities deals across Southeast Asia, with a focus on the emerging market in India. “He … has played a significant part in further developing our capital markets practice in the region, particularly in India,” said the firm’s Singapore corporate chair Michael Sturrock. Su joined the firm in 2005 from Simpson Thacher & Bartlett, while Tang’s experience in M&A undoubtedly has the firm focusing on the expanding market in Tokyo. Lehman Brothers

O’Melveny & Myers

Lehman Bros lawyer moves to Singapore A former Lehman Brothers assistant general counsel, Jyotirmoy Banerjee, has moved back to private practice, joining O’Melveny & Myers’ Singapore office as counsel in the transactions and capital markets practice. Banerjee’s stint at Lehman Jyotirmoy Banerjee Brothers was as assistant general counsel and vice president in the equities legal division. He returns to private practice having advised on corporate transactions at Shearman & Sterling’s New York office. He has also worked in the solicitor general’s office in New Delhi. His “unique” skills set, said Howard Chao, partner in charge of O’Melveny’s Asia practice, combines corporate and private practice experience across Wall Street to Southeast Asia, and is a real coup for the firm. With the addition the firm hopes to capitalise on opportunities arising from the South East Asian markets. Banerjee said that the growing markets in Asia and the potential unique opportunities prompted his move.

Amroos & Partners

Amroos bolsters IP practice Indonesian firm Amroos & Partners has strengthened its IP practice through the promotion of two of its lawyers. The firm has appointed Achmad Hossan as counsel and trademark coordinator, and Prayudi Setiadharma as partner. Hossan’s three decades of experience in IP-related matters is a huge coup for the firm. As a former director of trademarks of the IPR office, he has been highly active in the industry. Setiadharma began his career with the firm in 2004 after gaining an

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DLA Piper

Piper at the Gates A former DLA Piper consultant has made the move to K&L Gates, where he will become partner in the firm’s Shanghai office. Corporate lawyer Louis Meng will boost the firm’s corporate, M&A and securities practice in the Shanghai office, which

K&L Gates

Louis Meng

opened in April 2008. In his four years at DLA Piper, Meng established the firm’s private equity practice in Shanghai. He has also practised with Paul Hastings and spent five years as general counsel at a Taiwanese aerospace company. “I have learned a lot from DLA Piper in last four years,” said Meng. “They have a commitment to China – I think this is one of the positive experiences I gained.” K&L Gates is continuing its strategic expansion in the Asia region. Hot on the heels of the Shanghai opening, in May the firm secured a merger with Taiwanese firm J&J Attorneys at Law, boosting its numbers with the addition of nine partners. Meng said the firm’s commitment to China was a motivating factor for his move. “K&L Gates has a strong relationship with China and this is exciting, especially with the new Shanghai office opening. From my interaction with the firm’s top management, they are very committed to building the China offices. I see myself contributing to this further expansion.” Goldman Sachs

O’Melveny & Myers

Goldman Sachs lawyer joins O’Melveny & Myers Goldman Sachs’ former legal head James Wood has joined law firm O’Melveny & Myers as counsel in the corporate finance practice. Wood will be based in the firm’s Hong Kong office in the securities enforcement and regulatory counselling group. Previously at James Wood Goldman Sachs Asia as executive director in the legal department, he says the move was prompted by a desire to return to private practice. “I was looking to go back into private practice and O’Melveny provided me with a great platform,” he said. “I had regularly worked with the firm while at Goldman Sachs and Goldman’s had recruited some of its most senior partner hires from O’Melveny.” The appointment also provided the opportunity to work with old colleagues, he says, including Michael Moser and Colin Law, who both worked with him at Freshfields. Although it is a time of uncertainty for the legal sector, Wood remains positive about the value of Hong Kong as a legal hub. “I am confident that Hong Kong is and will always remain a popular destination for lawyers,” he said. “Hong Kong continues to be the most important financial centre in Asia and it should remain as such, provided our leaders show careful foresight. While a number of Asian cities have changed dramatically – mostly for the better – in the past 10–15 years, reports of the ‘death’ of Hong Kong [have been] greatly exaggerated.” Howard Chao, partner in charge of O’Melveny’s Asia practice, is also confident about Hong Kong, with plans to add lawyers to the firm’s regional practice. “We are continuing to invest in Hong Kong because we remain persuaded of Hong Kong’s importance as a leading international centre for the long term,” said Chao in a statement. Asian Legal Business ISSUE 9.1


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Patton Boggs

Dewey & LeBoeuf

Dewey bolsters new Doha office Dewey & LeBoeuf has furthered its Middle Eastern expansion plans by securing two Patton Boggs lawyers for its new Doha office, scheduled to open next year. Partner William Cattan and senior associate Joanna Addison will relocate once the office is operating. Until then, Cattan will be based in Dewey & LeBoeuf’s New York office, while Addison will be at the firm’s London office. Both lawyers were based in Qatar before the move. They have been highly active in the region’s LPG industry, working as legal advisors in Qatar Petroleum’s legal department. They will work with partner Ken Freeling who will be supervising the development of the office from Qatar. “We’re blending top-level hires with strategic relocation of home-grown talent in these key regions,” said firm chairman Steven Davis. “Our clients who operate in the region will benefit greatly from our ‘on-the-ground’ presence in the MENA region’s key commercial locations.”

Freshfields

Freshfields refreshes Middle East presence Freshfields has bolstered its Middle East presence with the relocation of London partner David Higgins to its Dubai office. Strengthening the firm’s 50 lawyer-strong regional group, Higgins will co-head the Middle East and North Africa corporate practice, including the firm’s offices in Abu Dhabi, Bahrain and Dubai and in Saudi Arabia (through a local firm association). “The Middle East has for some time seen a growing level of business activity and is expected to occupy an even more prominent role on the global stage in the years to come,” said Higgins. The firm’s key clientele are based in the region, said Higgins. “This has triggered huge demand for legal services and, in turn, substantial growth opportunities for those firms that can provide truly international support.”

various

Shearman & Sterling

Shearman’s major Abu Dhabi haul Shearman & Sterling has almost doubled its numbers in its Abu Dhabi office following the announcement of a string of partner and associate additions. The firm is transferring three Europe-based partners to the Abu Dhabi office, including London-based M&A partner James Comyn to arrive this month, Paris-based capital markets partner Manuel Orillac midway next year and London property partner Ian Nisse to relocate in 2010. The firm has also secured new additions for the office, including ICC Dispute Resolution Services marketing director Lara Hammoud, former Linklaters senior associate Kelly Li and 11 other associates. The office, one of the first to open in Abu Dhabi, will see its lawyer numbers significantly boosted from 16 to 30. The firm said in a statement that the additions were a response to major growth prospects in the region. www.legalbusinessonline.com

Heller Ehrman

Winston Strawn

Winston Strawn takes on Heller Ehrman lawyers The remains of Heller Ehrman continue to be picked up. Recently, Winston & Strawn added Heller’s entire D.C. international trade group to the firm’s Washington office. Winston also says it will be opening up three offices in Asia – in Hong Kong, Beijing, and Shanghai – filled mostly with former Heller lawyers, pending the approval of the Chinese and Hong Kong governments. Seven lawyers join Winston’s DC office. William Barringer, Christopher Dunn, James Durling, and Daniel Porter all join as partners. Valerie Ellis is of counsel and Ross Bidlingmaier and Matthew McCullough are both associates. “We are very pleased to have such talented lawyers join the firm, and expect them to be a great fit with our core practices and culture,” said Winston chairman Daniel Webb in a statement. Anand & Anand

Luthra & Luthra

Anand & Anand IP team leaves to join Luthra & Luthra A team of IP & entertainment lawyers from Indian law firm Anand & Anand has left to unite with the competition, joining the Delhi office of Luthra & Luthra. Practice leader and partner Ameet Datta brought associates Mohit Lahoty, Himanshu Bagai and Thomas George with him to his new firm, adding a significant boost to the Luthra IP practice. Datta cited the cross-disciplinary capabilities of Luthra as the reason for the move. “We look forward to taking advantage of the great cross-disciplinary synergies that are present at Luthra & Luthra,” he said. Bingham McCutchen

Greenberg Traurig

Go for Greenberg Greenberg Traurig has boosted its numbers with the hire of corporate specialist Go Hashimoto as a shareholder and registered foreign lawyer. Hashimoto joins the firm’s corporate and securities practice Go Hashimoto from Bingham McCutchen’s Tokyo office, where he spent five years advising clients on corporate restructuring and international commercial litigation transactions. He was previously a loan officer with the Japan Bank for International Cooperation. Bingham McCutchen

Squire Sanders

Another lawyer leaves Bingham for Tokyo US-based law firm Bingham McCutchen has lost another lawyer. Litigator Matthew E Digby has been scooped up as partner by Squire, Sanders & Dempsey’s Tokyo office. Digby has previously worked with Squire on defence cases in the US, said Steven Doi, the firm’s Tokyo managing partner.

It is expected that Digby will expand his Tokyo practice while continuing to represent USbased clients. The move follows former Bingham McCutchen lawyer Go Hashimoto’s appointment to the Tokyo office of Greenberg Traurig. Conyers Dill & Pearman

Harneys

Harneys adds to Hong Kong office Offshore law firm Harney Westwood & Riegels (Harneys) has continued its expansion – after a tie up with Cypriot firm Aristodemou Loizides Yiolitis & Co, the firm has appointed former Conyers Dill & Pearman lawyer Paul Lau. Lau will the based in the firm’s Hong Kong office as partner in the corporate practice. At Conyers, Lau had spent five years in the Bermuda office before moving to the Hong Kong office to advise clients on finance, M&A and funds transactions. He has also worked with Freshfields and GE. Linklaters

MoFo

MoFo takes Linklaters’ managing partner Morrison & Foerster has scooped Linklaters’ Tokyo office founder Tony Grundy to expand its global capital markets practice. Grundy will be based in the Tokyo office as partner and lead the firm’s capital markets practice to advise Japanese clients on Tony Grundy English law. “Adding leading English, US and local capital markets lawyers in all of the key financial centres is a strategic focus for the firm,” said the firm’s chairman Keith Wetmore, adding that the addition furthers the firm’s ability to capitalise on the increased cross-border work between Europe and Asia, particularly in Japan. Grundy helped found the Tokyo office of Linklaters in 1987, and for a period was its managing partner. He will now work alongside his “mentor, sparring partner and long-time friend”, MoFo Tokyo managing partner, Fuyuo Mitomi.

Mayer Brown JSM

Party of 27 at Mayer Brown Another firm defying the odds is Mayer Brown JSM, with the elevation of 27 of its lawyers to partnership, including five Asia-based appointments – a sure sign that the firm has moved into its consolidation phase following the merger of Johnson Stokes & Masters and US-based behemoth Mayer Brown earlier this year. In Hong Kong, Cindy Au, Nicholas Longley and David Mallinson will be promoted, while the firm’s Vietnam operations will see two new partners – Hanoi-based Mai Phuong Nguyen and Ho Chi Minh City-based David Lim Au. Across the globe, the firm raised five partners in Washington DC, four in Chicago, three in Frankfurt and New York, two in London and Los Angeles, and one each in its Houston, Palo Alto and Paris offices.

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News | regional update >>

Regional updates

CHINA

36

CHINA

Paul Weiss

Philippines SyCip Salazar Hernandez & Gatmaitan

MALAYSIA

Tay & Partners

SINGAPORE Loo & Partners

INDonesia BT Partnership

INDIA

Singh & Associates

Vietnam

Indochine Counsel

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

Malicious Collusion Prohibited In 1993, as Russian oligarchs snapped up valuable state assets at a discount, China’s legislators set out to draft laws to guard against the same happening in the PRC. Fifteen years and multiple redrafts on, the Enterprise State Assets Law (the “Law”) was passed on October 28 this year and is due to become effective on May 1 2009. The Law sets out a comprehensive framework for the treatment and preservation of “State-Owned Assets”, defined widely as “the rights and interests derived by the state from its investment in various forms in any enterprise”, and extending to cover “State-Invested Enterprises”, i.e. enterprises owned or invested by the state. The Law also contains an array of regulations and punishments aimed at those managers of State-Owned Assets who may be tempted to exceed their powers or abuse their position for personal enrichment. However, while its purpose is more to preserve assets’ value than to prevent their sale, Article 72 of the Law raises serious issues for acquisitions involving State-Owned Assets or State-Invested Enterprises. Article 72 applies to transfers of State-Owned Assets, and to other transactions that involve related persons of a State-Invested Enterprise. It provides that “malicious collusion” (a concept without a fixed definition) in such a transaction would render the transaction invalid if State-Owned Assets are harmed as a result. Although the prohibition of “malicious collusion” already exists under PRC contract law, its inclusion in the Law underlines the government’s determination to use all available measures to preserve the value of State-Owned Assets. In order to minimize the risk that

transactions involving State-Invested Enterprises or State-Owned Assets may be cancelled due to “malicious collusion”, we suggest that parties: • Be transparent in all discussions and negotiations, and keep a full and contemporaneous record that can be produced as evidence; • Ensure the valuation of any StateOwned Assets being acquired will stand up to close scrutiny by regulators; and • Conduct thorough due diligence into onshore sellers and management, and consider the benefits that may flow through to management or their family, directly or indirectly, at the expense of benefits to the State. Legislators have informally acknowledged that Article 72 creates uncertainty, and further guidance may eventually be forthcoming. Until then, once the Law becomes effective, caution must be exercised in such transactions. Written by Peter Davies, associate Paul, Weiss, Rifkind, Wharton & Garrison Hong Kong Club Building, 12th Floor 3A Chater Road, Central Hong Kong Email: pdavies@paulweiss.com Ph: (852) 2846-0377

Philippines

Philippines: Reduction of Legal Reserves As the country experiences an economic slump due to inflation and global financial crisis, the Bangko Sentral ng Pilipinas (BSP), the Philippine Central Bank, recently adopted Circular No. 632 mandating a cut of bank reserve requirements by two percentage points for all peso accounts. The BSP’s latest attempt to address Asian Legal Business ISSUE 9.1


News | regional update >>

inflation and stabilize prices of goods and services was in July 2005, when the institution raised the banks’ reserve requirement 21%. This was in the wake of tremendous pressure on the peso, which fell to Php56.28 against the dollar in one trading session. However, with the adoption of the aforementioned circular, analysts expect that a muchneeded Php60 billion, more or less, will be released into the financial system. As the central monetary authority in the country, the BSP is vested with the power to adopt policies, which may involve alteration of the economy’s monetary supply to stabilize aggregate output, employment and price levels. Monetary policies may mean two things – increase money supply during recession to stimulate spending (expansionary monetary policy) or restrict it during inflation to curtail spending (contractionary monetary policy). By controlling the supply of money, taking into consideration the law of supply and demand, BSP is able to exert some influence on the prices of goods and services. Among the basic tools of monetary policy is BSP’s control over the reserve requirements imposed upon banking institutions. In a nutshell, this policy requires banks to maintain reserves against their deposit and deposit substitute liabilities in the form of deposits with the BSP. Following the contractionary policy, where there is a need to reduce the public’s purchasing power, required reserves shall be increased. In so doing, money actually held by banks and made available for lending to the public shall decrease thereby reducing money in circulation. This, in turn, lowers aggregate demand, which could eventually temper inflation pressures in the domestic economy. On the other hand, to fight economic depression and encourage economic activities, bank reserves shall be reduced resulting to an increase in funds ready for lending by banks, an increase in aggregate demand, which in the long run could fuel inflation pressures in the domestic economy. Sir Isaac Newton once explained the law of inertia in this wise: ‘a body continues in a state of rest or of uniform motion unless it is acted upon by an external (unbalanced) force.’ In the same vein, Philippine economy will continue to roll www.legalbusinessonline.com

downhill unless an external force is exerted to thwart the same. The policy providing for a reduced reserve requirement is a force necessary to boost economic activity in the Philippines. Written by Barbra Jill B. Clara, Associate Sycip Salazar Hernandez and Gatmaitan SSHG Law Centre, 105 Paseo de Roxas Makati City, Manila, Philippines Tel: +63-2-817-98-11 Fax: +63-2-817-38-96 E-mail: sshg@syciplaw.com, syciplaw@globenet.com.ph Website: www.syciplaw.com

MALAYSIA

Measures to address impact of global economic slowdown on Malaysia’s trade and industry The Ministry of International Trade and Industry (“MITI”) recently announced certain measures to mitigate the impact of the world economic slowdown arising from the financial crisis that started in US, on Malaysia’s trade and industry. To stimulate and facilitate investment in the manufacturing sector, the manufacturing licence requirement will be further liberalised. Presently, a manufacturing licence is required under the Industrial Co-ordination Act 1975 for manufacturing companies with a minimum shareholders’ fund of RM2.5 million or employing 75 or more full time employees. Effective 1 December 2008, manufacturing licence will be granted automatically except for activities related to security, safety, health, environment and religious considerations. The licences will be granted without the need for renewal and the licence fee has also been abolished effective 1 June 2008.

Further, import duty on raw materials and intermediate goods to be used for local manufacturing activities will be fully exempted to reduce the cost of doing business in the manufacturing and construction industries. The exemption covers 438 product lines including iron, steel, petrochemicals, chemicals, machinery and equipment. Exemption for other products will be considered if the material will reduce production cost, is not manufactured locally and has no substitution effect and has been given protection for a long period. To further liberalise manufacturing related services sector, the Malaysian government is also contemplating allowing regional distribution centers to source raw materials/ parts/ components from any party as opposed to only from related companies and for international procurement centres to have a manufacturing operation either in Malaysia or outside Malaysia. To facilitate and intensify trading/ business activities, approval for operation of Representative Offices/ Regional Offices will be granted for 5 years as opposed to the current 3 years. Other measures include the full utilization of AFTA and other free trade agreements which Malaysia has implemented, intensifying investment and trade promotion activities including joint collaboration efforts with the private sector in overseas trade promotion activities, expanding the grant for SME business start up to purchase of office and business related equipments and reviewing business licenses and fees by local authorities to reduce the costs of and accelerate the start up of SMEs businesses. Written by Ng Pek Wan Senior Associate Tay & Partners 6th Floor, Plaza See Hoy Chan Jalan Raja Chulan 50200 Kuala Lumpur, Malaysia Tel: +603 - 2050 1888 DID : +603-2050 1968 Fax: +603 - 2031 8618 Email: pekwan.ng@taypartners.com.my

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News | regional update >>

SINGAPORE

SGX seeks public comments on proposed penalty framework for non-delivery of securities Singapore Exchange (“SGX”) has issued a consultation paper seeking public feedback on the proposed permanent penalty framework for non-delivery of securities. For readers who are keen to read more on the proposed framework, the same may be accessed from SGX’s website at www.sgx.com.sg. This is preceded by the implementations of SGX on 22 September 2008 to prevent settlement failures of securities and abusive naked short-selling. Short-selling is the sale of securities or commodity futures not owned by the seller (who hopes to buy them back later at a lower price). The non-delivery of securities occurs when a market participant fails to deliver the sold-amount of securities by the settlement date. The proposed tiered penalty framework aims to penalise when settlement procedures are abused. The integrity of the securities settlement system and exposed settlement risks to CDP could be minimized with the proposal being implemented. A proposed penalty of the higher of 5 per cent of the value of a failed trade or $1,000 has been suggested by SGX. Market participants affected by the interruptions may lodge an appeal with SGX through their broker. Appeal Process Appeals could be submitted by market participants to SGX in cases of nondelivery of securities, with genuine mistakes or other valid reasons being cited. Each of the appeals is considered individually for the waiver of penalties under existing arrangements. Similarly, participants who have been referred to the Disciplinary Committee for the failure to deliver in the buying-in

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market will have the opportunity to present their case before the Disciplinary Committee. Segregation Of Penalties Collected The monies collected from the revised penalty framework will be channeled to a segregated account. They do not add to SGX’s revenues, and will be used towards funding or educational initiatives for market participants. Proposed Amendments to CDP Clearing Rules The penalty framework proposal will be implemented under the CDP Clearing Rules. SGX is also seeking feedback on the proposed amendments to the rules.

Written by Ms Lee How Fen and Ms Eng Hui Ting Ms Lee How Fen Foreign Counsel, Legal Associate (Corporate Practice) Ph: (65) 6322-2205 Fax: (65) 6534-0833 E-mail: leehowfen@loopartners. com.sg and By Ms Eng Hui Ting Corporate Finance Executive Ph: (65) 6322-2237 Fax: (65) 6534-0833 E-mail: enghuiting@loopartners.com.sg Loo & Partners LLP 88 Amoy Street, Level Three Singapore 069907

INDonesia

Coal Energy Business Guide During the last 3,5 years, coal mining investors placed their eyes and ears to the discussion took place between the Government of Indonesia (GoI) and the House of Representatives affecting their business interest from the exploration and exploitation activities in rich mining areas, famoust for their high calories. The long await finally resulted in the release of new Law on Mineral, Energy and Coal that has

repositioned, GoI accordingly as regulatory and supervisory bodies, no longer as business partners. The GoI is capable to grant or revoke business permits until production operational permits, if investors failed to comply with requirements from the prohibition to transfer or assign the permits and annual payment calculated from the coal mining companies net profits since the operation, up to a clear divestment sanction to PT. PMA foreign shareholding at the latest 5 years after production. In this new law, generally there will be no Coal Contract of Work required to govern the rights of GoI and the investors need to adjust their contract with these statutory provisions, although further implementing regulation must be issued soonest to avoid conflict with the current Coal Business Guide exercised in Indonesia since 1967 that shall be refreshed herein below. Pursuant to existing Mining Law (Law No. 11/1967) in conjunction with Investment Guideline (Decree of Chairman of Indonesian Investment Coordinating Agency No. 57/SK/2004), coal mining activities in Indonesia i.e. exploration, development and production of coal from mining areas can still be conducted through: (i) Coal Contract of Work (Perjanjian Karya Pengusahaan Pertambangan Batubara – “PKP2B” or “CCoW”), and (ii) Mining Authorisation (Kuasa Pertambangan or “KP”) schemes. Foreign investors intend to conduct coal mining business must form a foreign investment limited liability company dedicated to perform business activities in coal mining industry (“PT. PMA”) or alternatively could purchase shares of already established PT. PMA subject to the provision concerning the transfer of shares and/or acquisition under Company Law (Law No. 40/2007). To establish the PT. PMA, the foreign investors must first obtain investment approval from Indonesian Investment Coordinating Agency. The rights and obligations of such PT. PMA shall be regulated in the CCoW signed with the GoI. Minister of Energy and Mineral Resources Decree No. 1614/2004 stipulates the procedures for PT. PMA to apply for CCoW summarize as follows : • Filling the application for mining area reservation to the Minister ; • upon the approval, the PT. PMA must apply for CCoW to Director General of Mining or the local authority depending to the mining area reserved for them in order Asian Legal Business ISSUE 9.1


News | regional update >>

to obtain the principle approval ; • upon issuance of the principle approval, the PT. PMA must apply for SIPP (or Pre Exploration Permit). GoI has limited the foreign ownership in the PT. PMA to be maximum 95% while the remaining 5% must be owned by Indonesian citizen and/or Indonesian owned entity. Any future transfer of shares and addition of authorized capital should not result to Indonesian shareholder owns less than 5%. In this regard, Investment Law (Law No. 25/2007) stipulates several investment facilities for PT. PMA who expand their business or undertake new investment in Coal Energy business as follows : • Exemption from or reduction of import duty on the import of capital goods, supporting material for production in a certain period of time and subject to certain requirements; • Exemption from or suspension of VAT on the import of capital goods, or other production equipment that cannot be domestically produced; • Accelerated depreciation or amortization, and in addition, GoI also grants facilitated services and/or licensing to obtain : • rights over land associated with the permitted mining areas • immigration service facilities; and • import service facilities. Written by Tyana Asri Martianti BRI Tower II, 19th Floor Jl. Jend. Sudirman No.45 Jakarta 10210 Indonesia Tel. 62 21 5700 777 Fax. 62 21 5700 877 Email : btpartnership@btplawfirm.com Web : http//www.btpartnership.com

INDIA

LLPs – Taxation Issues In India businesses operate mainly as Companies, Proprietorships and Partnerships, governed by their respective www.legalbusinessonline.com

laws. However, there is a void in the business structure which needs to be filled so as to enable flexibility and high growth in the service sector especially that relate to the professionals. This gap is sought to be bridged by introducing Limited Liability Partnership (LLP) Law, but the aspect of tax treatment of LLPs remains an area of uncertainty, since the LLP Bill’ 2008 states that an LLP will be treated as a firm as defined under the Income Tax Act 1961 for the purpose of taxation; from this the following two implications follow: 1. That on the same basis as an ordinary partnership firm, the LLP will pay tax on its profits after deduction of business expenditure, salaries and interest paid to the partners. Partners will be liable to pay tax on salary and interest receipts, whereas the share in profits is exempt; same as the current provisions of the income tax Act 1961related with Firm. 2. Another way that only the profits in the hands of the LLP partners will be taxed. A L.L.P. will have Pass through Status; the partners will be liable to pay tax on share of LLP’s profits received in their hands. This is also known as tax transparency as prevalent in UK. Of the above two options the second option appears to be logical and acceptable on account of the following two reasons: i. only the LLP partners should be subject to tax and not the LLP itself; ii. the bill has vide its First Schedule (Clause no. 5) prohibited partners of LLPs from accepting any remuneration. This implies that they will be subject to Income Tax in respect of their share of profits received by them. This is, however, contrary to the system of taxation of firms under the I.T. Act. Presently, under the I.T. law, a partnership firm pays tax on its profits after deduction of business expenditure, salaries and interest to partners. Partners are then taxed on their salary and interest, whereas, their shares in the profits in the firm are exempt. Firms are not exempt from tax. As per the First Schedule, no partner of an LLP shall be entitled to remuneration for acting in the business or management. This, of course will apply only if there is no requirement regarding remuneration in the agreement constituting LLP. Hence, if no remuneration is to be paid,

its allowance in the hands of LLP and taxation in the hands of the partners shall not arise. However, practically it is difficult that a partner working as working partners and he will not get any salary or commission for their works. Since the LLP is, visualize of as a company as it is under the Companies Act, it would be just and logical to tax an LLP like a company and ignore the existence of partners for tax purposes like shareholders. If the partners receive any income like interest from the LLP, the income so received would be taxable in the hands of the partners. Even in under UK law, the LLP is a fiscal transparency, i.e., LLP is not subject to taxation despite being a body corporate with separate legal personality and providing limited liability to all its members. Only the members are liable to taxation. The Concept Paper on LLP also provides the following provisions regarding taxation and accounting treatment of transactions; (1) Income Tax and Capital Gains, for the purposes of taxation, any activity carried on by a limited liability partnership with a view to profit shall be treated as carried on in partnership by its partners not by the LLP and, accordingly, the property of the limited liability partnership shall be treated for those purposes as property of the partners. (2) Where a limited liability partnership carries on a trade or business with a view to profit- assets held by the limited liability partnership shall be treated for the purposes of tax in respect of capital gains as held by its partners; and any dealings by the limited liability partnership shall be treated for those purposes as dealings by its partners in partnership (and not by the limited liability partnership as such), in respect of capital gains accruing to the partners of the limited liability partnership on the disposal of any of its assets shall be assessed and charged on them separately. As per the LLP Bill’ 2008, on one hand there is application of current provisions of Income Tax Act related with the taxation of the firm, and on the other hand a LLP will not be liable for tax, rather its partners are liable for taxation, with the advantage of pass through statues of LLP; which will create controversy at the time of practical application of law. Some of the other accounting issues related with LLPs are as follows: 1. Capital gains tax Liability - It is not

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News | regional update >>

clear whether the partners contributing assets towards the Capital at the time of formation of LLP or receiving their share of capital and accumulated profits on transfer of their share, what will be the mode of valuation of assets for income tax purpose and who will pay the capital gains tax on transfer of the assets of a partnership or a private limited company or an unlisted company, upon their conversion into a L.L.P. 2. Stamp Duty Liability on transfer of the Assets - Whether the assets transferred by a partnership or private limited company or an unlisted company at the time of their conversion into L.L.P or in the event of their merger or amalgamation will suffer the Stamp Duty on the book value of assets [what will be the rates of stamp duty and/ or will there be any concessional rates provided by the government and/or what will be the mode for the valuation of assets]. 3. In the bill it is provided that, contributions made by the partners are in form of money or intangible assets.

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Now the ambiguity remains that how it shall be disclosed in the books of account and what shall be the methodology for the valuation of assets; this will create problems at the time of practical application of law. Therefore, it is necessary to make suitable changes in the provisions of income tax related with the taxations issues, because taxation is one the major motivational factor other then limited liability for the partners of LLPs. The introduction of LLPs in India is a good beginning towards a long journey. The hybrid structure of LLP will facilitate entrepreneurs, service providers and professionals to organize and operate in an innovative and efficient manner for effectively competing in the global market. Written By Mr Manoj K Singh (Managing Partner) and Mr. Harsimran Singh (Associate) 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

Vietnam

New regulations relating to internet services On 28 August 2008, the Government of Vietnam issued Decree No. 97/2008/ ND-CP (“Decree 97�) on management, provision and use of internet services, which replaced the former Decree No. 55/2001/ND-CP dated 23 August 2001. Some remarkable changes of Decree 97 in respect of the license required for providing internet services/ information on internet are as follows. Formerly, an enterprise or organization providing internet services are required to obtain separate licenses with respect to internet access services, internet connection

Asian Legal Business ISSUE 9.1


News | regional update >>

services and internet application services, which are granted by the different authorities. However, under new Decree 97, only a single license will be granted by the Ministry of Information and Communication (“MOIC�) for all the said internet services as requested by the applicant. In addition to the websites as governed in the former Decree 55, Decree 97 expands its the governing scope to other kind of the electronic information sites, comprising blogs, portals and the likes which serve the provision and exchange information on the internet environment. Amongst the kinds of the websites, internet content providers license (ICP license) shall be required only for the sites providing general information on politics, economics, culture, society, which is quoted from official resources of the press bodies or from the electronic information sites of the Communist Party and State bodies. This means that websites of enterprises, which provide information about itself, such as company information, products / services information, etc., shall not be subject to ICP license as provided in Decree 55.

www.legalbusinessonline.com

According to Decree 97, the term of an ICP license shall not exceed 5 years with a maximum extension of 1 year. Accordingly, if after a maximum period of 6 years from the issuance date of an ICP license, the holder thereof shall re-conduct the procedure for obtaining a fresh ICP license for website. The reason for this provision may be that the competent authorities consider the re - grant of ICP license as an occasion to check or update the managing data of the website. The ICP license shall be withdrawn if the enterprise or organization does not implement provision of information on internet within 90 days from the issuance date of the license, or if the information provided on internet violates provisions of the prevailing law. The enterprise or organization of which the ICP license is withdrawn shall not be granted new ICP license within one year from the withdrawal date of the former license. Electronic information sites providing the online social services, such as blog, forum, chat and the likes shall not be subject for obtaining ICP license in

accordance with Decree 97, but be required to register with MOIC simply by filing an application dossier for obtaining a confirmation document therefrom And neither ICP license nor registration with the MOIT is required for other kinds of electronic information sites, except for electronic newspapers or websites providing professional application services, which shall be in compliance with certain requirement in the particular field. New provisions of Decree 97 as mentioned above may facilitate business of the enterprises providing internet services as well as encourage Vietnamese enterprises to apply internet services in its business activities, especially for promotion purposes. Written by Nguyen Thi Hong Anh Indochine Counsel Unit 4A2, 4th Floor, Han Nam Office Bldg. 65 Nguyen Du, District 1 Ho Chi Minh City, Vietnam (Tel) +848 3823 9640 (Fax) +848 3823 9641 anh.nguyen@indochinecounsel.com www.indochinecounsel.com

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Seeking the ‘x-factor’ Some firms will make the headlines in 2009, but not all will make them as regularly as the firms on the ALB Watchlist. ALB sat down with partners at each of these firms to discuss how they plan to meet their ambitious goals for 2009, and the sectors and locations they will be targeting

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T

he dust has well and truly settled on what has been, by even the most conservative of measures, a tumultuous year. We have seen economies the world over – paragons of free market capitalism – capitulate, stock markets in free fall, corporate icons like Lehman Brothers, WaMu, Freddie Mac and Fannie Mae collapse under the weight of their own business models, and the greatest economic slump in living memory. Legal markets haven’t escaped lightly, either. Pillars of the legal community such as Heller Ehrman and Thelen have gone and plenty more are experiencing serious discomfort – and this is not to mention the countless numbers of lawyers laid off around the globe. But there is no defeatist talk in Asia. Its markets remain relatively ebullient, brazen even, and its legal markets even more so. Law firms continue to go about business as usual, continue with their expansion and diversification plans, and

continue to hire despite the inclement economic conditions. The law firms on the ALB Watchlist epitomise this approach. All of these firms – the 10 firms to watch in ’09 – have managed to balance the often-competing concerns of ambition, risk and growth with pragmatism; they have identified their niches and discovered that which separates them from the rest. They are very much aware of the ‘x-factor’, that elusive element which all strive to harness but few grasp. It is somewhat intangible and at times seemingly indefinable – it cannot be reduced to simple calculations of headcount or number of offices. If we use their 2008 form as an indication, these firms are set to achieve bigger and better things in ’09. Whether it is pioneering new practice areas or management techniques, striking tie-ups, mergers, alliances, closing the big deals or poaching partners from their rivals, watch for these firms to dictate the play in the year ahead. Asian Legal Business ISSUE 9.1


Feature | ALB Watchlist >>

10 firms to watch in ’09* Game plan: the strategy for ‘09

Ask a law firm to summarise its grand plan, business strategy or corporate goals, and chances are it will offer an “empty” definition. That is, rather than identifying what the plan is, it will tell you what it is not. A sign of the uncertain times in which we live or simply a sign of the inertia that has for so long typified this conservative profession? All the lawyers interviewed by ALB note that an ad hoc approach to business planning is a pitfall in more ways than one: in addition to the possibility that it could lead to strategic direction problems, it could also strip firms of the vital yardstick that allows them to weigh achievements against goals and targets – impairing their ability to mount the challenge for market share.

“With our firm structure now in place, and the strength of an international network behind us, we are poised to grow in Asia and I’m excited by the opportunities we have”

F irm name

 ome H jurisdiction

 o. of offices N worldwide

Established

Bird & Bird

  UK

20

1846

Cains

  Isle of Man

3

c. 1900

 arney Westwood H & Reigels

 British Virgin Islands

5

1960

Jin Mao Partners

  China

2

2008

Jisung Horizon

  Korea

3

2008

Lister Swartz**

  Hong Kong

1

2008

Navin & Co

  Singapore

1

2007

 ishith Desai N & Associates

  India

3

1984

Phoenix Legal

  India

2

2008

V&T Law Firm

  China

3

2007

*Firms listed in alphabetical order **Operates in association with Edwards Angell Palmer & Dodge (EAPD)

Martin Lister, Lister Swartz /EAPD

www.legalbusinessonline.com

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Feature | ALB Watchlist >>

“In 2009, we will be looking to hire people laterally, people who will come with passion and go with passion, if at all” Nishith Desai, Nishith Desai & Associates

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Michael Gagie, the head of Harney Westwood & Reigels’ Hong Kong operations, explains. “The need to set clear goals – developing a business plan and incorporating within that lofty, yet attainable goals – is probably one of the most important elements for success in Asia,” Gagie says. “This is certainly one market where there are plenty of opportunities, but also plenty of challenges. As in all markets, you need to be aware and mindful of local customs, the business culture and the importance of having local language capability.” Mike Edwards, a director of Cains in Singapore, agrees, relating this point to his firm’s entrance into the Singapore market last year. “When we were thinking about entering Asia, we had a blank sheet of paper and three choices: the Middle East, Hong Kong or Singapore,” he says. “When Singapore was chosen, we were acutely aware of the need to set targets for our new office; we knew we just could not rest on the fact that we were the only Isle of Man law firm in Singapore for success. “The way we set up in Singapore means that we have an office there that can stand on its own two feet – our plan, like some others, was not to set up an office with a view to referring work back to Europe.” But it’s not just something limited to offshore law firms. Abhishek Saxena, a founding partner of Indian firm Phoenix Legal, says the need for a cogent, comprehensive plan is even more important for firms that are starting out. “As a firm that’s new in the market, we knew we had to have a solid idea of what we wanted our firm to be very early on – an organisation obsessively focused on client service of the highest standard and the growth of its people. It helped that our partners were all on the same plane – we were all very familiar with each other, we all had a common vision. This is, and will remain, our cardinal organisational principle.”

Phoenix Legal opened its doors in late 2008 and was formed by a breakaway contingent of three partners from Indian firm Trilegal (Saxena, Saket Shukla and Sawant Singh) and a Kochhar & Co banking partner (Manjula Chawla). Martin Lister, a principal at Lister Swartz (which operates in Hong Kong in association with trans-Atlantic firm Edwards Angell Palmer & Dodge (EAPD)), notes that establishing such a plan is the first essential ingredient in mounting a new-year challenge. “We want to be the ‘go-to’ firm for non-contentious insurance corporate and regulatory matters in Hong Kong, which I believe is an achievable target given the depth of our global insurance practice,” says Lister. “We’re not opening in Hong Kong just to sit on our hands. We have a central management plan and that will direct our strategy in the short term.” However, while Lister and others agree that having such a plan and sticking to it is vitally important, they also suggest that there is a need to be flexible in one’s approach to business planning from issues such as being selective in choosing one’s potential targets right down to the way lawyers tackle legal issues. Lister explains: “We had always intended to open an office in Hong Kong. “What we did was look at various models: a greenfield approach, bolting on my practice to a large firm, or a smaller firm option where we would identify a successful practice and merge with it. “In the end, we opted for the last as a foundation on which we could build.” The establishment of EAPD in Hong Kong involved the merger of Lister’s insurance regulatory practice with Swartz Solicitors, a sole practitioner firm, to form Lister Swartz. According to Lister, this approach has afforded the firm a great deal more flexibility in terms of both strategic direction and

Asian Legal Business ISSUE 9.1


Feature | ALB Watchlist >>

business planning. Navinder Singh, founding partner of boutique shipping practice Navin & Co in Singapore, agrees. “Being a compact practice, we give our clients direct and personalised access to the partners’ combined experience of 25 years.” “Being flexible isn’t all about size,” argues Matthew Laight, the Greater China managing partner at Bird & Bird. “Flexibility, especially in the current climate, means being able to offer clients different solutions to problems; solutions which may not have been previously considered.” For Nishith Desai, managing partner of Nishith Desai & Associates, flexibility and innovation are inextricably linked: “Innovation breeds flexibility. Building an innovative mindset is the way that smaller players can challenge the larger players in the market. Innovation is a global mindset;

“Our strong team of partners working across four offices in Asia are developing innovative services and fee structures that are designed to save costs for clients” Matthew Laight, Bird & Bird

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it’s something that can cross borders.”

Leveraging location

“Things are not easy at the moment,” says Zhang Zhi, a founding partner at Chinese firm V&T. “But in many ways it’s not as tough as the situation confronting lawyers in the West. It has been said that it’s a good time to be a lawyer in China, and I have to agree.” A good time to be a lawyer in Asia, in fact, a point on which the lawyers interviewed for this article concur. “People have been talking about the rise of Asia as a sort of bloc for a while, now,” says Gagie. “The economic troubles in Europe and the US have only served to focus people’s attention more on Asia, looking to it as a sort of saviour. This should benefit lawyers when things bounce back but, as always, it’s more easily said than done.” It is not simply a case of setting up shop in Asia and bringing lawyers on board, according to Gagie, or ‘going on undirected growth’, as Desai notes. To succeed, firms must leverage a number of factors: location; technical knowledge and industry expertise; the age-old issue of client care; and, in some cases, their home jurisdiction. The latter is arguably most important to offshore law firms. Edwards, whose firm advises on Isle of Man (IOM) law to its Asian clients, explains. “The IOM is not a particularly well-known jurisdiction in Asia at the moment. It has definitely been a well-kept secret, but it is a leading international financial centre.” “The IOM’s profile has been raised significantly by our entrance into Singapore, but we have something of an extended role to play here. Not only do we have to sell ourselves and develop our brand; we also have to promote our home jurisdiction.” “People have talked about the rise of Asia for some time,” says Gagie. “The economic troubles in Europe and the US have only served to focus people’s attention more on Asia, looking to it

“In 2009, we will be looking for more high-calibre people to join us. When the IPO market comes back, we want to compete for the headline transactions” Michael Gagie, Harney Westwood & Reigels

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Feature | ALB Watchlist >>

“The Chinese legal market is so competitive, to lead you must have the full-service capacity. We have this; we are ready to challenge the bigger firms in the market” Zhang Zhi, V&T

as a potential source of growth in an otherwise recessionary market. “This should benefit lawyers when things bounce back, but it’s hard for anyone to predict – outside of a very quiet first quarter – what the economic landscape of 2009 will look like. “The most exciting thing for us is our opening in Cayman. There is a new generation of wealth generators coming out of BRIC countries [Brazil, Russia, India, China] and a large percentage of them are choosing to incorporate their businesses in either BVI or Cayman. “BVI still remains the largest offshore domicile in the world but Cayman has long been held out as the first choice offshore domicile for investment funds. “The ability to be able to offer our clients seamless advice covering both jurisdictions is a tremendous boost for our practice and will enable us to compete more effectively in the marketplace.”

Being opportunistic but patient

There is a measure of opportunism in the approach taken by each of the firms listed in the ALB Watchlist. Identifying market niches, finding gaps and establishing a presence within them are all essential ingredients in achieving that thing known as the ‘x-factor’. Being a step ahead of the competition is identified by Zhang as equally important, especially in a legal market as heated as China. “You really have to be a full-service firm to compete in China; there is little space or demand for specialists here,” Zhang says. “But what we saw was that there was a need to not only service the big centres in China, but the emerging ones as well – areas such as Shenzhen where people are on the up, growing their business, and they realise there is a need for strong legal protection. Being first into areas like this is so important – it helps you get to the top.” While the short-term success is

46

tangible for domestic firms, however, success is a work in progress for international firms. For those which are just starting out, patience is a cardinal virtue. “China and, I would probably say, all of Asia, is a long-term play,” says Laight. Bird & Bird not only brought onboard a number of high profile recruits in the second half of 2008; it also opened its second mainland China office in Shanghai and finalised a lucrative global association with Singaporean firm Alban Tay Mahtani & de Silva (ATMD). “Our association with ATMD rounds off our presence in Asia very nicely. Being in Singapore, a key regional hub, gives us an ideal platform for future growth,” Laight explains. Indeed, all of the firms profiled here pursued similar expansionist policies in 2008: Navin & Co struck a regional alliance with Hugh Frazer International; Jisung and Horizon Law Offices merged to form Jisung Horizon; V&T subsumed three smaller Chinese firms, as did Jin Mao Partners; Harneys, Cains and Nishith Desai all opened new offices; and Lister Swartz and Phoenix Legal started operations. But it is not all about growth through setting up offices everywhere, says Laight. “Some firms may take the view that you should open a large number of offices and build your reputation by having lots of flags in the ground – that’s not the key, now.” Then, what is the key? According to Desai, firms should lean on a ‘green’ parlance for guidance: “Thinking sustainable and developing a sustainable growth model is the key – becoming sustainable and using your surroundings, your environmental conditions, well.” Saxena knows about the latter all too well, having branched out in the midst of less than favourable economic conditions. Notwithstanding, he, like many other lawyers in the region, is counting on external stimuli for growth.

Asian Legal Business ISSUE 9.1


Feature | ALB Watchlist >>

“The India story is what we are banking on,” he says. “The strength of India, and our core competencies, will push us forward into the future and we will use this to our advantage.” While riding on the growth potential of one’s location is vitally important, all ’09 Watchlist lawyers agree that the changes in client behaviour and expectations that are being catalysed by the current economic slowdown are an area of untapped possibility that presents lawyers with boundless opportunities to grow, to challenge the larger players in the market and poach more blue-chip clients. Desai and Saxena both cite an unmistakable shift in corporate India’s attitudes to the legal profession, a shift which heralds a much broader role for lawyers in the country. “When I started my career, there

were few good transactional lawyers in India. A litigating lawyer usually doubled as a corporate lawyer and it’s fair to say that Indian clients were generally not accustomed to using them for their corporate work and interacted with them as little as possible,” says Saxena. “Now, the situation has almost reversed. Indian clients see the value that lawyers can add to their operations.” Desai observes: “The rise of India has effected a change in clients. Lawyers are now called on to do things which they may not have had to do before – to be more market-knowledge oriented, give commercially sound advice and tap their industry specific knowledge more closely.” A trend by no means confined to India, China or even Asia but one which if mastered, will bring firms success. ALB

“In 2009, we will establish our footprint in Asia through our market. It will be a testing time for everyone, but our focus will be on developing our practice in Asia” Mike Edwards, Cains

www.legalbusinessonline.com

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FEATURE | banking & finance >>

The sun never sets on a diversified legal empire. As skies darken over capital markets practices, restructuring and insolvency practices provide the silver lining to the gathering clouds

darkside

Return of the

E

xuberant is not quite the right word. One should never be overly enthusiastic about a dramatic rise in insolvencies. But the great thing about the legal industry has always been its resilience in tough economic times. Banking & finance practices have copped a battering this year. The worst-affected lawyers have been left wondering whence – and indeed when – their next pay cheque will come. Major firms have collapsed. But there is a measure of balance. As banking & finance partners ponder the loss of staple work, they can take comfort that the wheels are 48

still spinning in restructuring and insolvency teams.

Banking & finance: the general picture

While markets have changed dramatically in the past three months, Andrew Lockhart, head of Baker & McKenzie’s global banking & finance practice group, says the Andrew Lockhart, full impact is yet to be Baker & McKenzie felt on Asian economies. “Obviously, the traditional bank lending work and the syndicated

lending market has slowed down,” he says, “but like many firms, we picked up a share of the Lehman Brothers insolvency/close-out work.” One area Lockhart says is still running reasonably well is asset finance, nevertheless noting the “lag factor” for such projects – for example, his firm is at present working on the financing of aircraft which were ordered three or four years ago. Project finance is expected to remain strong because of an enduring demand for infrastructure. “Many projects in this region are backed by governments and sovereign entities, so they tend Asian Legal Business ISSUE 9.1


FEATURE | banking & finance >>

and M&A often go hand in hand: “It’s early days yet, but we can expect to see more assets up for sale and the hedge funds and vulture funds becoming more active.” Loo Choon Chiaw, Loo & Partners One struggling area is capital markets, but Loo Choon Chiaw, managing partner of Loo & Partners, says that the drop in IPO work may be partially offset by a rise in other related areas: “Controlling shareholders of listed companies who are facing financial problems are now more keen to dispose of their equity stake,” he says. “Work relating to RTOs may thus increase. With the decline of share prices, more shareholders of listed companies may find it worth their while to delist their listed vehicles, and voluntary delisting or privatisation work would thereby increase. Also, with the crisis and increase in corporate failures, more regulations may be introduced by the relevant authorities and corporate governance and compliance work would increase.”

Capital markets: India perspective

Given that capitals markets are not exactly flourishing at the moment, it came as a surprise when Clifford Chance recently announced the establishment of a dedicated team of lawyers in its Singapore office focusing primarily on capital markets transactions in the Indian market. It emerged that the firm originally came up with the concept in September when the Indian markets were looking more healthy, but partner Rahul to be more bankable,” says Lockhart. “We’ve already seen a large stimulus package from China and another package from Hong Kong directed at small- and medium-sized enterprises, and one would assume that stimulus packages from other Asian governments won’t be very far off.” Lockhart is not writing off M&A either: “Banking and financial institution M&A is an area we think will be big – we’ve already had some work from clients and there’s a strong potential for further work.” Jones Day partner Simon Powell agrees, commenting that insolvency www.legalbusinessonline.com

“Prior to the current market turmoil, the Indian companies all had huge expansion plans, driven by domestic demand in areas such as infrastructure, power plants and real estate” says Guptan. “That demand hasn’t gone away and you can’t just shelve these sorts of plans for long periods of time. So the demand for capital is still there.” Guptan says that in September there were a number of IPOs in the pipeline, each attempting to raise upwards of US$1bn. The plans were subsequently put on hold following the dramatic economic events of October. “These companies probably can’t realistically pursue capital raising on that scale, but they still need capital. So once economic certainty returns, it’s likely that we’ll see the IPOs return, albeit on a more moderate scale.” The economic climate will mean that firms will need to devise more innovative methods of raising capital for their clients. “For example, alternative options such as non-voting equity may become more prevalent,” says Guptan. “But if the economic uncertainty continues, only those with a proven track record will have much success with raising capital. In that scenario, we’d see more private equity-type deals and mezzanine financing.” The other space to watch, according to Guptan, is the Indian foreign bonds market. “There are a lot of convertible bonds that come up for redemption between 2009 and 2011. We’re already starting to see companies looking at the restructuring of convertible bonds in order to avoid redemption pressure.

“This time around, we’re seeing the core business itself in trouble, usually because demand for products has dropped as a result of the economic recession in the US and Europe” Stephen Eno, Baker & McKenzie Guptan says that the firm continues to regard Indian capital markets as an important strategic space. Clifford Chance is prepared to weather a few months of uncertainty in order to pursue this long-term investment.

It’s an area that we think will be fairly active.” The Indian fiscal budget is due in February and Guptan is expecting to see further economic stimulus from the government. “Based on past history, Cont. p52

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FEATURE | banking & finance >>

Banking & Finance Q&A Global Financial Tsunami and Beyond: ALB: As you have personally experienced and witnessed the last Asian financial crisis, can you share your thoughts on that crisis? LCC: As many of us will recall, the Asian financial crisis which started in mid-1997 was initially triggered off by a drastic fall in the value of Thai baht, soon thereafter, the problems spreaded like wild fire to Indonesia, Malaysia, the Philippines, South Korea and the rest of Asia, and even beyond Asia to Russia and Brazil! After the Asian financial crisis, the Asian countries in general took serious steps to improve their financial systems. With the recovery of the general economy, the Asian countries also managed to gradually build up stronger foreign exchange reserves.

Loo & Partners LLP 88 Amoy Street Level Three Singapore 069907 Tel : (65) 6322-2288 Fax : (65) 6534-0833 Email : ccloo@loopartners.com.sg Website: www.loopartners.com.sg Loo & Partners LLP (Registration No. LL0800566K), registered with liability in Singapore under the Limited Liability Partnerships Act (Chapter 163A), was converted from the firm “Loo & Partners” to a limited liability partnership with effect from 28 May 2008.

Loo Choon Chiaw

ALB: Are the capital markets in Asia dead? Loo Choon Chiaw: My answer is an emphatic ‘NO’. The genesis of the present global financial meltdown can be traced back to August 2007, when the US subprime mortgage market collapsed. Even the current capital markets in the US, which are badly hit by one crisis after another, the latest relates to the uncertainty of the proposed bailout of the auto industry, and the possible collapse of General Motors, Ford and Chrysler should the bailout plan fail to be approved by the US Congress, are by no means dead. Figuratively, they are seriously wounded. The injury, though serious has not been fatal. While the general economy of Asia has been adversely affected by the global downturn, in a relative sense, the wound inflicted on Asia has not been as severe as that inflicted on the US. There is certainly no sign of any burial-service concerning the Asia financial markets as of now, or in my opinion, within the foreseeable future.

50

ALB: As you have said, one of the legacies of the Asian financial crisis last decade was that many countries in the region had built up strong foreign exchange reserves. In your opinion, what actions will the Asian countries take, in reliance of their strong reserves, to prop up their economies in the next few months? LCC: The action which each country within Asia may take, or more accurately, has taken, to address the present global downturn varied from country to country in the light of its unique domestic situation. There can be no generalisation. The measures adopted have been as alike as chalk and cheese. For instance, the PRC, a relatively closed economy with a population of approximately 1.3 billion, has announced that it will loosen its credit conditions, reduce its taxes and embark on a massive RMB4 trillion stimulus infrastructure building package, which will be spent over the next two years, to boost domestic demand in key areas, such as low-income housing, rural infrastructure, water, electricity, transportation, technological innovation etc. In contrast, a package to stimulate domestic consumption would not work in Singapore, a tiny city-state with a population of approximately 4 million, and an open economy with an estimated 60 cents of every dollar spent domestically leaking out of the domestic economy. Instead, Singapore has announced that it will utilise its S$2.9 billion package to help its workers to keep their jobs, to upgrade their skill sets, to reduce business costs in general, and to assume part of the credit risks of the banks when they lend money to businesses.

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FEATURE | banking & finance >>

Q&A with Loo Choon Chiaw; Loo & Partners LLP ALB: Are Shariah-compliant financial instruments the key to weathering the credit crisis? LCC: Islamic banking activities are banking activities which are carried out in accordance with Shariah principles. Basically, such activities must avoid riba, i.e. must not involve the payment or receipt of interest, must prohibit gharar, i.e. must not be uncertain, but must posses an element of risksharing and profit-sharing, and ought to focus on halal activities, i.e. be confined to Islamic permissible activities. Advocates for Shariah-compliant financial activities have emphasized the unique characteristics inherent in such activities. For instance, every Islamic finance transaction must be supported by an underlying and genuine trade and business-related activity, which has the effect of rendering the gearing of such a transaction lower than that applicable to a conventional finance transaction. Further, the requirements of the sharing of risk and profit between the funder and the entrepreneur have the effect of ensuring that the funder is just as careful and vigilant as the entrepreneur in carrying out the requisite due diligence investigations before funding the transaction. Thus, those advocates argue that Islamic financial activities, as compared to conventional financing activities, are likely to be less speculative, more prudent and transacted with less leverage. Accordingly, those financing activities would be in a better position to weather a credit crisis. I am not in possession of any statistics on the comparison of the default rates of Islamic financing transactions versus conventional financing transactions under the prevailing global downturn. It will be insightful to review and analyse the relevant statistics, when available.

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ALB: What is the potential of the Shariah-compliant banking business? LCC: The total value of Islamic invested assets today is estimated to be in excess of USD800 billion, compared to only USD150 million in 2000. Before the current global financial turmoil, some analysts have forecasted the value of the Islamic invested assets to overshoot USD1 trillion by the end of 2008, with an annual growth rate of 10% to 15%. The phenomenal growth in the value of Islamic invested assets was predominantly fueled by the investments from the wealthy Gulf States. In Asia, Islamic nations such as Malaysia, Indonesia, Brunei, and non-Islamic nations or regions, for instance, Singapore and Hong Kong SAC have all been acutely aware of the lucrative opportunities presented by the Shariahcompliant banking activities and have, without exception, allocated much resources to review, revise or change their legal, regulatory and fiscal framework to ensure that Islamic banking activities are not disadvantaged vis-Ă -vis the conventional banking activities, with a view to promoting Islamic banking activities. ALB: Would the growth in the volume of Islamic financing transactions benefit lawyers? LCC: Absolutely. Competent legal advice and services are essential in structuring financing transactions, whether they are conventional finance transactions or Islamic finance transactions. Indeed, as Islamic finance is still in its early development, it presents opportunities to lawyers who are familiar with such transactions. At a micro level, legal skill shall be needed to ensure that the legal documents are consistent with the applicable Islamic principles. There will be great challenges and opportunities for lawyers with expertise in conventional finance to use their cumulative experience in developing innovative Islamic financial products by borrowing concepts used in existing conventional finance which are not inconsistent with applicable Islamic principles. On a macro perspective, in view of the relatively short history of Islamic finance, a uniform regulatory and legal infrastructure for Islamic finance is yet to be in place. This also means that it is not too late for lawyers who aspire to develop expertise in Islamic banking to get into the act.

ALB: How will the current global downturn affect legal practice? LCC: As the current financial crisis worsens, less legal work shall be available because businesses will enter into fewer deals. Competition for a smaller pie will be more intense. There will be a drastic drop in the volume of certain types of legal work, including, real estate work (as fewer purchases are made), IPOs (as IPO aspirants are holding back their listing plans), general banking work (as banks are cutting down on new loans). In contrast, there will be an increase in the volume of other types of work, for instance, (1) Acquisition and RTOs (as controlling shareholders of listed companies which do not perform well are now more willing to dispose of their equity stakes in those listed vehicles), (2) Delisting or Privatisation (when controlling shareholders are more ready to take their listed vehicles private when their share prices are traded at historically lows), (3) Restructuring and Insolvency works (as we witness more corporate collapses) and (4) Corporate Governance and compliance work (when the regulatory authorities introduce more regulations, directives and guidance notes in response to the financial crisis). ALB: How should lawyers view the current global financial crisis? LCC: What goes down must come up. Law firms who could weather through the current financial storm shall emerge stronger and be ready to capitalize on the next upturn!

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From p49

we wouldn’t be talking about bailout packages, but we would likely see new structures and regulations aimed at encouraging innovation,” he says.

The tide comes in

“In a sense, we’ve gone beyond the restructuring cycle and are seeing more of the pure insolvency work” Simon Powell, Jones Day

The real hot topics at the moment across banking and finance practices are, of course, restructuring and insolvency. Powell Simon Powell, says that it has been a Jones Day long time coming. “It’s something we’ve been expecting for some time, but it’s taken almost a year to eventuate. Since the beginning of September, it’s really begun to build up into a huge wave of work.” Neil McDonald, partner at Lovells, says the main categories of work he has seen are creditors with exposure to the larger Lehman Brothers-type scenarios, leveraged companies defaulting on bank debt and companies not able to pay interest on convertible bonds they have issued. Loo says that some clients are also seeking restructuring advice and services in response to specific laws and regulations. “In the light of the coming into force of the new PRC Enterprise Income Tax Law, we’ve been instructed by a handful of PRC-based listed clients to revise their group corporate structure with a view to reducing the quantum of withholding tax – from 10% to 5% – when their PRC subsidiaries pay dividends to them outside the PRC,” he says.

Comparing 1997 with 2008

There is a certain sense of deja vu for some restructuring and insolvency experts. Stephen Eno, head of Stephen Eno, Baker & McKenzie’s Baker & McKenzie Asia Pacific Banking & Finance practice group, led the firm’s original specialist team, which came together to handle work from the 1997 Asian financial crisis. After the work from that crisis tailed off in 2003, the group had a few quieter years but is now well and truly back in the game with major restructurings such as the US$500m EganaGoldpfeil 52

Group restructuring and the US$450m Panjapol Pulp/Paper Industry PCL debt restructuring. But Eno says that the parallels between 1997 and 2008 only go so far. “In the Asian crisis, the company often had a currency mismatch between borrowings and income or an unprofitable “non-core business” as companies tried to diversify,” he recalls. “These were easier to restructure as there was usually a viable core business which could be saved. This time around, we’re seeing the core business itself in trouble, usually because demand for products has dropped as a result of the economic recession in the US and Europe. Sometimes the core business is no longer that viable, and that’s a worrying sign.” The restructuring work has become more complicated, says Powell: “You’ve got derivatives and other exotic products, which have become far more prevalent since 1997. For example, an investor can buy a product in Hong Kong without realising that they’re effectively investing in, for example, property in the US.” Not only is the work more complicated, but the sheer scale of the task at hand is daunting. “The markets have grown and the amount of the debt is so much larger because debt was so freely available,” says McDonald.

Restructuring vs insolvency

Eno says that the current climate is seeing struggling companies go from restructuring to insolvency far more quickly than they did during the last financial crisis. Part of the reason, he says, is that banks are less tolerant in the current climate because they have other bigger challenges. “If you look at some of the companies that have recently faced financial difficulties, it’s remarkable – and slightly disturbing – how quickly provisional liquidators have been appointed.” The other factor holding back restructuring, says Eno, is the continuing economic uncertainty: “There are people out there with cash, but they don’t have any confidence in valuations. They’re not going to pay half price for an asset if there’s a chance that they could get it for quarter price next month.” Powell agrees: “Investors are very Asian Legal Business ISSUE 9.1


FEATURE | banking & finance >>

edgy at the moment and a number of banks have placed an effective freeze on new investment. There’s currently a lack of ‘white knights’ that are willing to step in and rescue a company. In a sense, we’ve gone beyond the restructuring cycle and are seeing more of the pure insolvency work.” Another reason for proceeding straight to insolvency, says McDonald, is where fraud or other irregularities are discovered in a company’s accounts. That destroys whatever fragile chance may have existed of restructuring, and McDonald says that this is occurring more often. “It was possible in the foregoing years to conceal an inability to pay back debt,” he says, “once that relationship of trust is lost, the matter goes straight to insolvency.” And the prediction for the future, says Loo, is probably more of the same: “We’ll see more corporate failures unless there’s a firm and concerted effort on the part of the financial institutions to assist good corporate customers to tie over temporary cash

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flow problems – and that will only happen with strong encouragement from the relevant authorities.”

Team structure

The link between restructuring and insolvency means that the two practice areas are often spoken of in the same breath, but two Neil McDonald, very distinct skill sets Lovells are involved. “Restructuring has a commercial focus and you really need to understand what each of the parties is trying to achieve,” says Eno. “In insolvency, you’re dealing with court process and liquidators. That requires different skills with different expertise.” Accordingly, Eno will usually involve his partner from the insolvency practice, Gary Seib, who will normally take over the running of a matter where the restructuring fails and winding-up proceedings commence. Lovells in Asia has a combined team dealing with restructuring and

insolvency issues. “The [team structure] is not hugely important, but clients seem to like the idea of having a single team dealing with distress matters – they only have to deal with one partner, for starters,” says McDonald.

Getting the work

Firms often secure work through the relationships they have with particular clients, but Eno says that is not necessarily the case with insolvency and restructuring work. “It’s a specialised area, and firms really need to demonstrate that they have the requisite depth and capabilities,” he says. “These matters can encompass a whole range of practice areas, from real estate to tax to employment law to IP, just to name a few.” While Baker & McKenzie gets some restructuring and insolvency work through existing clients, Eno says it is more common for creditors’ steering committees to call for expressions of interest: “This area of practice tends to be more reputation and skills based, rather than relationship based.” ALB

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ALB special report | Korea >>

ALB ASIAN LEGAL BUSINESS

Korea 2009

2009 한국 특별 보고서

Rising to the

challenge

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In the midst of undeniably gloomy economic indicators, lawyers in Korea have plenty of cause for optimism. Imminent and deep-seated capital market reform promises to open many doors, M&A remains healthy and cross-border transactions are on the rise. ALB reports from Seoul on how the legal sector, itself reforming, is viewing the future

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ALB special report | Korea >>

►► Korean legal market liberalisation: foreign lawyers’ gain to be domestic lawyers’ pain?

K

orea’s daily broadsheets have a penchant for hyperbole. By their measure, or at least according to the headlines they publish, Korea has been in recession for the last 10 years – its economy languishing since the trials and tribulations of the Asian financial crisis (AFC) late last decade, and with little hope of a recovery even now. It’s just as well, then, that the nation’s newspapers are not taken as historical records, much less an accurate barometer of the last 10 years of Korean economic history. But while the first two points noted above may be dismissed as simple exaggeration – by anyone’s reckoning, the last decade was one of relative prosperity for Korea – the current state of affairs in the ‘land of the morning calm’ is anything but prosperous. It’s 2009 and the Korean won lost almost half its value against the US www.legalbusinessonline.com

The number of lawyers practising in Korea is expected to double in the next seven years as the Korean government steps up moves to liberalise its legal services market in line with its obligations under the recent free trade agreement with the US. But while liberalisation is expected to raise standards in the industry and bolster the number of lawyers able to handle the complex M&A and cross-border work that is driving the development of Korea’s nascent financial services industry, it is also set to drastically affect domestic ‘independent’ lawyers – those attorneys who do not operate within the corporate space – with many expected either to leave the profession or fall into bankruptcy. In 2007, the Korean bar association stated there were 10,176 attorneys registered to practise in Korea, of whom less than 200 were foreign. Both figures 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 the 1,000 previously suggested. These statistics do not bode well for domestic lawyers. “The job market for lawyers is one of the most competitive in the world,” says a senior partner at one of Korea’s biggest firms. “Because of the nature of transactions happening in Korea at the moment, there is no real need for counsel to be admitted here, so unless some of the younger lawyers are particularly brilliant, they may find themselves having to serve independently.” Of the lawyers who pass the Korean bar exam each year, only the top 30–40% find gainful employment as state prosecutors or judges, or associates at the top seven law firms. However, while these top six – Kim & Chang, Bae, Kim & Lee, Yoon Yang Shin Kim & Yu, Shin & Kim, Yulchon and Lee & Ko – account for more than half the KRW1.3trn law market, they employ only about 10% of Korean lawyers. “It is 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 free fall. In 1997, the average was around 57.2 per year; now the figure is closer to 31.5 and is expected only to fall further in the years ahead. “This is certainly regrettable, but it’s part of the liberalisation process,” ALB’s source states. “What needs to be done is to change the nature of legal education in this country – to make Korean lawyers more marketable internationally.” And indeed, the Korean government and the bar association are already making moves in this direction, 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 seeking employment overseas – or, ideally, right here in Korea,” the source said.

For more Korean deals, watch out for our Korean Deals of the Year insert in ALB Issue 9.5

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ALB special report | Korea >>

on liberalisation: What Korean lawyers say “Open [legal] markets are far more dynamic, more focused on client service and more globally competitive” Luke Shin, Kim & Chang

dollar in a little under a year; foreign direct investment (FDI) both pledged and planned has fallen dramatically; demand for Korean exports has waned; and 40 years of fiscal policy premised on vigorous FDI-led economic liberalism is jeopardised. And all that comes even before you mention a minor detail called the ‘global financial crisis’ that is currently gathering momentum in Asia. An economy, and a nation, more in need of stimulus there never was – but Korea and its legal profession have never been scared of a challenge. From an overhaul of the country’s capital market and legal sector liberalisation to new and novel forms of investment combined with a predicted boom in chaebol-led M&A in the second half of 2009, many measures designed to revitalise the Asian tiger are in play. 56

But it remains to be seen whether there is cause for optimism in these solutions, or – as many of the lawyers ALB surveyed for this report suggest – they are mere attempts to 소 잃고 외양간 고친다. (mend the barn after losing the cow).

The FISCMA ‘big bang’: Starting is half the task

Thatcher-esque in scope and Reaganistic in vision, the long-awaited overhaul of the country’s capital markets may be just the tonic for Korea’s ailing economy, say lawyers. “The capital market reforms are a paradigmatic change to the way of thinking in Korea,” says Wonhyo Han, partner at Lee & Ko. Luke Shin, a foreign attorney at Kim & Chang, agrees. “[The reforms] are a step in the right direction – a move to be more regionally and globally competitive,” he adds.

“The beneficiaries [of liberalisation] will be young lawyers who have the qualifications and can speak English. Young partners at Korean law firms may be poached as well” Yong-Jae Chang, Lee & Ko

“Good or bad – we have no choice. Although liberalisation may adversely affect Korean law firms, we have been preparing for this for a long time – I know one firm started as long ago as 1984” Hee Chul Kang, Yulchon

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ALB special report | Korea >>

►► Korea’s largest domestic firms* Name

Total number of lawyers

Managing partner

Worldwide offices

Kim & Chang

380 Young Moo Kim

4

Lee & Ko

237 Yong Suk Yoon

3

Bae, Kim & Lee

231 YS Oh

4

Yoon Yang Shin Kim & Yu

181 multiple

3

Shin & Kim

170 Doo-Sik Kim

2

Yulchon

164 Chang Rok Woo

2

Jisung Horizon

160** Jae Doo Shim

3

This list does not purport to be exhaustive. Figures do not include paralegals, of counsels and patent attorneys *Current as at September 2008 **Based on partner and lawyer numbers listed on the firm’s website

But it remains to be seen whether Korea and its nascent financial services industry are prepared for such a change, and able to bear the pressures it will exert – much less willing to embrace it. The rationale for these reforms is an ambitious undertaking to establish Seoul as northeast Asia’s financial and commercial hub by attracting the world’s leading asset management

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companies to open their regional headquarters there. And, at the same time, expanding the prerogative of at least one domestic financial institution will make it a serious regional and international player. At its core, the aim of the reforms is to take away the impediments that are widely regarded as inhibiting the development of a sophisticated financial services industry in Korea.

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ALB special report | Korea >>

“The act will remove restrictions that separate securities, futures, asset management, trust services and other financial services businesses. It will provide a blueprint for innovation in the industry,” says Han. The consolidation brought about by the reforms is equally important, say other observers. “The sector has been sorely in needed of consolidation for a while now. It was important to pave the way for the entrance of foreign players, but just as important to get the domestic sector into good shape as well,” says Yong Jae Chang, another partner at Lee & Ko. “The act is going to consolidate the local industry and we should also see the emergence of domestic banks,” says Tony Dongwook Kang of Bae, Kim & Lee. “We should expect the rise in consolidation to affect competition and so yield gains in efficiency to improve the allocation of capital and help the sector generate long-term growth.” But whether the optimism of lawyers is well founded and the reforms work to achieve their stated objectives remain to be seen, particularly because the reforms are set to come into effect in the midst of the most inclement economic conditions ever seen in Korea.

“The act is going to consolidate the local industry and we should also see the emergence of domestic banks” Tony Dongwook K ang, Bae Kim & Lee “The reforms are needed, yes, but their actual implementation will be challenged by the economic environment – most notably the large foreign exchange problems we now face,” says Chang. “Korea is probably not fully prepared for the reforms at this point in time,” adds Hee Chul Kang, a partner at Yulchon. “There are still restrictions to doing business here compared to other countries, fewer technical experts and fewer English speakers. The turbulence overseas may have refocused the attention of the West on the importance of Asia, but I don’t think we are going to see Seoul become the next hub as a result of these reforms.” So, maybe Seoul becoming the northeast Asian financial hub is a stretch – or at least, probably not achievable by 2012, as stated by President Lee Myung-Bak. What we can look out for in the short term,

►► Financial Investment Services and Capital Market Act (FISCMA) – Korea’s ‘Big Bang’: key points • Popularly referred to as Capital Market Consolidation Act • Comes into effect February 4, 2009 • To create a financial ‘big bang’ in capital market • Shift to functional regulation: Reclassify financial investment services, financial investment products and investors according to their economic nature • Financial functions of the same nature to be governed by the same regulations regardless of the financial institutions engaged in the transaction • Introduction of a comprehensive system: Adopt a broad definition of ‘financial investment products’ and include them all in a new regime to keep pace with rapidly developing financial investment products • Expand the scope of permissible products for financial investment companies and the coverage of investor protection regulations • Expanded business scope: Allow integration of all financial investment services; allow accessory services; adopt a system for introducing brokers; allow forex services in connection with financial investments • Upgrade investor protection systems: Put advanced investor protection mechanisms in place; establish a system to prevent conflicts of interests • Expand the scope of securities subject to registration statement/regulation, including indirect investment securities and beneficiary certificates

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Asian Legal Business ISSUE 9.1


ALB special report | Korea >>

however, is a flurry of M&A activity in the domestic financial services industry. At the moment, about 50 companies are registered as full-service investment banks in Korea, of which many – if not most – are facing an uphill battle to survive in a deregulated market. It is bad news for bankers, but great news for lawyers – all of whom also expect an M&A surge, albeit on a smaller scale, in the near future. “It’s quite generally accepted that the new regulation could play a role in creating more transactional work in Korea,” says Chang. “The banks that want to stay in the sector are going to have to diversify to remain relevant. However, the more likely scenario is that they will become casualties – absorbed by the larger players – and the number of investment banks will reduce over the next two years.”

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M&A and rationalisation in the crowded brokerage industry is already occurring. Last November Kookmin Bank acquired Hannuri Investments and Securities, and has stated that there is plenty more to come. The Industrial Bank of Korea (IBK) has had KRW1trn (US$1bn) added to its acquisitions war chest and CJ I&S has been hitting the recruitment trail in the lead-up to its planned 2009 IPO. In addition, Woori I&S intends to merge with a broker yet to be named, to reach KRW5trn (US$5bn) in net assets, and both Seoul Securities and NH I&S have been talking up the prospects of M&A as a route to expansion. All this is not to mention KBS’s now ignominious race for a stake in Lehman Brothers’ Asia operations in September 2008. But whether such activities continue through 2009 remains to be seen. As, while the complexion of the financial

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ALB special report | Korea >>

services industry may alter, more profound change – ‘1980s London’-type change – may be much further off. This is because no matter how serious the financial crisis unfolding in Korea at the moment becomes, the one that FISCMA is going to be launched into is unlike anything ever seen before and most certainly more grave than the one that decimated share prices late last decade.

The calm before the storm: M&A upside

While consolidation in the country’s financial sector is expected to provide M&A and banking & finance lawyers with a slipstream of deals in the midto short term, longer-term projections remain sketchy. Indeed, ask any Korean lawyer to don their soothsayer cap at the moment and chances are you will get a response that’s utterly noncommittal – a unanimous reply of it’s simply too early to tell what will happen. Is this evidence of the conservative nature of the legal profession in Korea or simple pragmatism? ALB’s research suggests it’s probably – marginally – more the latter. For, while there may appear to be a steady stream of work coming out of the financial services industry for Korean lawyers, we must not forget the comparatively small size of this sector in the country’s economy. The relevant question is how much work lawyers can derive from an industry that has only 50 companies? It pays, then, to cast the net a bit wider. Despite Korean lawyers’ pragmatic foreboding this year’s empirical data alone suggests that there is more than enough evidence to be genuinely optimistic about the general M&A outlook moving forward. In the first three quarters of 2008, Thomson Reuters statistics show that cross-border activity involving any Korean companies was up by almost 85% to US$17bn from US$9bn in the comparable period last year. And, while most of this total was comprised of capital investment from Europe and the US, it is interesting to note that the bulk of it is made up of Korean companies investing abroad 60

►► Speaking their minds: Korean lawyers’ biggest concerns for the year ahead • Global financial crisis • Legal market liberalisation & competition • Recruitment • Regulatory change • Legal education • Changes to lawyers’ role

42% 22% 18% 11% 4% 3%

42% 3% 4%

22%

11%

18%

Source: ALB research

– a trend that Shin notes has rolled steadily through the last five years. “When we used to speak of M&A, we would traditionally talk about it being inbound, but given the developments over the last couple of years, there has been an ongoing story of outbound M&A by Korean companies.” Hyung Jin Kim, a partner at Yulchon, agrees. “Outbound M&A is now more popular. Most of the clients I and my other partners speak to – particularly Hyung Jin Kim, of the larger companies Yulchon but also those of some smaller ones – are taking the position that probably the first or second half of next year will be a good time for outbound investment,” he says. At this point, one may be forgiven for thinking that the current discussion is about the M&A prospects for zaibatsu and not chaebol – so striking are the similarities between the two. Both have reached the maximum level of growth allowable in their home markets – hence the need for strategic

overseas acquisitions – and both have strong balance sheets – hence the need to clear their cash reserves. The only discernible difference it would seem is the strength of local currency, as the won is considerably weaker than the yen at the moment. Nevertheless, Chang believes that the current situation may be simply too enticing for strategic investors in Korea, so long as they have sufficient appetite for risk. “Korean companies need to be bold if they are going to make such outbound investments,” he told ALB. “For strategic investors – companies that are healthy and have a lot of cash – it makes sense to acquire interests overseas – in the US or elsewhere. If things can be bought at a good price, we expect to see a lot of activity in 2009.” “We are all waiting for the dust to settle a little,” says Shin. “But if we look beyond that, Korean companies must check out overseas markets and compete globally – in 2009 they should be more aggressive.” Needless to say, aggressiveness and looking overseas have never been problems for Korea’s intensely nationalistic chaebol.

“When we used to speak of M&A, we would talk about it being inbound. But given the developments over the last couple of years, there has been an ongoing story of outbound M&A by Korean companies” Luke Shin, Kim & Chang Asian Legal Business ISSUE 9.1


Firm Profile

Lee & Ko

“The Year of Covered Bonds” for Korea?

D

uring the second half of 2008 (especially after the subprime crisis blew up in its full scale), many Korean financial institutions have been considering the issuance of covered bonds for the first time as an alternative source of funding and the Korean regulatory authority, the Financial Services Commission, supports covered bonds (in particular, “structured” covered bonds) as a new and attractive source of funding and will review the possibility of amending its existing ABS Law or enacting a new law to facilitate a more sound legal structure for issuance of covered bonds. The covered bonds have been widely accepted in Europe for many years and some 20 European countries have enacted laws to enable covered bonds. US covered bonds also made its first appearance in 2006 and Korea is hoping to issue its first “structured” covered bonds (without specific covered bond law in place) by early 2009. A typical covered bonds structure involves investors (or bondholders) who will be given two distinct rights of recourse against the issuer (usually a bank): (i) a right to request redemption of the outstanding covered bonds and (ii) an exclusive right to the covered assets (which would enjoy bankruptcy remoteness). In principle, covered bonds are not securitisations in that, in a mainstream covered bonds transaction, there is no transfer of the assets to a special purpose vehicle and the assets are identified and placed as a security for the bonds (but such pool of assets is not isolated by a true sale). Further, in substance, the bondholder of covered bonds would have a dual recourse against the issuer and the covered assets. Covered bonds are now receiving greater attention in Korea mainly because of a lower financing cost due to the availability of a higher credit rating (than the crediting rating given to the issuer) for such covered bonds. However, Korea is faced with more difficulty because there are many legal hurdles to overcome and many Korean banks as potential issuers of covered bonds are currently trying to come up with a solid structure which can be used until a new legislation is passed for covered bonds in the future. There are a couple of structures for covered bonds which have been discussed among legal scholars and practitioners recently. One is a “structured” covered bonds structure which

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involves a transfer of the cover assets by the issuer to a trustee (by way of a management and disposition trust agreement) and such trustee provides a security to secured the bonds to be issued by the issuer. There is a favourable Korean Supreme Court case in 2003 which allows bankruptcy remoteness in such case, although some legal scholars and legal practitioners have different views. Further, it brings another layer of cumbersome perfection measures to be undertaken especially if the covered assets are mortgage loans because, under Korean law, (i) a notice in writing must be sent out to, or a written consent must be obtained from, each obligor (under the applicable mortgage loan) at the time of (x) the transfer of the assets to the trustee and (y) the creation of a security interest over such assets held by the trustee and (ii) a security interest over mortgage rights must be registered with the relevant real estate registry. Such notice (or consent) must have a fixed date stamp affixed to be valid against third parties. Another structure being considered is somewhat similar to a UK-style covered bonds structure (using secutrisation techniques) which involves (i) the issuance of covered bonds by the issuer, (ii) the transfer of the assets in the cover pool (e.g., mortgage loans) to a special purpose vehicle by the issuer and (iii) a guarantee from the special purpose vehicle to guarantee the issuer’s obligations to the covered bondholders (and the creation of

a security interest over such covered assets). To add more complications, two tier special purpose vehicles (both onshore and offshore) which have been commonly used in crossborder ABS transactions by Korean issuers are also under review now. Even if it is legally permitted under Korean law, it remains to be seen as to how the international covered bond investors would readily accept a rather unfamiliar structure out of Korea. It is expected that, unless the international financial market becomes unable to absorb covered bonds issued out of Korea, the first covered bonds will be issued by no later than the first quarter of 2009 because both Korean financial institutions and the Korean regulatory authorities are eager to see it happen sooner than later. Thus, 2009 may be “the Year of Covered Bonds” just like it was “the Year of the Securtisations” for Korea exactly a decade ago.

By Wonkyu Han and Yong-Jae Chang (Lee & Ko) For further queries, please contact: Wonkyu Han (Partner) and Yong-Jae Chang (Partner) LEE & KO Tel: +82-2) 772-4000 Fax: +82-2) 772-4001/4002 E-mail: wkh@leeko.com / yjc@leeko.com

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ALB special report | Korea >>

From Russia with love: Two-way investment

In search of FDI, Korean companies need only look northwest to Russia which, spurred on by petro and gassydollars, is itself looking keenly to pick off strategic targets across the world. “Russia is a very lucrative market for Korean companies,” says Tony Dongwook Kang. “We have seen a spike in the number of Korean companies investing in Russia and many of the former CIS states over the last year.” For Kim, such investment is most appealing to strategic investors. “Russian investment is a long-term play,” he says. But not surprisingly, the global financial crisis has already taken its toll. “Activity was quite high in the last half of 2007, but it has certainly eased now. And, while I wouldn’t say things have ground to a halt, the slow-down is definitely noticeable,” he adds. But while Korean investment in Russia remains relatively high, the same can’t be said of investment in the other direction – despite popular perceptions that see the two countries as geo-political bedfellows, and the best efforts of the Korean government. The Russian foreign ministry values trade between the two countries at almost US$20bn this year alone, although only US$3m of that was contributed by Russia – an investment imbalance of huge proportions by anyone’s measure, and one the Korean government is intent on redressing. In early November 2008, the government launched a raft of tax incentives and subsidies in a pitch designed to increase the levels of Russian investment in Korea. As part of a threeyear plan, Seoul intends to offer investors a five-year corporate and income tax exemption and remove customs duties on capital goods for three years. In addition, Russian companies also stand to benefit from a 15-year local tax exemption program and the refund of a certain percentage of their investment in any given project. The timing of this could not have been better as, in the past, Russian companies openly declared their intention to invest in Korean assets, only to shy away from 62

doing so because of the prohibitively high price of such assets. But just how much of this is wishful thinking? Is Russian investment in Korea good for more than just the one-off deals like Russian automaker TagAZ’s investment in a parts plant in Chungnam, or KoreaGas’s accord with Gazprom? Or, for that matter, could it be the nexus through which Korean companies can break into the lucrative Russian market? Shin calls for some perspective, especially in relation to the latter. “While there is two-way interest between Korea and Russia, Europe, the US, Japan and the PRC will continue to be the major markets going forward,” he states. “And while there is Russian companies’ activity – and vice versa – that we probably hadn’t seen previously, Russia as a market will not displace the major ones Korea has used traditionally.” Such views are echoed by many lawyers, with all noting that whereas instructions vis-à-vis Russia were paltry, interest in China is fast becoming all-consuming.

Yellow Sea narrows

“[Chinese interest in Korea] is certainly an interesting phenomenon and one we are seeing more and more,” says Han. “We have been approached by many Chinese companies and Chinese funds that are interested in making strategic investments in Korean companies, especially in the automotive and electronics industries.” He adds that the firm’s Beijing operations have been ‘very busy’ of late. Hee Chul Kang cites a similar trend, but it is his Korean clients who are showing more of an interest in China. “Although partly motivated by the poor state of things in Korea, our clients are looking more to China,” he says, suggesting that the trend of Korean companies using China as an export base for their EU and US operations is shifting. “The mindset of clients setting up in China has really changed. They are starting to look at China as their home market – and as an independent one that has endless opportunities.” ALB

Snapshot: Korea’s BIGgest deals ►► SK Telecom–Hanaro Telecom Share acquisition US$1,200m Firms: Kim & Chang; Shin & Kim; Cleary Gottlieb

►► LS Cable–Superior Essex US$1,200m

Firms: Kim & Chang; Cleary Gottlieb; Bae, Kim & Lee; Wachtell, Lipton, Rosen & Katz

►► New Songdo International City Development US$2,700m Firms: Bae, Kim & Lee; Kim & Chang

►► Doosan–Ingersoll-Rand Company Acquisition US$3,900m Firms: Bae, Kim & Lee; Linklaters

►► Shinhan Card Co Term note program US$2,000m Firms: Bae, Kim & Lee; Allen & Overy

►► MBK Partners and Macquarie Korea–C&M acquisition US$1,450m Firms: Shin & Kim; Bae, Kim & Lee; Kim & Chang

►► E-Land Group Hannover Sale US$2,200m

Firms: Bae, Kim & Lee; Kim & Chang

►► Kumho Asiana Consortium–Korea Express interests acquisition US$3,929m Firms: Shin & Kim; Bae, Kim & Lee

►► Acquisition financing for Hi-Mart Co US$1,950m Firms: Lee & Ko; Yulchon

►► Sale of Daewoo Shipping & Marine Engineering Co US$6,000m Firms: Lee & Ko Asian Legal Business ISSUE 9.1


ALB special report | Korea >>

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63


FEATURE | masters degree >>

Mastering

the Masters

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Asian Legal Business ISSUE 9.1


FEATURE | masters degree >>

With the rise of Asian economies and lawyers from around the world converging on the region in droves, the question of where to obtain academic qualifications has never been more relevant. Globalisation has made obtaining a Masters a crucial step towards a career in the world’s legal hot spots

T

here has been much debate over the years as to whether an LLM degree is beneficial or even really necessary. The general consensus among scholars, however, is that a Masters has become a distinct advantage in a much tougher legal market.

‘Shop yourself up’

Gregory Bowman, associate professor of the International Law Centre at the Mississippi College School of Law, says an LLM is a sufficient way to ‘shop yourself up’ to potential employers, especially if your initial degree was obtained from a relatively lesser known school. “If you went to a regional school, an LLM is a way to improve your cache on the market. ‘I have a Juris Doctor from Regional State University’ generally will carry less weight than ‘I have an LLM from Harvard/UVA/ Chicago’,” he says. “You are proving, in essence, that you can run with the pack at a national law school. That is definitely worth something.”

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An undergraduate degree is simply becoming not enough, especially since it is often bound by local regulations and heavily focused on domestic law. “The LLM gives lawyers the opportunity to extend their legal knowledge beyond the borders of their country,” says Professor Lee Burns, Associate Dean for postgraduate coursework programs at the University of Sydney. “With so much business today being cross-border, it gives lawyers the opportunity to gain a basic understanding of different legal systems, and the international instruments that regulate cross-border business, trade and investment.”

Getting ahead internationally

It is commonly understood that a Masters can act as a stepping stone for those wanting to practise overseas. While some jurisdictions require a three-year degree to practise locally, in some areas, such as New York, this can be bypassed by a one-year equivalent LLM.

“I am today a US corporate lawyer because of the LLM programs I attended” Rajiv Gupta Latham & Watkins

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Numbers enrolled 2007/08 (Full time)

Numbers enrolled 2007/08 (Part time) Number of nationalities in 2007/08 (Part-time intake)

Total students enrolled 2007/08

Degree in law required

24

Mar, July

Mar, July

English

300

30

1,200

2

1,500

Yes

Australia

13

Full time/ Part time

12

24

Feb, July, rolling

Feb, July, rolling

English

89

25

467

19

556

No

University of New South Wales

Australia

3

Full time/ Part time

12

18

Mar, July

Mar, July

English

56

16

351

2

407

No

Chinese University of Hong Kong

Hong Kong

3

Full time/ Part time

12

24

Sep

Sep

English

142

9

90

5

232 Yes

National University of Singapore

Singapore

7

Full time

10

Aug

English

169

42

N/A

169

Yes

Monash University Law School

Australia

6

Full time/ Part time

12

24

Rolling

Rolling

English

78

N/A

N/A

N/A

78

Yes

Melbourne Law School

Enrolment month/s Part time

Study mode

*In order of total number of enrolled LLM students

Number of nationalities in 2007/08 Full time intake

Language

12

Australia, UK

Enrolment month/s Full time

Length of program part time (months)

Full time/ Part time

University of Sydney

No. of programs 3

Country/campus locations

Length of program full time (months)

FEATURE | masters degree >>

Source: Financial Times

►► Financial Times LLM course listing 2008 Master of Laws ASIA-PACIFIC providers*

“There has been substantial reporting in recent years about US college students choosing to study abroad for their college degrees, rather than at US universities” Gregory Bowman, University of Sydney 66

Rajiv Gupta, a counsel at Latham & Watkins, has two LLMs. Gupta says his second Masters paved the way for his international career. “I am today a US corporate lawyer because of the LLM programs I attended. The LLM gave me an opportunity to take the NY bar exam and become a NY-qualified lawyer, and also get a job as a US corporate lawyer at Davis Polk & Wardwell,” he says. According to Bowman, law firms generally value degrees that incorporate knowledge of international law. “Gaining exposure to the US legal system … can make [overseas students] more marketable in their home countries,” he explains. That an LLM degree is a good investment for overseas students studying in the US is also the view of Michael McCann, Associate Professor of Law at Vermont Law School, especially since globalisation

has increased the importance of international cooperation. “With our increasingly global economy, opportunities for international law seem to be growing, and more and more US law firms are either opening offices in other countries or entering into business relationships with law firms in other countries,” McCann says. “So, for many students from other countries, an LLM degree is probably a good investment of their time and financial resources.” Gupta attests to the need for crossborder knowledge. “With more US companies doing or expecting to do business in India, a US LLM would be considered more favourably by employers in India for representing foreign clients because a US LLM would serve as evidence of familiarity with US laws and the business environment.” Asian Legal Business ISSUE 9.1


FEATURE | masters degree >>

The ‘Asian experience’

The global financial crisis has hit the US legal market hard and, although Asia has not been immune to the fallout, its spreading effects have seen a string of law firms redirect their geographical focus, especially in the last few months. Bowman says that the rise of Asia’s economies will see more Asian students thinking locally when considering further education. “There has been substantial reporting in recent years about US college students choosing to study abroad for their college degrees, rather than at US universities,” he says. “I’m not talking about a semester or year abroad; I am talking about a full degree. The perceived benefits of staying home are less, so fewer people stay. In light of this, I do expect that in the coming years we will see a clear trend of Asian students forgoing graduate study in the US and instead choosing to pursue their graduate studies at one of the many excellent universities in the Asia-Pacific region.” Burns agrees that the financial crisis has been a catalyst for the shift in market focus. “There’s no doubt about this, particularly in the emerging economies such as Singapore. [The shift] to the Asian region and those universities with strong a LLM program will become increasingly popular with students from all over the world.” Well on top of the ball, the National University of Singapore has long been forecasting the rising popularity of Asian LLM programs. This year, the university is expecting the number of applications from students outside Asia to increase even further. Moreover, the

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university says that student numbers from growth economies such as China, India and Indonesia have steadily risen in the last five years. “Students from these countries now possess vastly increased spending power, and have been pursuing LLM studies abroad in an aggressive manner,” says Tan. “A large number end up in North America but, lately, many have opted to stay within Asia as they recognise the increasing importance and relevance of their own continent. “At the same time, more and more North American and European students are coming to Asia for their LLMs, attracted by the dynamism and rise of Asian economies as well as the superior working and networking opportunities.” According to a report by the Financial Times (see table, p66), the National University of Singapore and the University of Sydney have two of the most highly coveted law programs in the Asia-Pacific, and thus the two highest numbers of enrolments. The University of Sydney, at which LLM students represent 30 nationalities, has a regional focus which has proved particularly popular. In 2009, the faculty will be offering a string of specialisations and subjects including Asia Pacific Environmental Law, Chinese International Tax, Dispute Resolution Asia, Japanese International Tax, Law and Investment in Asia, and so on. In addition, its law faculty has two offshore programs in the region – the Shanghai Winter School and a new program in Japanese Law at Ritsumeikan University. ALB

“The LLM gives lawyers the opportunity to extend their legal knowledge beyond the borders of their own country” Lee Burns, University of Sydney

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FEATURE | document management >>

It was the

computer 68

Asian Legal Business ISSUE 8.6


FEATURE | document management >>

‘Computer glitch’ horror stories abound in every office, but for legal departments and law firms dealing with sensitive information on a daily basis, IT solutions are available to make sure the panic does not soar to a whole new level

I

n the year’s biggest bankruptcy deal, Barclays’ acquisition of Lehman Bros’ assets, a computer glitch tied a prominent US law firm in a knot over a spreadsheet document which gave their client – Barclays – an extra 179 contracts. A first-year associate in charge of an excel document containing the Barclays contracts did not know that 179 of them were marked as ‘hidden’ in the spreadsheet. Then, when the document was reformatted, the entries were revealed, unnoticed by the associate. So, who to blame? Some who heard the story commented that proofreading a file consisting of 24,000 cells was not humanly possible. Some blamed the spreadsheet program’s lack of security and its vulnerability, both of which are often exploited by hackers. Yet others suggested that the problem could have been prevented by a semiautomated process or a dedicated software program. According to Canon Singapore’s Edwin Han, law firms require document management solutions more than other businesses because of the highly sensitive information handled and document-intensive nature of the industry. “Managing documents and the information they contain properly is crucial to legal firms’ success,” he says. “It not only helps them achieve significant returns on investment – by

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enhancing productivity and costefficiency – it also gives them a distinct and significant edge over competitors.” Electronic document management systems (EDMS) have proliferated steadily in the market over the last decade, partly because of the risks posed by relying on hard-copy documents in an increasingly information-reliant age. A case in point often cited is the prominent law firm that lost an immeasurable number of documents following the demise of its office in the World Trade Centre on 11 September 2001. It relied entirely on the old manila-folder storage method, so staff had to start again manually, painstakingly piecing case information together – which would have taken a few minutes to do by electronic systems. The risk factor is one reason why several firms have shifted towards EDMS over the years – among them, Middle Eastern law firm Al Tamimi & Company, which adopted EDMS because of the security aspects. “We needed to ensure reliable document security and backup,” says practice development manager, Ted Glendening.

Security and safety

“Data security is the buzzword,” says Han. “Firms are scrambling to ensure the safety and integrity of their information.” When this – the life-blood of a law firm – can be damaged or

leaked, security becomes a high priority in choosing EDMS. Han says that while it is true that the only way to stop intruders accessing sensitive information – even if it has been deleted – is to destroy the hard drive itself physically, there are ways to make it difficult for anyone to try. Canon has security features that allow information to be encrypted before it is even written to the hard drive. So, even if someone is able to access the file or the print job, says Han, the person would have to be able to decrypt the file or print job to make any sense of the information it contains. “There is also a feature that physically overwrites the text on the hard drive with useless or meaningless information to remove whatever was previously there. Once this is done, it is next to impossible to get to it.” What happens when someone picks up a sensitive document after it’s been sent to the printer? Software with a password-protected feature can ensure that only authorised users are able to print from their mailbox – with a relevant password. “Also,” says Han, “print jobs are held on the server and can only be retrieved at the printer after an appropriate identification method – such as a password, contactless card, biometric etc – is applied.” ALB 69


FEATURE | In-house Legal Summit >>

ALB In-house Legal Summit: Beijing 2008

Over 250 delegates from companies and organisations across a wide range of sectors attended ALB In-house Legal Summit Beijing 2008 on 6 November to discuss the role of legal counsel in globalising businesses and in the current global financial turbulence

“F

inancial crisis” and “global challenges” were the two most frequently used phrases at the ALB Beijing In-house Legal Summit 2008. The Beijing Summit was the final in ALB’s in-house summit series for 2008 and was the largest of the year. The one-day event lined up seven workshops, 16 main speakers and 11 exhibitors, and attracted more than 250 delegates from nearly 100 organisations and companies to attend. Zhang Wei, head of the legal department of the Industrial and Commercial Bank of China (ICBC) headquarters, opened the summit with a keynote address on the evolving roles and responsibilities of in-house legal departments during the globalisation of their companies. He pointed out that while a large number of Chinese companies have become stronger and wealthier and are actively expanding their businesses and markets into overseas jurisdictions, the role and the nature of work in in-house departments of these companies are changing from a single-jurisdiction focus to a multijurisdictional approach. Never before has the role these in-house lawyers play assumed such importance. Zhang shared his

70

department’s experiences, saying that today his legal department has to understand and ensure companies are compliant with the legal environment and regulatory framework in all different jurisdictions that they are operating in; they must assist companies in managing an increasingly sophisticated array of multijurisdictional legal risks and issues; and they must prevent a single legal matter in one jurisdiction from developing into a world-wide public relations crisis. Responding to the evolving roles and global challenges, Zhang and his department have adopted a number of measures which have been proven effective. In addition to the continuation of improving the quality and management of the in-house departments, and educating the board of executives and senior management to recognise that the in-house legal function is a core part of the business operation, Zhang also highlighted – during his speech – the importance of working with external counsel. “External counsel are increasingly being instructed to help in-house departments overcome gaps in capacity and expertise in high-stakes transactions,” said Zhang. “Their unique specialist expertise and resources are very valuable to the healthy development of globalising companies.” ALB Asian Legal Business ISSUE 9.1


FEATURE | In-house Legal Summit >>

In-house summit workshops Antitrust: Grandall Legal Group (Beijing)

Mergers & Acquisitions: Broad & Bright

With the newly effected AntiZhan Hao Monopoly Law as the hottest topic in the global business community, Grandall Legal Group’s Beijing executive partner Dr Zhan Hao and partner Wang Xiaoping provided an insightful look into this new legislation and the challenges in the enforcement of the AML.

With China’s legal and regulatory Lawrence Guo framework governing M&A activity becoming increasingly sophisticated, Broad & Bright partners Lawrence Guo and David Wang gave a comprehensive review of recent development in the legal regime affecting M&A transactions, and detailed a number of effective solutions and strategies to get deals done.

CCH China With the aim of ‘creating value for professionals’, CCH China designs and publishes legal products specifically for the local market.

LexisNexis

Intellectual property: Lifang & Partners

Customs & international trade: Sandler, Travis & Rosenberg Xie Guanbin

Both multinational and domestic companies are increasingly making strategic use of IP as a competitive differentiator. Lifang & Partners, a specialist, full-service IP law firm, shared their extensive industrial expertise and market knowledge to help companies come to grips with China’s evolving IPR legal environment.

Partner in charge of Asia practice Jiang at Sandler, Travis & Rosenberg, an Zhaokang international trade and customs law firm, Jiang Zhaokang took a close look at customs, international trade and supply chain compliance issues concerning domestic companies and how to formulate strategies that take advantage of international trade rules.

Run Ming Law Office The art of legal practice: Zhonglun W&D Law Firm

Employment law: TransAsia Lawyers

Isabelle Wan

One of the most popular workshops in this year’s Beijing in-house legal summit. Employment law expert Dr Isabelle Wan, head of the employment law practice in TransAsia, highlighted the major reforms affecting employers’ rights and obligations under the new, more regulated labour and employment-law regime.

Lu Hada

With extensive experience in assisting large companies manage their legal risks, Dacheng’s associate Lu Hada and senior partner Zhang Hong outlined key processes and approaches in the development of effective legal risk management plans in enterprises. Several case studies were provided for a deeper understanding of the subject matter. www.legalbusinessonline.com

With offices in Beijing and Shanghai, Run Ming is committed to providing total business legal services. The firm’s core partners are experienced lawyers with over 20 years in legal practice.

Senior partner of Zhonglun W&D Wang Hao provided a unique Wang Hao opportunity for in-house lawyers to understand the role and function of external counsel. He covered a range of topics including how external counsel can add value to in-house teams, and the relationship between in-house and external counsel.

Deheng Law Firm

Associate sponsors

Legal risk management: Dacheng Law Offices

LexisNexis is a leading provider of comprehensive and authoritative legal, news and business information and tailored applications. It offers China’s professional community a wide array of products and services.

With 230 legal staff, including 37 partners, and offices in Beijing, Jinan and Shanghai, Deheng has been recognised as one of the fast growing firms in China and a leading player in the Northeastern region.

China Legal Career CLC has an international network that spans the US, UK and Hong Kong, and specialises in placing legal professionals for corporations and law firms, including general counsel, legal directors, counsels, partners and associates. Focusing on the upper echelons of the legal market, CLC counts Wall Street, Magic Circle and Fortune 500 companies as regular clients.

Thomson Reuters Legal Westlaw is one of the world’s primary online legal research services for lawyers and legal professionals and is a part of West and Thomson Reuters. It has had a successful global launch of Westlaw China, a new database with primary and secondary sources on China.

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In-House Legal Counsel — Leading MNC, Hong Kong Worried about the global meltdown? Join this expanding, secure NYSE-listed company at an influential level as legal counsel. You will establish a new department for a new division and manage all legal matters in the APAC region with focus on a broad range of commercial transactions such as contract drafting/negotiations, litigation management, data protection and corporate governance. Candidates with minimum 5 years’ PQE in a law firm or corporate in-house department and solid experience in commercial transactions and/or IP/IT background will be highly regarded. Excellent English and Chinese language skills are preferred. Fantastic career prospects and regular working hours.

Deputy General Counsel — Leading Bank, Hong Kong Unique opportunity to join this leading bank. You will focus primarily on corporate and retail banking products such as loans, treasury, trade finance, investment, equity and credit derivatives and bonds. Candidates with at least 8 years’ PQE and solid experience in banking and/or finance areas will be highly regarded. Excellent English and Chinese language skills are essential. Extremely competitive remuneration and fantastic career progression on offer.

Senior Legal Counsel — Investment Bank, Hong Kong This investment bank is looking for a senior corporate finance lawyer to take the lead in its high-profile corporate transactions. You should have at least 5 years’ PQE and extensive experience in capital markets, securities, M&A and listings work involving multi-jurisdictional parties. Its legal team consists of high quality people and a superb spirit with a real focus on teamwork. Friendly working environment and top pay on offer. 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.

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 years’ PQE and solid experience in corporate M&A, listings rules compliance and/or litigation are invited to apply. Alternatively, those with at least 5 years’ PQE will be considered for the Senior Legal Counsel post. Excellent English and Chinese language skills are essential. Excellent opportunity with good work/life balance.

Funds/Wealth Management Lawyer — Global Financial Institution, Hong Kong Our client is a market-leading global financial institution. Its wealth management division is seeking to recruit a mid to senior-level funds lawyer to drive its continuing expansion in Asia. Candidates with solid experience in a reputable law firm or financial institution in structuring, distribution, management and investment of retail and institutional funds will be in high demand. Those with strong exposure to investment-linked products from insurance companies and extensive banking and finance experience will be equally considered. Terrific remuneration for the right candidate.

Legal Counsel — Regional Bank, Hong Kong This well-established regional bank is seeking 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 language skills are crucial. Exciting prospects for the right candidate.

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.

Private Practice Employment Partner (8+ years’ PQE) 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.

Commercial Lawyer (3+ years’ PQE) Exciting opportunity for a mid-level lawyer to join this prominent global law firm. You should have solid knowledge of commercial contracts and IP law. Previous exposure to IT and/or licensing agreements will definitely be an asset. Excellent English and Chinese language skills are essential. Diverse range of work and international clientele.

Insurance Litigation Lawyer (2-6 years’ PQE) Our client is a well-established 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. Those with solid general litigation experience will also be considered. Excellent English and Chinese language skills are preferred as well as proficiency in Cantonese.

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 the 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.

Commercial Litigation Lawyer (2+ years’ PQE) Our client is a leading international firm with a market-leading litigation practice. You will be involved in high-profile commercial litigation, alternative dispute resolution, regulatory disputes and investigations, often of an international nature. Candidates with minimum 2 years’ PQE and extensive general litigation experience are sought. Fluency in English, Cantonese and Mandarin is a given. Competitive remuneration and a promising future awaits the right candidate.

Corporate Finance Lawyer (4-7 years’ PQE) Join this well-known global law firm as it seeks to add a corporate finance lawyer to its expanding team. You should have at least 4 years’ PQE and strong knowledge of listings work involving multi-jurisdictional parties. Fluency in English, Cantonese and Mandarin is a given. Competitive salary and exciting career prospects.

Please call +852 2531 2200 or email finance.hk@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


SINGAPORE – QFLP RELATED OPPORTUNITIES

3 YRS+ PQE

CORPORATE

BANKING & FINANCE

Recipients of the QFLP licences are actively working to ensure that they are able to offer their clients 360 degree legal service. With this in mind, they wish to supplement their teams by bringing onboard Singapore qualified corporate lawyers who have first class academics and strong experience, particularly in the area of M&A. Candidates must come from other international firms or top-tier local practices and, of particular interest, are dual qualified candidates. Our clients also wish to speak with locally based partner-level candidates who have sustainable books of business and/or teams. This is an exciting opportunity to caplitalise on the liberalization of the Singapore legal system. (QFLP0238)

While the jury is out when it comes to the long term practical effects of the QFLP scheme – the fact remains that, even in this very difficult market, good opportunities do exist for some of Singapore’s top lawyers, many which of have arisen because the international recipients of these licences now need to be capable of servicing both the international and local components of their client’s legal needs. One area in which this capability is key, is banking & finance. Locally qualified lawyers who have forged connections with financial institutions regionally are in demand. Suitable candidates will need to be capable technical lawyers with ambitions to broaden their current practice. (QFLP0301)

ARBITRATION

CAPITAL MARKETS / FUNDS

As Singapore cements its place as a leading centre for legal services, arbitration is a key practice area. Although the QFLP excluded dispute resolution from its scope, the fact remains that several of the firms which were awarded QFLP licences, are now seeking to either establish a dispute resolution team or grow their existing teams. Their aim in doing so, is to ensure that they are able to fully service their clients’ needs across every area of legal practice. Suitable candidates for these opportunities will have strong Asia-based arbitration experience and very good reputations for undertaking top calibre arbitration work across jurisdictions. (QFLP0245)

These are two practice areas where we have recently seen an increase in demand within Singapore based interntional firms. As with all disciplines, the candidates required to fill these roles, must have not less than 3 year’s working experience and their technical capability must be outstanding. In these practice categories, while our clients are very interested in speaking with suitably qualified lawyers who are already in Singapore, they are also particularly open to speaking with Singapore qualified lawyers who are based offshore and who have gained further experience while working in another major financial centre. (QFLP0298)

Law Alliance consultants have met with a majority of the international law firms which pursued and received a QFLP Licence, as well as teams and individuals keen to review their options. Please contact us if you would like to speak to us about these or other QFLP created opportunities.

SINGAPORE OFFICE

HONG KONG OFFICE

Please contact Jeremy Small at (65) 6829 7155 or email

Please contact James Garzon at (852) 2521 0306 or email

sing@law-alliance.com

hk@law-alliance.com


IN-HOUSE

COMPLIANCE / CORP SEC

HEAD, LEGAL – GLC – SINGAPORE

HEAD OF OPS RISK – BROKERAGE HOUSE – SINGAPORE

If you possess strong corporate experience, and would like a fulfilling role in public service, then apply to head this legal department. You will play a vital role in an organization which safeguards fairness, meritocracy and integrity. (ISS1126) 8 YRS+ PQE

Leading broker seeks Head of Ops Risk for its APAC operations. Exceptional opportunity for a senior candidate to lead, implement and maintain a strategic global ORM framework. You will be part of a strong global brokerage network. (ISS1124) 10 YRS+ PQE

AGC – FINANCIAL SERVICES – SINGAPORE

HEAD / VP, COMPLIANCE – MERCHANT BANK – SINGAPORE

Insurance giant seeks an AGC for their Singapore office. You will provide support and advice on insurance, IP, corporate and finance issues. Ideally, you will possess at least 5 years of financial services or insurance experience. (ISS1109) 5 YRS+ PQE

Step up to this senior role with the IB arm of a global financial powerhouse. You will be responsible for all compliance issues, including regulatory and head office procedures. Candidates must be familiar with the SFA, FAA and the Banking Act. (ISS1128) 5 YRS+ PQE

LEGAL COUNSEL – IT – SINGAPORE

CORP SEC – PLC – SINGAPORE

Our client is a government linked organization that helps develop IT initiatives throughout Singapore. The ideal candidate should be admitted to the Singapore Bar with at least 4 years PQE. Familiarity with IP Law would be an added advantage. (ISS1127) 4-8 YRS PQE

A public listed property giant seeks a Corporate Secretarial Officer to join heir team. It is essential that candidates are armed with an ICSA qualification and have prior experience gained while working with publicly listed company. (ISS1118) 4 YRS+ PQE

LEGAL COUNSEL – MEDIA – SINGAPORE

CORP SEC MANAGER – SERVICE FIRM – SINGAPORE

A leading regional media business with a complete range of media related services, is looking to strengthen their legal team by recruiting a Legal Counsel. The role will focus on IP legal work within a general corporate remit. (ISS1093) 3-6 YRS PQE

A top service firm seeks a Senior Manager to join their team. It is essential that the ideal candidate is armed with an ICSA qualification and has experience with public listed clients. Prior experience in managing a team would be an advantage. (ISS1122) 6-10 YRS PQE

LEGAL DIRECTOR – E-COMMERCE – BANGKOK

CORP SEC – WEALTH MANAGEMENT – SINGAPORE

This global media giant has significant expansion plans for the Asia-Pacific region. As part of this growth they are seeking to appoint a Legal Director. You will oversee the region and liaise with the US based Legal Team. (ISS1129) 7-10 YRS PQE

Take charge of corporate secretarial matters within this premier organization. To take on this exciting and very well remunerated position, the successful candidate must have solid listed company secretary experience. (ISS1108) 8 YRS+ PQE

TELCOS – GENERAL COUNSEL – NORTH AFRICA

COMPLIANCE/REGULATORY – DUBAI

Market leader is currently looking to appoint a General Counsel. You will be responsible for a team of six lawyers. You will be fluent in French, Arabic and English. Telecommunications experience is not a pre-requisite. (ISS1117) 8-12 YRS PQE

Award winning firm has immediate vacancies for compliance lawyers with AML or FCPA experience. A superb opportunity for skilled regulatory lawyers to enter a top law firm that is thriving in the Middle East. Arabic language skills not required. (MEIS023) 3-6 YRS PQE

www.law-alliance.com

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


Legal Opportunities – Singapore Talent2 International Limited, an Australian-Listed entity, is Asia-Pacific's first end-to-end Human Resources Outsourcing (HRO) solutions business and one of the leading recruiters of choice for a growing number of businesses across the region. Led by the hugely successful and visionary Geoff Morgan and Andrew Banks (formerly of Morgan & Banks), Talent2 combines a contemporary and ethical approach to recruitment with a lineage stretching back more than 20 years.

Singapore – Legal SVP, Legal and Compliance

> 10 PQE

> Our client, an established Asian commodities, futures and securities firm is seeking to expand their operations regionally and are seeking a head of their regional legal and compliance team based in Singapore. > Candidates with relevant experience in establishing ‘greenfield’ compliance functions together with experience in securities are encouraged to apply. Ref: ALB 22525/PJ

Employment Lawyer, Financial Services

> 3 PQE

> Our client, an international financial services firm, is seeking an experienced employment lawyer to join their regional employment practice group. > Ideally, you would have substantial regional experience with employment laws, guidelines and best-practices. The focus for this role would be slanted towards strategic advisory support rather than contracts and agreements. > You will have very strong communication skills conjoined with a consensus-building approach to negotiations Candidates with experience in employee relations dispute resolutions are encouraged to apply. Ref: ALB 22799/PJ

Senior Legal Counsel, Singapore (Shipping) > 10 PQE > Our client, a large international MNC supply-chain giant is presently seeking a senior lawyer to join their regional legal team based in Singapore. > Ideally, you would have substantial M&A expertise and have relevant shipping and logistics corporate experience. > You will also be responsible for all general corporate and commercial matters for the growing business in the region. You will ideally have a good mix of corporate, insurance and shipping experience within either a leading law-firm or within a major shipping interest. Ref: ALB 22365/PJ

Senior Legal Counsel (Asset Management) > 10 PQE > Our client, a world-leading investment bank, is presently seeking an experience counsel to lead the legal function for their asset management arm regionally. > This is a challenging role where you will work autonomously with regards to the provision of legal advice and guidance to a funds management and investment advisory business.

Legal Counsel (Private Banking/Derivatives) > 3 PQE

> For this role, it would be advantageous if you had up-to-date knowledge of laws and regulations pertaining to the funds management industry in South Asia and strong team-building skills and experience in working in a similar function in-house.. Ref: ALB 20005/PJ

> Our client, a renowned private and investment bank is currently seeking a qualified lawyer to join their regional legal function supporting the private bank.

Senior Legal Counsel, US IT MNC

> The coverage of the role will include structured products, funds and f/x. In this role you’ll be responsible for drafting and reviewing legal forms and agreements, dealing with complex cross-border legal questions on the execution and settlement of structured products and investment funds. > You will ideally have private banking expertise, but barring that, candidates with knowledge of derivatives (OTC or otherwise), exotic Options and Forward Strategies are encouraged to apply. Ref: ALB 20009/PJ

Senior Legal Counsel (Insurance)

> 5 PQE

> Our client, a global international insurance giant, is presently seeking to build up their regional (APAC) legal function.

> 5 PQE

> Our client, an international business consulting MNC, is presently seeking a senior technology lawyer to join their regional in-house function based in Singapore. > This role would revolve around the review, drafting and negotiating medium to complex client transactions. You’ll be tasked with identifying and advising senior management on legal and commercial risks associated with such transactions, assessing their potential impact and to provide proactive and creative solutions. > Transaction experience within an IT environment is essential for this role. Ideally, you would hail from an IT services vendor environment and understand the industry from a holistic view. Ref: ALB20011/PJ

> You will ideally have a mix of insurance litigation and corporate/ commercial experience within an in-house function. You would also leverage experience dealing with regional financial regulatory issues as there is also significant funds (both mutual and alternative) exposure.

Corporate Attorney, Technology & Internet > 5 PQE

> You will have key business responsibilities for managing the product development teams from a legal and regulatory perspective in regional markets. Ref: ALB 20007/PJ

> Ideally, you would be well-versed with technology and financial services with a critical eye towards risk and regulatory issues. You would have a broad range of experience ideally with financial services and/or technology background

Legal Counsel (Capital Markets)

> 2 PQE

> Our client, a large regional bank, is looking for an experienced capital markets lawyer to join their growing dedicated business group. > This opportunity is a terrific entry-point into Investment Banking within a financial institution and the internal culture supports an > independent and critical thinker.You will ideally have a background in capital markets (ECM/DCM/PE/M&A) between 2-4 years in experience as well as a commercially-savvy approach to the practice of law. Ref: ALB 20010/PJ

> This globally recognised ‘brand-name’ needs a commercial, creative, detailoriented attorney to join their regional operations in Singapore.

> You will be working closely with the risk, product, marketing, compliance and business development teams regionally and report to a regional legal director. Ref: ALB 20014/PJ

hmaBlaze117205

For a confidential discussion of any of these roles or if you’re considering a move, please contact

Prem John at Talent2 on (65) – 6511 8555 or e-mail him at prem.john@talent2.com Please visit: www.talent2.com


Asian Legal Business (Singapore) Jan 2009  

The magazine for lawyers and in-house counsel with jobs, firm ratings, legal analysis and all the latest legal news and views

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