CLB Aug 2012

Fosun Q&A: Goalkeepers against risk

复星问答

：风险把关人

august2012 WWW.LEGALBUSINESSONLINE.COM

亚洲法律杂志 - 中国版 CHINA

Rising tide

Antitrust litigations increasing

风 起 潮 涌 反垄断诉讼增长

HOT JUNK Optimism for SME private bond market 前景乐观：中小企业私募债 市观察

PAGE 18

MIDDLE EAST SPOTLIGHT Strong growth predicted in the coming year 中东焦点：来年强势增长 预期

PAGE 30

DOMESTIC FOCUS Jun He’s managing partner opens up 优势在中国：君合管理合伙 人专访

PAGE 42

INSIDE n Deals SPOTLIGHT

04

n THE BIG STORY

05

n LAW FIRM LEAGUE TABLES

12

n SUNDRIES

76

INTERNATIONAL BAR ASSOCIATION

ANNUAL CONFERENCE DUBLIN 30 SEPTEMBER – 5 OCTOBER 2012

S

teeped in history, yet buzzing with youthful energy, Dublin’s medieval, Georgian and modern architecture provide a backdrop to a bustling port where the cosmopolitan and charming meet in delightful diversity.

Serving as Ireland’s historical and cultural centre, as well as the nexus of Irish education, administration, economy and industry, Dublin is perfectly suited to host the IBA’s 2012 Annual Conference.

What Will Dublin 2012 offer?

• The largest gathering of the international legal community in the world – a meeting place of more than 4,000 international legal professionals • More than 180 working sessions covering all areas of practice relevant to international legal practitioners • The opportunity to generate new business with the leading firms in the world’s key cities • Registration fee which entitles you to attend as many working sessions throughout the week as you wish • Up to 25 hours of continuing legal education and continuing professional development • A variety of social functions providing ample opportunity to network and see the city’s key sights • Excursion and tours programme

OFFiCiAL COrpOrATE SUppOrTErS

To register, please contact: International Bar Association 4th Floor, 10 St Bride Street, London EC4A 4AD, United Kingdom Tel: +44 (0)20 7842 0090

Fax: +44 (0)20 7842 0091

www.ibanet.org/conferences/Dublin2012

CONTENTS

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30

1

NEWS Deals

04

Briefs

05

League Tables

12

Appointments

16

japan law awards

17

Index

75

Sponsored Updates — International Tax Azure Tax — Shanghai

Victory Legal Group — Singapore

Loo & Partners

COVER STORY The antitrust litigation tide

反垄断诉讼潮流

62

As companies increasingly go to battle on the anti-monopoly front in China, lawyers play a key role in the cavalry. With several high-profile cases grabbing headlines in recent months, including Qihoo 360 v Tencent, antitrust litigations are notably on the rise. Candice Mak reports 中国公司之间的反垄断纠纷正在增多，其中可以看到律师冲锋陷阵的身影。近期 奇虎360与腾讯等重大案件不断抢占媒体头条，反垄断诉讼业务成为显著的增长 点。Candice Mak报道

72 73 73

Sponsored Profiles — Yongheng Partners

13

— Zhonglun W&D Law Firm

15

— Guangdong Sun Law Firm

21

— Cadwalader, Wickersham & Taft LLP

29

— King & Wood Mallesons

69

SUNDRIES

76

FEATURES It’s not junk: SME private bonds hot on sale 并非垃圾债：中小企业私募债热销

18

中国颁布新的行政措施强化医药强制许可体系，此 举引发热议。但是律师们指出新的法规并无革命性 变化，更为明确的规定只是将令外国制药公司增加 多一层风险。Candice Mak报道

Since its launch in early June, the vigorous offerings and hot subscriptions of China’s SME private bond market reveal an optimistic future, with relatively lowerthan-expected yield and risk, finds Liu Zhen

Middle East country report 中东地区报道

欧美“垃圾债券”的区别。刘蓁报道

Despite sensational headlines regarding new administrative measures strengthening China’s compulsory licence framework, lawyers tell Candice Mak plainly that there is nothing revolutionary in the new law. The clearer provisions will

30

As the West suffers through an unprecedented period of economic instability and mounting financial scandals, it is increasingly evident that the opportunity for growth lies further east, finds Shaheen Pasha

从六月份中国开始中小企业私募债券试行以来，活 跃的发行和踊跃的认购展示了这一市场的乐观前 景。当前相对预期较低的利率与风险，也说明它与

Don’t believe the hype 冷眼旁观

ventures, Jun He Law Offices continues to adhere to its strategy of being an independent China-focused practitioner.

Managing partner Xiao Wei discusses his firm’s challenges with Liu Zhen

simply add another layer of risk to foreign pharmaceutical players.

22

India’s hour of doubt 印度之惑

当西方国家正经历前所未有的经济动荡和金 融丑闻，中东地区却不断证明自身的增长潜 力。Shaheen Pasha 报道

Domestic focus 优势在中国 Defiant against pressure from competitors’ speedy expansions and bold overseas

虽然身负同行快速规模扩张和国际化的压力，君合 律师事务所仍然坚持立足于中国优势独立发展的 策略。管理合伙人肖微律师与本刊探讨律所当下的 挑战。刘蓁报道

42

India’s lustre has noticeably faded in the last few months, with growth slowing, the deficit gap widening, and the rupee falling through the floor as a result of stalled reform, government paralysis, and a variety of other factors that have made investors circumspect. Ranajit Dam explores 印度的光环正在褪去。过去数月间，由于改革停滞， 经济增速放缓，赤字猛增，卢比暴跌，政府瘫痪，众 多因素令投资者顾虑重重。Ranajit Dam报道

56

ASIAN LEGAL BUSINESS august 2012

2 ON THE COVER

MANAGING DIRECTOR Andrew Goldner andrew.goldner@thomsonreuters.com NORTH ASIA REGIONAL EDITOR Candice Mak candice.mak@thomsonreuters.com SOUTHEAST ASIA REGIONAL EDITOR Ranajit Dam ranajit.dam@thomsonreuters.com MIDDLE EAST REGIONAL EDITOR Shaheen Pasha shaheen.pasha@thomsonreuters.com JOURNALISTS Seher Hussain seher.hussain@thomsonreuters.com Zhen Liu zhen.liu@thomsonreuters.com Kathryn Crossley kathryn.crossley@thomsonreuters.com Kanishk Verghese kanishk.verghese@thomsonreuters.com copy editor Vasundhara Chatterjee REUTERS/Enrique Castro-Mendivil

associate copy editor Sanchita Ghosh director OF SALES Andrew Smart andrew.smart@thomsonreuters.com

THOMSON REUTERS TRUST PRINCIPLES 01 That Thomson Reuters shall at no time pass into the hands of any one interest, group or faction; 02 That the integrity, independence and freedom from bias of Thomson Reuters shall at all times be fully preserved; 03 That Thomson Reuters shall supply unbiased and reliable news services to newspapers, news agencies, broadcasters and other media subscribers and to businesses governments, institutions, individuals and others with whom Thomson Reuters has or may have contracts; 04 That Thomson Reuters shall pay due regard to the many interests which it serves in addition to those of the media; and 05 That no effort shall be spared to expand, develop and adapt the news and other services and products so as to maintain its leading position in the international news and information business.

Please contact Andrew Goldner with any questions. andrew.goldner@thomsonreuters.com

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ASIAN LEGAL BUSINESS is available by subscription. Please call +852 3762 3269 (Hong Kong), +65 6775 5088 (Singapore) for details or visit www.legalbusinessonline.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor.

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EDITORIAL

WWW.LEGALBUSINESSONLINE.COM : @ALB_Magazine : Connect with Asian Legal Business

Learning from the leaders When we spoke to our readers in China, they told us they wanted to learn more about what leading in-house counsel and law firm managing partners had to share – from strategic visions to daily management and the implementation of legal functions. That is why we introduced our rotating series of general counsel and managing partner interviews several months ago. The response has been very positive (for example, one UK firm expressed that our interview with Shanghai Electric’s chief legal officer was compelling and very helpful for insights into China’s power sector SOEs), and we will continue to bring original and interesting interviews with China’s legal leaders.

In this issue, Jun He’s managing partner talks to reporter Liu Zhen about why his firm is eschewing rapid growth and how the firm’s leadership has a different focus from that of major competitors (see page 42). We also delve into the inner workings of the legal team at Fosun International, China’s largest privately-owned conglomerate (see page 7). Two months ago, we featured the landmark Qihoo v Tencent case and its implications on the growing practice of antitrust litigation. This month’s cover story explores how the legal market is adapting to this specialty field’s rise in prominence and how firms are positioning themselves to capture this work (see page 62). I sincerely hope youALB_186x119.5mm_bleed5mm.pdf enjoy this issue and are1 able to enjoy 2011-8-13 17:12:41the summer holidays.

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向行业领袖学习 我们从与中国读者的交流中得知，他们希望更多分享到主流大企业法 律顾问以及顶尖律所管理合伙人的经验——从战略眼光到日常管理， 以及对法律功能的执行等各个方面。这正是我们从前几个月起开始轮 流刊登企业法务和管理合伙人专访栏目的原因。这一尝试也已经收到 了非常积极的反响。例如一家英国律所表示，我们对上海电气总法律 顾问的访谈非常吸引人，有助于他们更深入了解中国国企的情况。 因此，我们将继续为您带来对中国法律界领袖人物的的第一手深入访 谈。 在本期刊物中，君合律师事务所的肖微主任对本刊剖析了君合之所以 不选择快速扩张规模的原因，以及君合区别于主要竞争对手的战略重 点（见第42页）。我们同时深入探访了中国最大的民营财团之一复星 国际的法律团队（见第7页）。两个月前，我们曾介绍了互联网两巨 头奇虎360与腾讯的官司及其对中国反垄断诉讼的影响。本月的封面 故事则进一步讨论法律市场将如何适应这一新兴专业领域的崛起，以 及律所将如何定位以赢得竞争先机（见第62页）。我衷心希望您能够 喜欢本期刊物，并在本刊的陪伴下享受一个愉快的夏日。

CANDICE MAK North Asia Regional Editor, Asian Legal Business Thomson Reuters

DEALS

4

ASIAN LEGAL BUSINESS august 2012 n your month at a glance Firm

Value ($ mln)

Jurisdiction

Deal name

Deal type

Hong Kong/ China

AVIC International’s RMB Bond offering

235 (RMB 1.5 billion)

Debt

Hong Kong/ Singapore

Cheung Kong’s HKD corporate perpetual bond

129 (HK$1 billion)

Debt

Simmons & Simmons

Hong Kong

China Asset Management’s RQFII A-Share ETF

N/A

Equity

Baker & McKenzie

China/ Singapore

China Fishery Group’s bond issuance

300

Debt

China / France

CITICS’s purchase of CLSA from Crédit Agricole CIB

1,252

M&A

China/ Canada

CNOOC’s proposed acquisition of Nexen

15,100

M&A

Mongolia

GE’s Mongolia wind farm project

Hong Kong

Stanley Black & Decker’s acquisition of Infastech from Asia Trading Holdings

Deacons

Hong Kong

Wharf and Wheelock’s subscription of Greentown China shares and other securities

Skadden, Arps, Slate Meagher & Flom

Hong Kong/ Macau

Wynn Resorts financing

Hong Kong/ China

Yitai Coal’s Hong Kong IPO

Hong Kong/ China

Yongda Automobiles’ Hong Kong IPO

Linklaters

$1.25 billion M&A CITICS’ purchase of CLSA from Crédit Agricole CIB • The first phase involved the sale by Crédit Agricole CIB of 19.9 percent of CLSA’s capital to CITICS International for $ 310.3 million.

• For the second phase, CITICS International granted Crédit Agricole CIB a put option to sell the remaining 80.1 percent interest in CLSA to CITICS International for $941,680, subject to regulatory and shareholder approvals.

• The parties underwent more than two years of negotiations before reaching the agreement.

Beijing Sunlight Conyers Dill & Pearman Jingtian & Gongcheng Davis Polk & Wardwell Baker & McKenzie Clifford Chance

Kirkland & Ellis Gide Loyrette Nouel Davis Polk & Wardwell

$15.1 billion M&A CNOOC bid for Canadian oil producer Nexen • China’s largest foreign takeover bid and CNOOC’s most notable move in North America since its failed bid for Unocal in 2005.

• CNOOC is offering $27.5 cash per share for Nexen, a 61 percent premium. However, it said Nexen’s $4.3 billion debt would remain outstanding.

• Deal is subject to the Canadian government’s approval.

Paul, Weiss Herbert Smith Hogan Lovells Skadden, Arps, Slate Meagher & Flom Clifford Chance

Freshfields Bruckhaus Deringer Clifford Chance

122

850

Projects

M&A

654 M&A (HK$ 2.55 billion) 2,300

Finance

861 (HK$6.679 Equity billion)

Jingtian & Gongcheng Davis Polk & Wardwell Paul Hastings Walkers Grandall

215 (HK$1.67 Equity billion)

08.2012

BRIEFS

05

REUTERS/Siu Chiu

the big story

FORUM

ZTE probe an alert to the Chinese

By Liu Zhen

A

criminal investigation by the FBI has cost ZTE Corp (ZTE) its steepest share price tumble in years and has left it open to more risk of a severe penalty. The world's fifth-largest telecommunications equipment maker was alleged to be selling banned computer products to Iran.

The Shenzhen-based company was reported to have had a $120 million contract in 2010 with Iran's largest telecom firm, Telecommunication Co of Iran (TCI), offering hardware and software products from some American computer companies including Microsoft, Hewlett-Packard and Oracle.

Another report said in 2011 that ZTE also had an agreement with a unit of the consortium that controls TCI to sell millions of dollars worth of additional embargoed U.S. computer equipment. As a result, the second-largest telecoms equipment producer of China is also under investigation by the U.S. House of Representatives’ Intelligence Committee over whether its equipment represents a threat to U.S. national security.

“Despite the political elements in the case, it indeed alerts the Chinese companies to keep high vigilance when doing business overseas,” says partner Zhang Mingjie of Zhong Lun Law Firm.

Chinese companies should carefully research the relevant international laws and market rules, and analyse potential political risk, particularly at a time when an increasing number of Chinese firms are seeking opportunities overseas, lawyers suggest.

“As Chinese companies are going out, cross border risk rises. Such problems should not be overlooked,” says Xie Xianghui, a partner of Grandall Law Firm.

Penalty and relief The U.S. law authorising U.S. sanctions against Iran allows for a civil penalty up to twice the value of a transaction, which in ZTE's case would translate to $240 million or more. Individuals, such as company employees, convicted under the law can be sentenced to 20 years in prison, and companies in the most extreme cases can be cut off entirely from commerce with the United States, Reuters cited legal experts as saying.

The U.S. Commerce Department is also probing the case, and the Chinese Ministry of Commerce said it hoped ZTE would receive fair and proper treatment from the U.S. “If a Chinese company in such a situation finds itself being treated unfairly, it could launch a lawsuit or appeal to the U.S. court,” says Xie. However, when there is political involvement, legal relief such as filing for arbitration or an appeal to the court becomes complicated and difficult.

“Sometimes there is inescapable political intervention in the globalisation era,” says Zhang.

“Hence to become real multinationals, the Chinese companies have to really have a global vision to take all of these into account in advance.”

What should Chinese companies do to avoid risks while growing their overseas business?

“An all-round risk evaluation is indispensible, which should not only include the legal risks, but also the political risks. It is a problem that few companies have been fully aware of.”

Zhang Mingjie Zhong Lun Law Firm

“I would suggest our clients hire foreign lawyers to get more specific advice regarding each particular case according to the law of the relevant jurisdiction(s), as neither Chinese companies nor Chinese law firms are as familiar.”

Xie Xianghui

Grandall Law Firm

06

BRIEFS

08.2012

业界讨论 中国公司应怎样避免海外业务中 的风险？

“全面的风险评估是必不可少的。 不光是国内法，还有国际法和相 关条约，不光是法律相关风险， 更应该包括政治相关问题。这是 现在很多企业有局限性的地方。” REUTERS/Siu Chiu

本月要闻

张明杰 中伦律师事务所

中兴案警示中国企业 刘蓁

在

遭到美国联邦调查局展开犯 罪调查消息传出之后，中兴 （ZTE）通讯的遭遇了近年 来最严重的股价暴跌，并且 还可能面临严厉处罚。这家世界第五大通讯设 备制造商被控向伊朗出售了禁运产品。 据报道，总部在深圳的中兴2010年同伊朗 最大的电信公司伊朗电信（TCI）签订了一份 总值1.2亿美元合同，其中包含了向后者提供部 分包括微软，惠普，甲骨文等美国计算机公司 的软硬件产品的内容。 另有报道称，2011年，中兴还与TCI的控股 财团达成协议，继续出售被禁运的价值数百万 美元的美国电脑设备。因此，美国众议院情报 委员会同时也在对这家中国第二大电信设备厂 商进行调查，评估这些设备是否对美国国家安 全构成威胁。 “虽然本案涉及的政治问题比较复杂，但中 国企业的确需要在海外投资中提高风险意识，” 中伦律师事务所合伙人张明杰律师说。 律师们建议，在当今越来越积极的寻求海外 发展机会的同时，中国公司也应当认真研究相 关的国际法和市场规则，并且分析可能的政治 风险。 “随着中国企业走出去，跨国政治风险也上

升了。对这些问题应该更多关注。”国浩律师事 务所的谢湘辉律师说。 处罚与救济

据路透社援引有关法律专家的说法，授权美 国对伊朗实施制裁的相关美国法律条款规定， 允许对违背禁令的交易最多处以交易额两倍的 民事罚款，在ZTE的本案中，这一数字可能达 到2.4亿美元以上。而被认定有责任的公司雇员 等个人，则可能被判处20年徒刑。在最极端的 情形下，违规的公司可能被完全禁止从事与美 国相关的商业活动。 美国商务部也参与了本案的调查。而中国商 务部发言人表示，希望中兴公司能够得到美方 公平合理的对待。 “如果一家中国公司认为受到了不公正的对 待，他可以向美国的法院提起申诉或起诉。”谢 律师说。 但是，当案件涉及政治因素的时候，类似仲 裁或上诉等法律救济手段可能变得十分困难和 复杂。 “全球化的时代，有时候政治因素的干扰是 避不开的。”张律师说“所以要真正走向国际， 中国公司需要有更开阔的视野，把各国不一样 的情况都考虑在内。”

“我会建议客户在当地聘请律师， 根据当地法律提供对具体案子有 针对性的意见，因为国内的企业 和律师可能都不掌握情况。”

谢湘辉 国浩律师事务所

BRIEFS

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GC INTERVIEW

7

Fosun delivers

Tang Jianlong General Counsel Fosun Group

唐建龙

总法律顾问 复星集团

Tang Jianlong is the general counsel of the Fosun Group. He graduated from Fudan University’s School of Law, and during his 25-year long professional career, Tang has worked as a judge, a private practice lawyer, and an arbitrator. He speaks to Liu Zhen about his current role and the challenges and thrills of managing the Fosun legal team.

ALB: Please introduce your legal team and describe its characteristics, strategy, and goals.

TJ: The legal team of Fosun has three levels: The legal departments of the group headquartersin Shanghai, the industrial groups and the invested companies. On the first and second level there are about 80 people, of which 17 are working in the group’s headquarter as associates in the domestic and international investment departments. Seventy percent of

these 17 people are below 35 years of age, and half of them have masters degrees. We can say that the legal team at Fosun is a young team of excellent educational backgrounds.

The company culture of Fosun believes in "assembling the power of growth". In Fosun's 2010 global strategy, the core idea was "Chinese experts and global capabilities".

Since 2010, Fosun has recruited five counsels from overseas, who brought in dynamic as well as professional

support to the foreign-related business of the company.

Bearing in mind the group’s prospect of "being the world's first class investment group", the legal department targets corporate governance, and contributes to the fulfillment of strategic goals and annual plans. A signature of the Fosun legal support system has been built with unique concepts and methods of risk control.

复星闪耀 唐建龙先生毕业于复旦大学法律系，从事法律工作25年，历任法官、律师、仲裁员 的角色，现为上海复星高科技（集团）有限公司等提供专业法律服务工作，擅长企 业并购、私募股权投资及企业内部风险控制等法律事务。 ALB: 复星法务部门的人员构成，团队 风格？发展速度与策略、目标？ TJ: 复星集团法务部架构呈现为三级层 次：集团总部法务部-产业集团法务部产业集团投资企业法务。集团总部及产 业集团法务人员共约80人，其中集团总 部法务人员共有17人，根据国内业务和 国外业务全面对接各投资部门。在这17 人当中，35岁以下的占70%，硕士学历

以上的占1/2。可以说，复星集团法务 团队是一支高学历的年轻团队。 复星的文化一直秉承“汇聚成长力 量”。2010年，复星集团正式提出全球 化战略，其核心为“中国专家，全球能 力”。围绕这一理念，复星集团法务部 也积极引进海外人才，努力实现人才全 球化。从2010年至今，复星集团法务部 引进海外法务人员5名，这些年轻的“

海归”为法务部带来了活力，为集团的 涉外业务提供了专业支持。 法务部紧紧围绕集团愿景——为“ 专注中国成长动力的世界一流投资集 团”提供专业的法律服务。法务部的 目标致力于公司内部控制，通过专业的 法律服务，助力公司实现战略目标和年 度工作经营计划。围绕这一目标，法务 部建立了独特的风险控制理念以及风险

8

BRIEFS

ASIAN LEGAL BUSINESS august 2012

ALB: What is so unique about

Fosun’s legal department?

TJ: In contrast to our counterparts in other companies, we, the legal team of Fosun, have our unique characteristics and advantages.

The first one is that the group executives attach high importance to risk control, and the one who oversees legal affairs is able to take part in the highest decision making of the group.

The second is Fosun’s high awareness of risk and a culture of compliance. In addition, the inhouse counsel plays the main role along with the support of external agencies. Prevention has the priority in risk control, and the legal team has full involvement throughout the procedure. Last but not least, we keep a firm grip on stamp management and authorisation management. In short, four words can summarise our characteristics: complete surveillance, embedded, institutional, and personalised.

1) Complete surveillance The service to the investment department takes centre stage for our legal work. By doing diligent investigations and contract examinations, we closely control the risks during the entire investment procedure.

控制方法，形成了有复星特色的法务支 持体系。 ALB: 相比一般其他企业的法务工作， 复星法务部门的独到特色？ TJ: 法务部的定位在于既要为企业的运 营与发展提供专业的服务，又要成为企 业的战略伙伴；法务部门的职责在于既 是企业的风险控制工具，又是企业的战 略伙伴。无论是定位还是职责，最终都 要落实在协助企业实现战略目标上。 与其他企业相比，复星法务部门独 具特色。首先，领导对风险控制非常重 视，分管法务的领导能够直接参与集团 最高层决策；其次，复星非常重视树立 风险意识、培育合规文化；再次，复星 的法务工作以内部法务为主，外部中介 为辅，在风控理念上以预防为主，注重 全流程参与、控制风险；最后，复星的 法务工作以印章管理和授权管理作为核 心抓手。概括而言，复星法务部的特点 可以总结为12个字——全流程、嵌入 式、制度化、落实人。 1）全流程 复星法务工作全面围绕整个投资活

2) Embedded More precisely speaking, we insert the legal role into daily business, and embed the legal counsels into the business departments. All Fosun businesses are implanted with legal support.

3) Institutional The legal department has drafted a series of regulations to give risk control solid guidance throughout all the operation and management of the company, such as regulation on stamp management, regulation on contract management and regulation on stock rights management.

4) Personalised Precisely speaking, we assign legal personnel to look after investment projects and department business.

They provide tailored support to their specific departments.

ALB: What was the most important

legal issue that your team has recently dealt with?

TJ: In terms of internal control, the legal department stressed on the improvement of two core issues: stamp management and authorisation.

We have organised and categorised all existing stamps of the group, and identified the problematic ones

动来进行。通过尽职调查、合同审核等 环节，全流程控制投资风险。 2）嵌入式 具体而言就是将法务工作嵌入到业 务工作中，将法务人员嵌入到业务部 门中。 复星集团的所有业务中都嵌入了法 务支持。 3）制度化 为了使风险控制贯穿到企业的业务 及管理活动中，法务部制定了一系列制 度，使风险控制有据可依。例如《印章 管理规定》，《合同管理规定》、《股 权管理规定》等。 4）落实人 具体而言，就是指在投资活动和业 务部门中配备法务人员。这些法务人员 专门为特定的业务部门提供法律支持。 ALB: 近一两年来，公司遇到的最主要/ 重大的法律相关事务是什么？法务部是 怎样解决的？ TJ: 一、在内部控制方面 1、法务部着重抓住印章与授权两个 核心抓手，完善内部控制。对于印章的

according to internal auditing, and also provided propositions to improve the management after research and deliberation with other departments. We also sorted through all the authorisation documents.

Combining the results from interviews with operational and functional departments, and the actual facts of the business of the group, we finally worked out, suggested, and integrated authorisation standards.

The legal department also carried out a series of internal audits and examinations. In 2009, we drafted the Manual of Company Legal Risk Control (“the Manual”), based on the Standards of Company Internal Control, and issued the amendments to all industrial companies. The Manual listed various aspects of company risk control including internal environmental control, risk evaluation management, and company controlling, etc. According to the Manual, the legal department implements four to five audits every year to help the industrial companies discover their risk points, and improve their corporate governance structure. We also pay attention to the prevention and prohibition of tunneling between the investment teams and their targets. We occasionally interview the companies

保存、管理和使用方面，法务部对目前 复星集团已有的印章进行梳理与整合， 并依据集团审计部门对于印章的内部审 计结果，重点追查存在问题的印章，经 过调研后会同公司档案部门共同提出整 改意见。对于授权方面，法务部梳理了 各产业的授权表，并与业务部门以及职 能部门有关人员进行访谈，最终结合复 星实际业务情况，统一了复星集团建议 适用的授权标准。 2、法务部进行了一系列稽核与内审 的活动。2009年，根据《企业内部控制 基本规范》，复星集团法务部制定了《 企业法律风险控制手册》（以下简称“ 风控手册”），并经2011年修订后下发 复星集团各产业。风控手册罗列了企业 风险的多个方面，包括企业内部环境控 制、风险评估管理、企业控制活动等。 根据风控手册，集团法务部每年组织4 到5次对下属产业的法务稽核，帮助各 产业查找公司治理的风险点，完善法人 治理结构。除了法务稽核以外，法务部 还注重预防和禁止投资团队与投资单位 进行利益输送，制作《访查函》并不定 期对已投资企业进行访谈。

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above. By structure, this means delegating the executive director system, communications with the investment department, connections to the invested companies, and legal audits to discover the risky points and raise the level of management. We will try our best to make the corporate governance structure standardised, transparent, and clearly authorised.

following works in the next year or two:

and tax. Since 2009, we have been organising eight to ten training sessions every year, and hosting forums. Through the learning opportunities, the counsels are able to improve their skills and exchange experiences.

In the meantime, the legal department should also provide valueadded services to our investment projects, and their post investment management. We also should supervise the companies Fosun has invested in on their major spending projects, legal affairs, and even their IPOs with help from securities traders and lawyers.

Besides professional skills, improving service standards also means we should increase the communication among the executives, relevant business departments, and industries. We should be more sensible and proactive in solving the problems. Better communication is an indispensible part of better legal services.

1) To constantly improve the standards of the professional services The in-house legal service is a highly professional job that requires not only knowledge of the law, but also relevant knowledge like accounting

2) Further improvement of the corporate governance structure Over the next while, the legal department will do its best to improve the corporate governance structure apart from the completion of the authorisation system mentioned

3) Strengthening the construction of the legal system The building up of the legal team is an important function of the group headquarters’ construction. The legal teams at all levels together form an organic system.

In order to improve the legal system across the group, the legal department led a restructuring of the organisation of industrial groups, and helped them recruit qualified legal people. The management over the team has been strengthened by delegation, incentive offering, and assessment. A “successor” programme was developed to ensure team continuity, and we also invented a chart to evaluate the capability and potential.

In the first half of this year, the legal department of the group has been benchmarked with the legal teams of GE Shanghai and the Jardine

二，在投资方面 1、法务部着力完善人员架构，根据 境内外业务，按照不同产业全面对接公 司业务部门，为所有业务部门配备专 业、适格的法务人员，使所有业务部门 的所有投资活动，都能找到对口的法务 人员进行跟进。 2、为了简化审阅流程，减化投资部 门与法务人员的沟通程序，法务部制定 了一系列指引性文件及文本模板。目 前，法务部已经制作了包括《境外并购 指南》、《印尼矿法指南》、《人民 币基金设立指引》等指引性文件，以 及PE投资协议文本模板、保密协议文本 模板等。

8-10次业务培训，并开展不定期的业务 讨论。通过业务学习，法务人员提高 了自己的专业水平，交换了彼此的业 务经验。 在提供专业服务的同时，法务部还 为投资项目提供增值服务，有效进行投 后管理工作，指导已投资企业的重大投 资项目和其他法律事务，与券商及律所 一起协助被投资企业实现上市等。 除了提供专业服务外，提高法律服 务水平还体现在增强和领导、相关部 门、各产业间的沟通协调能力，增强职 业敏感性，提高解决问题的能力。加强 沟通对于更好地提供法律服务起到至关 重要的作用。 2）进一步完善公司治理结构 除了之前提到的对授权体系的完善 以外，未来一段时间，法务部将致力于 完善公司治理结构。包括加强董监事委 派制度的执行，加强与投资部门的交流 和沟通，加强与被投资企业的条线衔 接，通过法务稽核帮助各产业查找公司 治理的风险点，提升公司管理水平等。 力图实现公司治理的规范、透明和授 权明确。

3）加强法务体系的建设 法务体系的建设是复星集团总部职 能体系建设中重要的一部分，集团各层 级的法务团队构成法务体系一个有机 的整体。 为完善复星集团法务体系，集团法 务部牵头各产业法务部门梳理本产业法 务部的人员架构，并协助各产业招聘适 格的法务人员；依靠委派、激励和考 核，加强对产业法务人员的管理；在梯 队建设方面，实行继任者计划，并与人 力资源部共同协商制定法务人员能力与 潜力的九宫格。 今年上半年，复星集团法务部已经 与GE上海总部及香港怡和集团的法务部 进行了对标，向他们学习法务体系架构 以及法务人员与业务人员配比等体系建 设有关问题。下半年，我们还将选择其 他全球领先的企业进行对标。从长远角 度来看，对标活动将会是我们一直贯彻 下去的学习方式。 除此之外，加强法务体系建设还需 要建设高绩效的法务团队。具体而言， 就是要培养团队共享愿景的能力，将个 人目标与团队目标结合起来，通过“照

we’d already invested in with the investigation letter we drafted.

In terms of investment, the legal department works on the structure of personnel. We connect with business sections industry-by-industry allocating professional legal advisers suitable for each industrial division.

This effort ensures that all investment cases are followed up by suitable legal experts.

In order to simplify the approvals procedure and the communication between the investment department and the legal department, we have also issued a series of manuals including the Guidelines on Overseas M&A; the Guidelines on Indonesian Mineral Law, Instructions of Setup of RMB Fund, and document templates of PE investment and confidentiality agreements.

ALB: What are your team’s plans in

the next few years?

TJ: We will be focusing on the

ALB: 预计未来一两年的法律部门工作 重点是什么？ TJ: 未来一两年内，法务部门的工作重 点主要有以下几点： 1）不断提高法律服务专业水平 法务工作是一项专业性很强的工 作，不但要掌握法律专业知识，还需要 熟悉与业务相关的财务、税务知识。从 2009年起，复星集团法务部每年组织

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ASIAN LEGAL BUSINESS august 2012

Group in Hong Kong to learn from their system constructions, such as organisational structure and legal-tobusiness personnel ratio. In the second half of this year, we will continue this with the other leading companies of the world In the long run, such benchmarking learning is what we will carry through all the way.

In addition, a highly efficient team is what a good legal team system needs. More specifically speaking, the shared vision and common goals among individuals and the team are necessary. By “self review”, “gap analysis” and “reality reflection”, we will maintain our creativity and increase the communication and problem-solving abilities.

4) Deepen compliance and risk control construction The Fosun Group has always valued compliance and risk control very much.

The goal of Fosun is “to manage trillions of assets”. In the first half of this year, the group launched the AntiCorruption Supervision Division, which demonstrated our high vigilance over these issues. For the legal department, we will continue organising and reinforcing our system, completing the procedures, eliminating flaws, and reducing the potential risk based on our Legal Risk Control Manual. A standardised, transparent, and clearlyauthorised corporate governance is what we are striving for.

镜子”、“找差距”、“反思现状”， 持续保持创造力；提高高效交流的能力 以及处理复杂问题的能力等。 4）深化合规、风控建设 复星集团一向重视合规与风控。复 星集团未来的目标是“管控万亿资产” 。今年上半年，复星集团成立了廉政督 察部，体现了对合规与风控的重视。对 于法务部而言，要继续梳理和加强制度 建设，完善流程，消除缺陷，继续以法 律风险控制手册为核心抓手，进一步强 化风险控制。在公司治理方面，继续向 规范、透明、授权明确的方向去努力。 ALB: 法律部门和其他业务部门怎样协 调配合？挑选外部律所开展合作的标 准？ TJ: 在和其他业务部门的关系上，法务 部强调沟通交流和加强行业研究。企业 法务人员不同于外部律师，要站在公司 的角度思考问题，要尽量在商业判断与 风险把控之间找到一个平衡点。此外法

ALB: How is the cooperation

between your team and the external lawyers?

TJ: The legal department emphasises communication and industrial studies when working with other internal departments within the company.

Unlike private lawyers, the in-house counsel have to think from the company's perspective, and look for the delicate balance point between business judgment and risk control.

Also, the legal department gets our counsels to learn basic accounting and the business trends so that they can help other departments more specifically.

The legal advice for our domestic business is basically provided by our in-house team. But we also have cooperations with external law firms when dealing with foreign-related cases. We prefer those who have frequent cooperation with companies when choosing our partners. We value their experiences in relevant areas, and the service quality of their lawyers.

At the moment, we are completing our database of external law firms from which we can pick up appropriate ones to work for us.

ALB: What are the highest valued

qualities of an in-house counsel?

TJ: The most important qualities that

professional legal services and advice to the daily business and operations of the company, in-house counsels ought to have sufficient knowledge of the law, particularly those about the business they work with. Without the knowledge, one could not make correct judgments about, or take control of, the risks in the operations in order to fulfill the company’s strategic targets.

Apart from the knowledge and judgment, the professional skills required also include efficient communicating abilities.

Horizontally, in-house counsel need to communicate with business partners and their lawyers, as well as colleagues within the company.

Vertically, in-house counsel need to communicate with superiors, subordinates, and the executives; even directly with the president.

Second is sticking to professional ethics. The legal department is the goalkeeper that controls the risk for the company, which requires high moral standards. As an in-house lawyer, one ought to be honest, diligent, dutiful, have integrity and the spirit of teamwork. He must protect the company's secrets, be dedicated and conscientious, and work hard to improve the professional work.

in-house counsel must possess are: First is having strong professional skills. As the personnel providing

务部还强调法务人员学习财务知识，了 解商业中行业的发展趋势，更好地、更 有针对性地为业务部门服务。 复星集团的境内业务基本上全部的 法务工作都由法务部完成，涉外业务有 很多是与外部律所共同合作的。在挑选 律所时，我们倾向于挑选那些经常与公 司有业务合作的所，我们看重的是律所 在相关领域的实践经验及律师的服务质 量等。目前，法务部正在进一步完善律 所库的建设，未来的合作律所将在律所 库中进行挑选。 ALB: 您认为企业法务人员最重要的素 质是什么？ TJ: 企业法务人员最重要的素质体现在 以下两个方面： 其一是过硬的专业素质。法务人员 是为公司日常业务及运营提供专业法律 服务的人员，法务人员应当熟悉法律， 特别是和自己服务部门业务有关的法 律，为业务部门提供专业的法律意见。

只有熟悉法律，才能准确判断业务活动 中的风险，对风险进行有效的控制，并 最终帮助企业实现战略目标。 专业素质不仅包含丰富的法律知 识，良好的判断能力，更包含高效的沟 通能力。横向上，在业务活动中，法务 人员要与业务活动的对方进行沟通，与 对方聘请的律师进行沟通，更要与本公 司内部业务人员进行沟通；纵向上，法 务人员要与自己的上下级沟通，与公司 领导沟通，也需要具备直接与董事长对 话的能力。因此，高效的沟通能力对于 一名合格的法务人员来说是必须具备 的条件。 其二是良好的职业道德素质。法务 部门是企业的风险控制部门，帮助企业 把好风险控制的大门，这要求法务人员 具备更高的职业道德素养。作为一名公 司律师，应当诚实守信，勤勉尽责，具 有团队精神，注重保护公司的商业秘 密，敬业勤业，努力钻研业务。

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LEAGUE TABLES

12

ASIAN LEGAL BUSINESS august 2012

CHINA Announced M&A Legal Rankings

CHINA Announced M&A financial rankings

Stikeman Elliott

22,210.6 DEALS: 3

RANK

Goldman Sachs & Co

31,562.5

VALUE ($mln)

DEALS: 10

MARKET SHARE: 17.7

LEGAL ADVISeR

VALUE ($ MLN)

DEALS

MARKET SHARE

RANK

VALUE ($mln)

MARKET SHARE: 25.2

financial ADVISeR

VALUE ($ MLN)

DEALS

MARKET SHARE

2

Davis Polk & Wardwell

20,765.5

6

16.6

2

Citi

22,555.7

11

18.0

3

Paul, Weiss

19,612.6

4

15.7

3

RBC Capital Markets

17,859.8

2

14.3

4

Blake Cassels & Graydon

18,606.5

2

14.9

4

BMO Capital Markets

17,672.3

1

14.1

5*

Burnet Duckworth & Palmer

17,672.3

1

14.1

5

Credit Suisse

17,394.5

8

13.9

5*

Richard A Shaw Professional Corp

17,672.3

1

14.1

6

HSBC Holdings

11,845.9

10

9.5

5*

Osler Hoskin & Harcourt

17,672.3

1

14.1

7

Deutsche Bank

11,055.6

9

8.8

8

Skadden

12,518.2

12

10.0

8

UBS

9,223.3

9

7.4

9

Weil Gotshal & Manges

11,638.4

4

9.3

9

Allen & Co Inc

8,091.3

2

6.5

10

Fangda Partners

9,747.5

4

7.8

10

JP Morgan

7,654.7

5

6.1

(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

CHINA Announced M&A Legal Rankings

HONG KONG Announced M&A Legal Rankings

Davis Polk & Wardwell

760.1 DEALS: 9

RANK

Freshfields Bruckhaus Deringer

4,849.8

VALUE ($mln)

MARKET SHARE: 1.6

LEGAL ADVISeR

VALUE ($ MLN)

DEALS: 4

DEALS

MARKET SHARE

RANK

VALUE ($mln)

MARKET SHARE: 12.8

financial ADVISeR

VALUE ($ MLN)

DEALS

MARKET SHARE

2

Mayer Brown JSM

522.5

4

1.1

2

Clifford Chance

3,957.3

13

10.5

3

King and Wood

494.8

10

1.0

3

Allen & Overy

3,781.7

6

10.0

4

Mallesons Stephen Jaques

453.2

6

1.0

4

Sullivan & Cromwell

3,779.1

3

10.0

5

Fangda Partners

426.3

11

0.9

5

Baker & McKenzie

3,336.3

6

8.8

6

Shearman & Sterling

388.2

8

0.8

6

Jones Day

2,400.7

2

6.3

7

Allen & Overy

387.6

8

0.8

7

Zhong Lun Law Firm

2,104.1

2

5.6

8

Paul, Weiss

368.6

4

0.8

8

Linklaters

1,259.6

4

3.3

9

Freshfields Bruckhaus Deringer

345.1

5

0.7

9

Kirkland & Ellis

1,067.0

3

2.8

10

O’Melveny & Myers

341.9

4

0.7

10

Gide Loyrette Nouel

941.7

1

2.5

(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

(*tie) Based on Rank Value including Net Debt of announced M&A deals (excluding withdrawn M&A)

ANY CHINESE INVOLVEMENT ANNOUNCED M&A ACTIVITY - QUARTERLY TREND 80

Rank Value US$ billion

70

No. of Deals

83.6

60

46.4

50 40 30 20 10

8.3 9.4

16.6

10.6

15.7

12.4

17.0

1,200 72.1

39.9

42.5

36.5

47.7

45.7 47.1 42.5 42.6

1,000 54.9 45.1

41.9

600

27.5

23.4 21.5 22.6 22.4

800

400

16.7

200

No. of Transactions

Rank Value US$ Billion

90

0

0 1Q 05

3Q 05

1Q 06

3Q 06

1Q 07

3Q 07

1Q 08

3Q 08

1Q 09

3Q 09

1Q 10

3Q 10

1Q 11

3Q 11

NOTES: League tables, quarterly trend, and deal list are based on the nation of either the target, acquiror, target ultimate parent, or acquiror ultimate parent at the time of the transaction. Announced M&A transactions excludes withdrawn deals. Deals with undisclosed dollar values are rank eligible but with no corresponding Rank Value. Non-US dollar denominated transactions are converted to the US dollar equivalent at the time of announcement of terms. Data accurate as of August 15, 2012

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13

王律师事务所 中国业务 王律师事务所是一家较早开展中国业务的新加坡律师 事务所，我们的中国业务组曾赢得多个奖项，是公认 的市场领军者。通过与我们分布在区域内的其他办事 处及分所的其他业务组的紧密配合，本所的中国业务 组能为我们的客户提供完整的法律服务。在为客户提 供与中国相关的投资、融资、并购、资产处置、纠纷 解决等法律服务方面，本所拥有骄人的记录。 With the largest presence in China among Singapore law firms, our award-winning China Practice is a recognised market leader. We work closely with our other regional offices and practices to seamlessly support the legal needs of clients across jurisdictions. We have a strong track record advising clients on their China-related fund-raising activities, investments, acquisitions and disposals. wongpartnership.com 新加坡 | 中国 | 中东 王律师事务所已依据新加坡《有限责任合伙条例》（第163A章）的 规定，注册登记为有限责任合伙律师事务所（机构号：T08LL0003B)

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新三板扩容在即，积极储备企业等待开板 周峰, 合伙人

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永衡昭辉律师事务所 地址：南京市珠江路222号长 发科技大厦13层 210018 电话：+86 25 8319 3322 传真：+86 25 8319 1022 电邮：zhoufeng@yhpartners.

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zhengzhelan@yhpartners.

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非

上市公司股份报价转让代办系统（简称“新三板”）， 是建立多层次股票市场体系的重要环节。“新三板” 是相对于原来旨在解决A、B股退市公司以及原STAQ系统挂 牌公司的流通问题的“老三板”而言的，与“老三板”有本质的不 同，“新三板”设立之初，即定位于“为高科技高成长企业提供 投融资平台”，探索我国多层次资本市场体系中场外市场的建 设模式，探索利用资本市场支持高新技术等创新性企业的具 体途径。2006年1月，两家中关村科技园区企业正式在“新三 板”挂牌，2009年7月，随着一整套股份报价转让业务规则的 出台，形成了“新三板”的市场格局。目前，“新三板”的挂牌企业 已突破120家。 “新三板”的挂牌企业，主要是正处于成长早期的诸如电子 信息、生物制药、新能源环保、新材料、文化传媒等高科技企 业、新兴行业。 从“新三板”试点6年多的实践看，代办转让系统已逐步建 设成为非上市股份公司股权顺畅流转的平台、创投与股权 HYPERLINK “http://funds.hexun.com/smjj/” \t “_blank” 私 募基金的聚集中心、多层次资本市场上市资源的“孵化器”和“ 蓄水池”。 目前新三板的挂牌企业仅限于在中关村科技园区内的企 业，近年来，“新三板”的扩容已经被监管层和市场多次提出，

全国四十多个国家级高新技术园区都在争取新三板试点。今 年以来，新三板扩容的脚步正越来越近。2012年6月15日，证 监会推出《非上市公众公司监督管理办法》征求意见稿，该管 理办法作为新三板交易的基本法律基础。7月23日，中国证券 业协会召集多家券商在大连召开新三板会议，会议主题为交 易制度建设。据了解，新三板交易将引入集合竞价机制，每笔 报价委托最低数量限制由30000股降低至1000股；涨跌幅度 不超过前一交易日收盘价的30%；目前的T+2交易，也将缩短 至T+1交易，与A股市场一致；个人投资者若参与，门槛为证券 账户资产30万元以上。 2012年8月3日，中国证监会有关部门负责人宣布，经国务 院批准，决定扩大非上市股份公司股份转让（业界俗称新三 板）试点。首批扩大试点除原有的北京中关村科技园区之外， 新增上海张江高新技术产业开发区、武汉东湖新技术产业开 发区以及天津滨海高新区。 永衡昭辉作为证券金融专业法律服务的提供者，从2008年 起即开始对企业进行新三板的培训和培育，是南京市乃至江苏 省最早提供新三板法律服务的律师事务所之一，成立了以周 峰、郑哲兰两位合伙人为负责人的新三板项目团队，全心全意 为公司提供高质量、高水平的新三板项目法律服务。现已储备 了十余家新三板企业，只等待新三板开板的钟声。

14

BRIEFS

ASIAN LEGAL BUSINESS august 2012

IN CASE YOU MISSED IT

THIS MONTH’S TOP HEADLINES FROM WWW.LEGALBUSINESSONLINE.COM

REUTERS/Aly Song

China arbitrators throwing contracts into doubt

An internal feud between rival parts of China’s main arbitration body has seen its Shanghai and Shenzhen branches suspended, leaving question marks for investors such as private equity funds over the validity of existing documents and contracts supporting their investments.

REUTERS/Reuters Staff

Bakers advises China Fishery unit on $300 mln notes

Baker & McKenzie’s Hong Kong-based securities team has advised China Fishery Group Ltd on one of its subsidiaries’ recent offering of $300 million 9.75 percent senior notes. The issuer is an indirect whollyowned Peruvian subsidiary of China Fishery Group Ltd, a global industrial fishing company with one of the largest volumes of ocean catch fish in the industry.

REUTERS/Siu Chiu

Skadden helps Wynn Resorts secure $2.3 bln loan

Skadden, Arps, Slate, Meagher & Flom has acted for Wynn Resorts (Macau) in relation to a new $2.3 billion dual currency secured credit facility. The capital raised will be used to finance Wynn Macau’s existing debt, and to fund the development and construction of a new resort in Macau’s Cotai strip.

REUTERS/Bobby Yip

China Telecom ‘to buy parent’s 3G assets for $19 bln’

China Telecom Corp Ltd, the smallest of the country’s three carriers, plans to pay more than 120 billion yuan ($19 billion) for its parent’s 3G assets, a price that surpasses their combined book value. China Telecom, which currently leases 3G bandwidth and infrastructure from its state-owned parent China Telecom Corp, is seeking to acquire the assets to cut long-term costs.

REUTERS/David Gray

China law - the silent victim at Bo Xilai wife’s trial

Gu Kailai, the wife of deposed Chinese leader Bo Xilai and a career lawyer, faces possible execution for murder at the hands of a swift, unblinking justice system that she once championed. Gu, who practised commercial law and wrote once a book about her experiences of both the Chinese and U.S. legal systems, will be at the centre of highly politicised trial this month in which rule of law is unlikely to attract more than token attention.

Ince & Co launches in Beijing Ince & Co has opened an office in Beijing, led by partner Wai Yue Loh, who has moved over from the firm’s Shanghai post. This is the maritime firm’s third office in Greater China, after Hong Kong and Shanghai. The firm’s focus on Beijing will be contentious and non-contentious shipping and international trade matters. Supporting Loh is a team of multilingual lawyers providing commercial legal advice.

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15

中伦文德律师事务所

关注互联网应用开发企业的业务独立性问题 赵梦晗律师，中伦文德 律师事务所合伙人。公司与 证券委员会副主任、私募股 权投资基金委员会副主任。 擅长风险投资、私募股权投 资、企业上市等法律业务。

2

011年，百度CEO李彦宏在百度联盟峰会上提出了中 国互联网存在的三个机会：中间页、读图时代、应用为 王。似乎印证了李彦宏的预测，现代都市人们的生活中充满了 各种Web应用和移动客户端应用以追求更高的生活效率以及 愉悦体验。其中有一类应用，它们依靠拥有庞大用户量的网 站并利用这些平台的用户信息及平台的Affiliate Marketing（ 联属网络营销）模式进行盈利或者拓展用户影响力，如淘宝应 用、人人应用等。这类应用获取数据的来源主要有两类：一是 其依靠的大型网站的商品数据库或者用户习惯统计库，二是用 户授权其使用的数据。数据来源的获得途径而引发的业务独立 性是值得我们思考的一个法律问题。 通常这类应用开发者与开发平台达成的开发协议中会规定， 开发平台禁止开发者将其访问或收集的与用户相关的任何数据 提供给任何第三方；开发平台有权在任何情况下以任何理由随 时修改、限制、暂停或停止全部或部分开发者服务。从这些规 定可以看出，开发平台对于开发者使用用户数据的授权是有 限的、可随时终止的，并且开发平台可以选择在不提前通知的

梁晓宁律师, 中伦文德律 师事务所律师。擅长企业 风险投资、私募股权投资 等领域。

地址：北京市朝阳区西坝河南 路1号金泰大厦19层 邮编： 100028 电话：+86-10-6440 2232 传真：+86-10-6440 2915 邮箱 : zhaomenghan@zlwd.com

liangxiaoning@zlwd.com 网址 : www.zhonglunwende.com

情况下单方限制或者禁止开发者使用开放平台的数据，这将 在极大程度上限制开发公司业务的独立性及完整性。这类应 用前期一般以拓展用户数量为主要目标，后期进入盈利阶段 时，其盈利主要依靠CPS（Cost Per Sale）分成模式，这就需 要其依托的Affiliate平台足够成熟足够稳定。在美国，Pinterest 和Fancy同国内的蘑菇街、美丽说一样采用CPS分成模式，前 两者其本身就是大型Affiliate，它们通过直接促成销售而赚取 商家的小部分佣金，并不依靠第三方提供的链接服务或者联 盟平台。就国内目前的情况而言，拥有几千万甚至过亿用户量 的“大平台”屈指可数，依附这些平台生存的应用实际盈利情况 并不可观，而这些应用与开发平台签署的协议又限制了他们 自建联盟从而进化成为Affiliate。 从VC、PE投资角度，无论是投资人还是应用开发公司都值 得注意，在前期依据开发平台拓展用户数量固然是一个不错的 选择，但是后期公司应当更加注重拓展合作渠道，更加注重培 养自己的用户群，只有不断提高用户数量和用户粘性，才能真 正实现其业务完整性和独立性。

Soaring to new heights GLOBAL, JAPAN TOP IPOS JAL’s IPO is expected to be floated at $8 bln which will make it the second largest listing globally this year Top IPOs globally 2012 Proceeds – $ bln

Issuer

Exchange

Top Japan IPOs of all time Proceeds – $ bln

Nasdaq

NTT Mobile

Japan Airlines

Tokyo

NTT Corp

Felda

Dai-ichi Mutual

Kuala Lumpur

Banco BTG Pactual BMFBOVESPA Activia Properties Ziggo

0

5

10

Issuer

Facebook

East Japan Railway

Tokyo

Japan Tobacco

EuronextAM

Japan Airlines

DKSH Holding

Swiss

DDI

Alpek

Mexico

West Japan Railway

Allison Transmission

NYSE

15

Source: Thomson Reuters.

Reuters graphic/Christine Chan 19/06/12

Central Japan Railway 0

5

10

15

Eclipsed only by Facebook’s listing, Japan Airline’s (JAL) proposed IPO is set to float at $8 billion in September, easily topping the charts for second largest global listing in 2012. It comes not long after another Tokyo-listed success, Activia Properties’ $1.2 billion IPO, which currently sits as fifth largest listing worldwide. Evidently, Japanese companies have been going from strength to strength this year, despite the general economic gloom.

JAL experienced a significant turnaround in fortune, having filed for bankruptcy in 2010, owing more than $25 billion to both shareholders and creditors. The Japanese government then stepped in, giving the carrier $11 billion in state-backed support in an attempt to salvage the company. The airline has rebounded sharply, having doubled the government’s investment in a rare successful case of state-led restructuring in Japan and is now the third-largest airline in the country and sixth-largest in the world.

16

APPOINTMENTS

ASIAN LEGAL BUSINESS august 2012

Lateral hires NAME

Leaving

GOING TO

PRACTICE

LOCATION

Billy Au

Orrick, Herrington & Sutcliffe

Mayer Brown JSM

Capital markets, M&A

Beijing, Hong Kong

Todd Beutler

Withers

DLA Piper

Tax, Wealth management

Hong Kong

Nancy Chang

Mayer Brown JSM

Linklaters

Anti-monopoly

Beijing

James Fong

Hogan Lovells

Mayer Brown JSM

Corporate and Securities

Hong Kong

Henry Huang

Dechert

Mayer Brown JSM

M&A

Beijing

Lan Tao

Dewey & LeBoeuf

White & Case

M&A

Beijing

Winston Li

Horizon

Jade & Fountain

Financing, Investment, M&A

Roger C. Peng

Paul Hastings

Loeb & Loeb

M&A, Private equity

Beijing

Henry Sherman

CMS Cameron McKenna

Minter Ellison

Construction

Hong Kong

Brad Shu

Highking & Partners

Jade & Fountain

Corporate, M&A, Private equity

Beijing

Wang Ying

King & Wood Mallesons

DLA Piper

Employment

Shanghai

Edward Williams

Zhong Lun Law Firm

Jun He Law Offices

M&A, FDI

Beijing

Fay Zhou

O’Melveny & Myers

Linklaters

Anti-monopoly

Beijing

Shanghai

Asia Asia ex-Japan ex-Japan Legal Legal & & Compliance Compliance Best Best Headhunti Headhunting ng Executi Executive: ve: Rank Rank 1 1 Asia Asia ex-Japan ex-Japan Legal Legal & & Compliance Compliance Best Best Conti Contingency ngency Firm: Firm: Rank Rank 2 2 Asia Asia ex-Japan ex-Japan Legal Legal & & Compliance Compliance Best Best Retained Retained Firm: Firm: Rank Rank 3 3

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Discreet. Professional.

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CmlAsia CmlAsia

CareerAsia CareerAsia

The Recruiters Partners speak to in Asia.

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www.cmlrecruitment.com.hk www.cmlrecruitment.com.hk

japan law awards

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17

And the winners are...

Asian Legal Business (ALB) is delighted to announce the official list of winners at Diners Club ALB Japan Law Awards 2012, held on June 7 at the Ritz Carlton, Tokyo.

The 8th annual event, co-hosted by Diners Club and ALB, welcomed Guest of Honour – C. Lawrence Greenwood, Jr. – Senior Managing Director for Government Relations (Japan) at MetLife. He was joined by over 200 lawyers, inhouse counsel, investment bankers, and CEOs from Japan who assembled to celebrate with the winners as they accepted their awards on stage.

Awards in a total of 24 categories were presented to firms, companies and individuals.

Anderson Mori & Tomotsune claimed the most awards. Five in total, including IP Law Firm of the Year, Employment Law Firm of the Year and Best China Practice of the Year. The firm also acted on the CIC & GLP JV Acquisition of Modern Logistics Facilities transaction, which won Real Estate Deal of the Year, and on Resona Holdings Global Offering, which won Equity Market Deal of the Year.

Freshfields Bruckhaus Deringer, Mori Hamada & Matsumoto, Morrison & Foerster/Ito & Mitomi and Nagashima Ohno & Tsunematsu each took home three trophies on the evening.

Domestic investment bank Nomura was one of the big winners – winning Japanese Investment Bank of the Year, Japan In-House Team of the Year; M&A Deal of the Year and Diners Club Award Japan Deal of the Year (for its work on the Takeda Pharmaceutical Acquisition of Nycomed Deal) In addition to recognising the collective talent of law firms and in-house legal teams, the awards also singled-out Japan’s leading individual talents. Ken Siegel of Morrison & Foerster/Ito & Mitomi took home the trophy for Managing Partner of the Year, while Tomohiko Oshikawa of JP Morgan was awarded Diners Club Award Japan In-House Lawyer of the Year. event partner

DEAL AWARDS CATEGORIES

DEAL AWARDS CATEGORIES

Award

Winner

Award

Winner

Debt Market Deal of the Year

Bain Capital Debt Financing for its Acquisition of Skylark

Real Estate Deal of the Year

CIC & GLP JV Acquisition of Modern Logistics Facilities in Japan

Equity Market Deal of the Year

Resona Holdings Global Offering

Structured Finance Deal of the Year

JAL Turnaround Financing

Energy & Resources Deal of the Year

Tokyo Gas LNG Purchase and Equity Interest in Australia Queensland Curtis LNG Project

Technology, Media & Telecoms Deal of the Year

Lenovo - NEC Joint Venture

M&A Deal of the Year

Takeda Pharmaceutical Acquisition of Nycomed

Diners Club Award Japan Deal of the Year

Takeda Pharmaceutical Acquisition of Nycomed

FIRM AWARDS CATEGORIES

IN-HOUSE AWARDS CATEGORIES

Award

Winner

Award

Winner

IP Law Firm of the Year

Anderson Mori & Tomotsune

Sumitomo Mitsui Financial Group

Canadian Chamber of Commerce in Japan Award Litigation Specialist Law Firm of the Year

Morrison & Foerster/Ito & Mitomi

The Japan In-House Counsel Network Award Banking & Financial Services In-House Team of the Year

Employment Law Firm of the Year

Anderson Mori & Tomotsune

Japanese Investment Bank In-House Team of the Year

Nomura

Insolvency Law Firm of the Year

Dual Winners: Bingham McCutchen; Nishimura & Asahi

International Investment Bank InHouse Team of the Year

Morgan Stanley MUFG Securities

Trading Company In-House Team of the Year

Itochu Corporation

Japan In-House Team of the Year

Nomura

Diners Club Award Japan In-House Lawyer of the Year

JP Morgan - Tomohiko Oshikawa

Offshore Law Firm of the Year

Maples and Calder

American Chamber of Commerce in Japan Award International Arbitration Law Firm of the Year

Herbert Smith

Best China Practice of the Year

Anderson Mori & Tomotsune

Managing Partner of the Year

Morrison & Foerster/Ito & Mitomi - Ken Siegel

International Deal Firm of the Year

Davis Polk & Wardwell

Japanese Deal Firm of the Year

Mori Hamada & Matsumoto

SUPPORTING ORGANISATIONS

CANADIAN CHAMBER OF COMMERCE IN JAPAN CHAMBRE DE COMMERCE DU CANADA AU JAPON

ALB SUPPORTS

official card

proudly presented by

18

High-yield bonds

ASIAN LEGAL BUSINESS august 2012

It’s

not junk on sale SME private bonds hot

Since its launch in early June this year, the vigorous offerings and hot subscriptions of China’s SME private bond market reveal an optimistic future, with relatively lowerthan-expected yield and risk. Part of the country’s financial reform and an easier funding instrument for cash-starved private companies, the “junk bond”, is also valuable to lawyers - providing them a convenient routine job and early access to potential growers, finds Liu Zhen

O

n the morning of June 8, only half an hour after the official launch of China’s high-yield bond market was announced, the Suzhou Huadong Coating Glass Company captured the title of first issuer of a small-and medium-sized enterprises (SMEs) bond on the Shanghai Stock Exchange (SSE). One of the first batches of seven firms approved by the SSE, the Jiangsu-based glass maker with a capital of about 2.5 billion yuan ($.39 million),quickly sold out a total of 50 million yuan ($7.9 million) two-year bonds at a yield of 9.5 percent per annum via private placement investors. The notes were listed for exchange three days later.

In the meantime, nine companies also offered their bonds on the SSE, their yields ranging from 8.1 percent to 13.5 percent. Notably, the

official approval procedure of the first issuances did not kick off until May 22, when the China Securities Regulatory Commission (CSRC) released the formal guidelines on SME private bonds. The pace showed the urgent need by SMEs for funds.“ It marked the beginning of an optimistic market,” says Wayne Chen, a partner at Llinks Law Offices.

Hot market Data shows that both issuers and investors have responded positively so far. By July 23 this year, Shanghai and Shenzhen each had 14 completed issuances of SME bonds, together raising 3.6 billion yuan.

The notes were sized from 10 million yuan to 250 million yuan with 7 percent to 13.5 percent yields respectively. In Shanghai alone, an

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additional 14 firms received approval. Sixty six securities traders qualified as underwriters, among which 38 were granted permits to trade.

Most of the bonds were subscribed by financial institution investors.

“These bonds are long awaited,” said Liang Jing, a Shanghai-based senior analyst at Guotai Junan Securities, to Reuters. “All sides need the products: Private firms for funding, securities institutions for asset allocation, and the state for improving the depth of the market.”

Analysts expect about four billion yuan to five billion yuan in high-yield bonds to be issued in 2012, growing quickly to around 100 billion yuan the following year. The market could house more than 300 billion yuan worth of outstanding high-yield bonds by 2015.

Zhou Lei, a Shanghai-based partner at Global Law Office tells ALB that the brand new market in China has yet to see any failures.“The issuing costs, the yields, and the fees of the agencies all seem rather satisfactory to everybody so that generally we see active participation up till now,” he says.

This new financial attempt became popular because it fills a gap in the market, explains Chen. “The issuers want their debt to be sold out at an affordable yield, while the investors want their money to be spent safely with reasonable interests. As long as the demands of both sides are well matched at the balance point, this product is lively,” he says.

Need for cash The worsening economic crisis has squeezed out the cash flow of small-and medium-sized private companies that generate around 80 percent of the jobs in China. But there are frequent complaints from them about difficulties in getting bank loans, and state-run banks often channel the bulk of their annual lending targets straight to other state-owned enterprises (SOEs). Other debt financing methods, such as listed corporate bonds for listed companies only and enterprise bonds for sized firms also set the bar too high to include private SMEs. Debt issuance by China’s non-financial firms accounts for around 10 percent of total corporate financing, compared to 60 percent to 70 percent in mature economies. The result is an overdependence on informal and largely unregulated lending by private Chinese companies.

Therefore, the SME private bond represents and more reasonablypriced financing method for desperate borrowers. “This is for private enterprises, the most active entities in the Chinese economy that are

High-yield bonds

19

suffering the worst financing difficulties,” says Zhou.

The regulators have set much lower standard in terms of the issuers’ eligibility. There is no requirement regarding the issuers’ net assets or revenues in the CSRC guidelines, which is required for sellers of other types of debt. No guarantee is compulsory either. For those who voluntarily provide guarantees, but are not rich in assets, the pressure is significantly reduced by allowing partial guarantees and shareholder guarantees, Chen says.

The capital is a decision taken by market forces, and much better than the unregulated lending market that many private firms were driven to. Regulators have specified that high-yield bond yields must not exceed three times the official benchmark interest rate, which now stands at 3.25 percent for one-year fixed bank deposits.

Spending the raised money could also be more flexible, in comparison to the corporate and enterprise bonds that have fixed usage, Zhou adds. The registration procedure, switched from examination to approval, greatly decreases the necessary preparatory period to as little as two or three weeks. The remaining restrictions include the ban on issues by finance and property companies, and the provision that issuers must hail from a list of six wealthy localities. “The launch of this market is to help out the SMEs with a new financing channel,” says Gu YingYing, a counsel at Run Ming Law Office.

Risk control Officials have warned of the inevitability of corporate defaults as the bond market matures, and it would be wrong to assume that the government would take up defaulter repayment responsibilities.“All participants, especially the investors, have to be aware of this as early as possible,” Huo Da, chief of the bond office of the CSRC, was quoted as saying. Yet investors stand to benefit from the SME private bond market as it has so far managed to restrain the risk to a relatively low level.

Until now, the quality of issuers has remained up to standard, says Zhou. “Among our clients there are many who are also planning for their IPOs, which means their asset sizes, profitability, and risk resistance capacities are higher than the original expectation of the investors,” says Chen, who has started working with five issuers and is preparing for more.

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High-yield bonds He additionally points out that all these clients have prepared their guarantees, and the SSE figure shows that all the registered issuers, completed or not, are 100 percent guaranteed to some extent. The existing regulations regarding information disclosure and debt claiming mechanisms are well designed to protect the legitimate rights of the investors. Although, bond subscribers have to be mentally ready for the “inevitable loss” in the highly risky game.

Chinese regulators, however, would not like to risk repeating the U.S. and European debt crisis in China by rushing into any uncontrolled danger. Opening policies will only come up gradually, as long as market reaction proves positive, Gu says. “They want to see whether the capital markets in China could be led by market forces with the assistance of the government,” she says.

Stringent restrictions are also cast upon the investors. There can be no more than

“It is a fine financial innovation which will complement the existing financing channels and enrich the market.”

Zhou Lei, Global Law Office 200 qualified investors per tranche. Qualified investors must have paid-in capital of no less than 10 million yuan, which has actually made the limit not a huge issue. Qualified institutional investors include financial institutions like commercial banks, securities houses, and fund management companies. Secondary trading will also be restricted within the same pool, although qualified investors can swap in and out. Plus, there has been no mention of foreign participation. “At present, the secondary trading of bonds has not really started, which means it is still far from having the risks like over-leveraging and derivatives,” says Zhou. “Compared with the benefits, the risk is limited.”

Never as junk “Junk bonds”, in an American sense, are typically riskier corporate bonds rated below investment grade, offering rich yields to entice investors. Private bonds that SMEs issue are generally expected to be of the high-yield variety, and are seen as an important part of the development of the country’s “junk bond” market. But both the available ratings and the yield have displayed a different landscape in

ASIAN LEGAL BUSINESS august 2012

China, though there is no bond rating requirement in China at present.

“It is not exactly the “junk bonds”,” suggests Gu. According to the SSE assistant general manager Xia Jianting, seven of the 28 registered issuers who had attained grades from rating agencies, presented a remarkable result from A to AA+. In contrast, normally the so-called “junk bonds” in the U.S. are rated CCC or lower, says Gu. “The higher the risk is, the higher the yield is. At the moment in China, the yields are generally around 10 percent or less,” she says, adding that the CSRC yield also determines that the risk could never be too high.

Out of the 28 bonds so far, only four offered a yield above 10 percent.

The highest, by Julong Educational Technology Co, is only 13.5 percent.

It is barely more than an alternative way of value preservation of the capital, but somehow acceptable for the investors desperately seeking high-return projects in the economic downturn.

In fact, policymakers never intended to build a vivid “junk bond” market for speculation. Instead, it was created for the short-term purpose of helping the SMEs’ struggle through the crisis. “In terms of the quality of the participating issuers, the purpose of the regulators to launch the market and the current game rules, nothing is really the same as the typical American “junk bond” market,” says Chen. “In fact it has nothing to do with “junk”.”

The chance of China’s SME private bonds becoming as “junk” as that of the mature markets, Gu believes, depends on the set up of a supporting system. A complete credit system, rating agencies, and information disclosure policies must be in place before such an ambition can come to fruition. “The regulators are cautiously pushing forward the reform,” she says. “It is still in the phase of experimenting and observation. They are watching whether this new form of capital market could develop healthily and orderly under current conditions.

If not, there would be no more flexibility. And we hope it could be authorised with larger flexibility and more functions.”

Volume sale Legal advisers’ involvement is a compulsory part of the bond issuing procedure. It is not quite a challenging job though. Due diligence investigation, which comes down to a final legal opinion, is basically all it requires. The legal opinion consists of the confirmation of corporate compliance to make sure that the issuance was approved by its executive board, the company is eligible as a non-real estate or financial SME, and it is not in termination or dissolution, says Zhou.

Lawyers are also responsible for the examination of the validity of any other agency involved in the procedure, such as the rating organisation, the guarantee company, the accountancy, and the underwriter, as well as any of the documents including the bond prospectus. “This kind of job is relatively stylised, and not as complicated as that of an IPO. Also it is not as highly charged as an IPO job,” says Zhou.

Consequently the profit margin is not so alluring. Nor is the amount likely to be very big for any single law firm as there will be many firms dividing the cake due to the ease of the job. But Zhou believes that it is still suitable enough for firms to participate in this new market frontier. “In the long term, probably your “junk bond” client would soon become an IPO candidate. The early stage service prepares us nice access,” he says.

Even in a shorter term, such service is lucrative because of the minimal time and effort consumption. “We only need to do what is requested by the clients and the law in a stylised way, which makes it a profitable volume sale business,” says Gu.Chen adds that the lawyers should also advise the issuers on any possible influence the issuance of this high-yield bond might have on their business. “I believe it is a market that deserves great attention,” says Chen.

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Our Future “We have put our future on the international legal service.” Says Zhifeng Sun, founding partner of Sun Law Firm. With the multinationals pouring in and with international disputes growing more and more routine, We have formed International Legal Service Department devoted providing unique legal service in Sun Law Firm since 2009, and have employed our experts with export-oriented mindset, some of whom have been educated or trained at Universities of USA,

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Patent

don’t believe the china’s drug compulsory licence

ASIAN LEGAL BUSINESS august 2012

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REUTERS/Mukesh Gupta

S

When administrative measures related to the strengthening of China’s compulsory licence framework came into effect from May 1, popular media misconstrued the regulation tweak. Various articles declared that compulsory licences could now be issued in China, and that Big Pharma companies were in trouble.

Despite the sensational headlines, lawyers tell Candice Mak plainly that there is nothing revolutionary in the new law – compulsory licences were always in the law books – and that the clearer provisions will simply add another layer of risk to foreign pharmaceutical players.

tarting June 8, media around the globe announced with great gusto that China had overhauled parts of its intellectual property law to “allow its drugmakers to make cheap copies of medicines still under patent protection”. “China to license copies of patented medicines” boomed Aljazeera; “China’s drug law revamp rattles Big Pharma” proclaimed Reuters; “China breaks patent barriers on drugs” extolled The Times of India; even industry website PharmaTimes warbled “China amends patent laws to enable compulsory licensing”. However, none of these headlines or the ensuing reports got it quite right.

The core misconceptions disseminated by the general media were that: 1) Compulsory licensing was now added into China’s patent law; 2) The timing of the “regulation change” was somehow related to the fact that India had, in March, issued its first compulsory licence for the generic manufacturing of anti-cancer Bayer drug Nexavar; and that 3) Large foreign pharmaceutical companies (Big Pharma) were especially unnerved by “China’s latest move”.

But do not always believe everything you read. As numerous lawyers ALB spoke to asserted, in actuality there is nothing alarming about the newest amendments to China’s compulsory licensing regulation under China’s current patent law. Compulsory licences have “always” been allowed and inked into the country’s patent law for over a decade.

The new administrative measures related to compulsory licensing the revised version of the Measures for the Compulsory Licensing for Patent Implementation, which came into effect on May 1 - were issued by the State Intellectual Property Office (SIPO). They simply strengthened the compulsory licensing framework, and implemented detailed procedures regarding application and defence against applications.

“The new regulation does not set out a new law, but merely provides detailed rules for implementing the compulsory licensing provisions already in the law,” says Chiang Ling Li, a Hong Kong-based partner at Jones Day. August Zhang, a Beijing-based partner at Rouse, echoes: “From the legal point of view, there is very little that is new.

Of course, the media articles will try to spin the update. But these are not big steps legally.” Benjamin Bai, the Asia IP head of Allen & Overy also comments that though the “whole world got really excited, the measures were actually quite a non-event”.

Key changes Even prior to the new measures, a compulsory licence (CL) could be granted under the Patent Law if a company or entity is unable to obtain a licence within a reasonable timeframe on reasonable terms and conditions. The main changes in the latest provisions are that clarity is given to the application process and timing, anti-monopoly exploitations are specified as potential grounds for a CL grant, and the scope for compulsory licensing is expanded to include “any matters of public health”. Lawyers have highlighted the antitrust element as one of interest. Zhang of Rouse believes that of the grounds for a CL grant, the antitrust angle would be the toughest since proving a company’s monopoly – as the applicant would have to do – is very difficult. However, it is still possible, and is now included in the much clearer guidance from SIPO. “Anti-monopoly litigation is an area of law that is rapidly developing, and it is likely that future compulsory licences may come on the heels of a finding of an anti-monopoly

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ASIAN LEGAL BUSINESS august 2012

“The new regulation gives China a clearer regulatory basis and flexibility for issuing compulsory licences. But China is likely to continue to be prudent and measured.”

Chiang Ling Li, Jones Day

violation by the court or competent administrative authority,” says Beijing-based Fangda Partners lawyer, Fang Qi. Timing In March, India granted its first ever CL, allowing a domestic drugmaker to manufacture a copy cat version of Nexavar, a cancer drug developed by Germany’s Bayer. This enabled India’s Natco Pharma to sell its generic version of Nexavar at a fraction of the cost of Bayer’s version. Bayer is now challenging India’s CL ruling.

When China issued its CL frameworkstrengthening measures in May, many in the media drew a link between China’s actions and India’s move, to insinuate that China was following in India’s footsteps. However, the timing of when the new regulation went into effect was purely coincidental because the draft rules had been under preparation since the beginning of 2011, and were promulgated only at the end of last year. “I spoke to SIPO officials last November when the draft measures were published for comments. They said, ‘We promulgated a number of rules last year in response to the 3rd Amendment to the Patent Law, so because the law got changed, we are doing the administrative job of cleaning up the rules and regulations in response to the amendment to the law’,” recounts Bai, who emphasises that the CL measures had been planned well in advance, and were a necessary refinement to accompany the most updated Patent Law. “SIPO’s revised measures for compulsory licences were necessary after the 2009 revisions to the Patent Law,” confirms Fang. “So unless proven otherwise, I do not think the revised measures signal a change to SIPO’s cautious approach to compulsory licences.”

Big Pharma effect Despite the fact that CLs have been in the law

books for a long time, China has never granted one. By all accounts of pharmaceutical intellectual property (IP) specialists, this is unlikely to change in the near future. “I am willing to bet that there will be no compulsory licence issued in the next five years, absent the occurrence of a pandemic or national emergency,” says Bai. “I told my clients not to overreact; it’s much ado about nothing.” Li of Jones Day agrees: “China has never granted a compulsory licence, even during SARS. Due to various considerations, China is unlikely going to issue compulsory licences on a routine basis.” Several lawyers noted that in a high-profile example from 2003, a Chinese company applied for a CL for the Roche-owned drug Tamiflu, but the government denied the request.

This ought to be reassuring to Big Pharma. Although there is clearer guidance for the framework of CLs now, China’s track record reflects that it is not really interested in granting them freely. “There is no need to panic as we have not seen aggressive enforcement of compulsory licences from SIPO, other than the issuance of the administrative measures,” says Fang. The lawyers underscore China’s desire to protect its international IP reputation, and its continued efforts to attract foreign investment. “The new regulation gives China a clearer regulatory basis and flexibility for issuing compulsory licences. But China is likely to continue to be prudent and measured,” says Li. Zhang concurs: “It’s not something it would do very easily or quickly.”

However, this does not mean that Big Pharma should turn a blind eye to China’s CL rules. Alison Wong, a Hong Kong-based partner at Bird & Bird, does feel that Big Pharma should be wary.

“Understandably, the CL provision dealing specifically with patented drugs will be of great concern to pharmaceutical companies, and time will tell as to whether the authorities will exercise their discretion in exceptional cases only,” she says. Just because China has never issued a CL, that does not mean it may never happen. Drug companies need to be aware of the potential effects of the new measures. “Even though nobody has been successful so far in applying for a compulsory licence, the developments do bring some possible concern for foreign drug companies,” says Zhang.

The new regulation provides the Chinese government with the upper hand when negotiating with foreign companies on drug prices and access, or in regular licensing negotiations. “The new regulation is a reminder to patent rightholders that China has the option to issue CLs if disputes are not resolved, or compromises are not reached,” says Li. “Even if it (Chinese government) continues not to issue compulsory licences, it will probably use the new rules as a bargaining chip.” Bai of Allen & Overy deems this a “real risk” for Big Pharma. “I think the real threat is the possibility of the government dangling a compulsory

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licence to force companies to provide access to certain drugs,” he says.

One example of the new CL effect is, as Reuters reported on June 8, related to Gildead’s HIV drug, Tenofovir. The drug, known by its brand Viread, had worldwide sales of $737.9 million last year. China’s government, initially slow to acknowledge its growing problem of HIV/AIDS in the 1990s, now admits to having a ballooning number of HIV/AIDS cases. Although Gilead moved to share its IP rights on its medicines in a patent pool with generic drugmakers from many countries last July in return for a small royalty, China was excluded. This meant it had to continue paying high prices for Tenofovir.

Since the change in China’s Patent Law, Gilead has offered certain concessions including giving China a substantial donation of Tenofovir if it continues to buy the same amount, said Paul Cawthorne, coordinator for Medecins Sans Frontieres’ Access Campaign in Asia. “This is all a negotiation game; this offer from Gilead came about once the news that the Chinese were considering issuing a CL came out. The end game is okay; you get a better deal or you use the CL. It’s a strategy that many countries use,” he told Reuters.

“I think the real threat is the possibility of the government dangling a compulsory licence to force companies to provide access to certain drugs.”

Benjamin Bai, Allen & Overy

REUTERS/Michael Caronna

Big Pharma response Lawyers say the new CL regulation simply adds another layer of risk and challenge to what Big Pharma already deal with on a daily basis around the globe. “The risk won’t be any greater for them than in the U.S.,” says Bai. But he does counsel that “the MNCs (multinationals) should have a strategy in dealing

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ASIAN LEGAL BUSINESS august 2012

Court-sanctioned compulsory licences

A

lthough the term “court-sanctioned compulsory licence” (CSCL) is not officially recognised, numerous academics and a growing number of lawyers are viewing this approach as amounting to a de facto compulsory licence (CL). In essence, it is where a court denies a permanent injunction but awards damages and so infringers continue infringing. “This is tantamount to the same thing as a CL,” says Allen & Overy Asia IP head, Benjamin Bai. The hallmark case demonstrating this judiciary route to obtain a de facto CL is found in the U.S., in a 2006 Supreme Court decision on eBay Inc v MercExchange LLC. According to a Fordham Law Review article

by H. Tomcis Gómez-Arostegui: “The Supreme Court held that traditional equitable factors apply to injunctions in patent and copyright cases, and therefore, the mere fact that a defendant has infringed a patent or a copyright does not necessarily mean a final injunction must issue. In the three years since, lower courts have denied final injunctions more frequently than before and are now struggling with what relief, if any, to give prevailing plaintiffs in lieu of an injunction. Some courts permit plaintiffs to sue again later. But most award prospective relief to plaintiffs-sometimes a lump-sum damages award or more commonly a continuing royalty-to compensate plaintiffs for the defendant’s anticipated post-judgment infringements. Plaintiffs often object to prospective-compensation awards as constituting compulsory licences.”

In China, although the prospect of a CSCL is still quite rare, it has happened in a handful of cases. In one famous instance, Wuhan-based China Environmental Project Tech (CEPT) sued Fujikashui Engineering (FKK) and Wuhan Huayang Electricity (WHE) in a Fujian Higher Court for patent infringement. After an eightyear long battle that went all the way up to

the Supreme People’s Court, FKK and WHE were found guilty of infringement and held jointly liable for damages in December 2009. Even though an injunction was granted against FKK, an injunction was denied against WHE for public interest reasons - thus resulting in a de facto CL, a CSCL. Upon paying a licence fee, WHE was able to continue using CEPT’s technology.

August Zhang, a partner at Rouse, says that because the Supreme People’s Court made an interpretation that the court does not need to grant an injunction, CSCLs are possible in practice. “Particularly if you have a good reason for public interest, the Supreme People’s Court has made it clear that courts may not be able to stop the infringement of a patent and the infringer can continue use,” he says. Alison Wong of Bird & Bird agrees that a CSCL is rare: “Only in a case of public interest would a Chinese court refuse a permanent injunction.” She points out that if the courts too easily granted CSCLs in patent infringement cases, “the value of a 20-year patent right should be seriously undermined”.

Despite the fact the CSCLs may lead to the same result as a CL, another school of thought from legal practitioners is that they are not CLs. By definition, a CL must be issued by the government and allows an individual or company to use a patent without seeking the owner’s consent, though it does need to pay the patent holder a set licence fee. Jones Day partner Chiang Ling Li says that CSCLs may not always end up with the same result as a CL, so including “CL” in the term is not accurate. Fangda Partners’ Fang Qi also does not view the CSCL as the same as a CL. He notes that a court’s refusal to grant an injunction would mostly originate from public interest concerns, which differs from the grounds for a CL as outlined in the Patent Law. “First, even though the court may not grant an

with the Chinese government when it waves a CL over their heads.” Li concurs and says that MNCs “do not need to be overly worried. But they need to consider management strategies”. Zhang feels that at the moment, what all his clients need to do is to “keep an eye on this development”, and find out whether there are real applicants in the process of applying

injunction in a case, the infringing party is still identified as an infringer and not a licencee. Second, because of the characteristics of civil litigation, the court is only dealing with one particular dispute instance. Thus, the fact the infringer may continue infringement in a particular dispute instance does not mean it can freely exploit the invention,” he says. Thirdly, he says the CLCS is an ex post remedy, and that the damages awarded in these particular cases are based on the infringer’s gains or patentee’s losses. “The royalty rate for a compulsory licence is decided ex ante, likely based on prevailing rates for comparable patented technologies between parties in similar situations,” Fang elaborates.

“If one were to take a strict definition of CLs as government-agency granted rights, then court-sanctioned CLs are not CLs,” says Bai. “However, most people don’t take that narrow a view. There are definitional differences, but it does not change the fact that a de facto CL accomplishes the same goal as a regulatory CL.” Regardless of the varying viewpoints on the definition of CSCLs, the lawyers are in agreement that it is part of a host of IP litigation strategies. The judiciary route to acquire a CSCL is “easier and quicker” than applying and waiting for the government to issue a CL (especially given the fact that it has never acceded to a request). “A CL is a useful tool, like a bargaining chip; it works in a multifaceted way. The threat of a CL – both a court-sanctioned one and one from the government – should always be in anyone’s war chest,” says Bai. “When I defend patent infringement claims, I consider the option of going to a court to get a CSCL. In the meantime, I also weigh the option of getting a CL from the Chinese Patent Office. It’s a multipronged approach.”

for a CL on their products. “Keep in close contact with SIPO,” he says.

Constant communication with the authorities is always recommended.

“Big Pharmas need to keep open communication and regular contact with authorities so that they are up to speed as to the government’s policy on how to implement the new CL provisions under the patents law,” says Wong. Other suggestions from IP specialists include brand owners reviewing pricing issues in China and considering whether there are any new licensing strategies to utilise.

Patent

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REUTERS/Richard Chung

“Even though nobody has been successful so far in applying for a compulsory licence, the developments do bring some possible concern for foreign drug companies.”

August Zhang, Rouse

One core aspect for Big Pharma success in China is to ensure they are meeting the market’s demands for their products. If there is enough supply, it is likely the Chinese government will not focus much attention on the drug company. However, as Bai points out, “if the fear of an undersupply develops, the government may consider issuing a CL for generics to produce the drug to meet demand”. “The real solution is to be more engaged with the Chinese consumers, and to work with the government to make sure if you have a patent; that you meet domestic demand. This would be a win-win situation for the government and the drug companies, and a CL can be avoided,” he says. Bai is a proponent of the “holistic approach” to China – one that “balances profits with consideration for the real human aspect and the social responsibilities”, and encourages Big Pharma to implement this type of strategy.

Innovation-bound Rather than homing in on the potential issuance of a CL, outsiders should instead be watching China’s gradually-shifting pharmaceuticals landscape.

Unlike India, which has developed a formidable generics industry, China’s ambition is to become the next great drug innovator country.

“Thus, I do not see the widespread use of the CL for pharmaceutical products,” says Fang. Bai says that “from its latest Five-Year Plan, it’s clear that China wants to develop an innovative biotech and pharmaceuticals industry. This is a planned economy”. There has been financial support and incentives from the government to bolster research and development (R&D) efforts, and the authorities have consistently been encouraging domestic pharmaceuticals to acquire patents.

“Domestic companies are continuing work on generics, but they are also developing the R&D side for innovation,” says Li. According to various statistics, 88 percent to 95 percent of Chinese pharmaceutical companies manufacture generic drugs. However, there are a handful that are working on morphing into innovative players. Zhejiang-based Simcere Pharmaceuticals, a New York Stock Exchange-listed company, is one such example. “Innovation is the key driver of our progress towards excellence. In recent years, we have refined our strategy to focus on the development of first-to-market generic and innovative pharmaceuticals,” says the firm’s website. Last year, it received approval

Patent

ASIAN LEGAL BUSINESS august 2012

“There is no need to panic as we have not seen aggressive enforcement of compulsory licences from SIPO, other than the issuance of the administrative measures.”

Qi Fang, Fangda Partners

REUTERS/Jacky Chen

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from the State Food and Drug Administration for a new disease modifying anti-rheumatic drug named Iremod. It was independently developed by the company, and will be the first Iguratimod drug on the global market.

Jiangsu Hengrui Medicine is another domestic player investing in R&D. Shanghai-based Hutchison MediPharma states on its website that it is “a novel drug R&D company focusing on discovering, developing and commercialising innovative therapeutics in oncology and autoimmune diseases”. The company has compounds in pre-clinical, phase I, phase II, and phase III development stages.

With the developmental timelines being so long, an innovative drug will not go to market anytime soon from China. However, numerous domestic companies are working hard to make it a reality. “They are in the process of developing the next generation blockbuster drugs that will be sold all across the world,” says Bai. So when will China emerge as the newest drug innovator country?

It is too soon to tell for sure, but industry watchers estimate that within a decade, China will likely reach its goal. “When has China not met its goals?” asks one domestic lawyer. “Look at China’s track record; it achieves whatever it states in its Five-Year Plan.” Since domestic Chinese drug companies are seemingly on the right track toward novelty and innovation, what Big Pharma really need to watch out for is the impending competition it will face from China in this generation – and not wring their hands over a nebulous potential CL grant.

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自

Rocky T. Lee, Asia Managing Partner, Head of Greater China Corporate Practice

2 0 0 5年进入中国，美国凯 威 莱 德 律师事 务所（Cadwalader, Wickersham & Taft LLP）一直致力于将两百多年的华尔街经验与中国本 土智慧相糅合，努力为国际金融机构和跨国公司带来 专业高效而又独具慧心的法律服务，为其开拓中国市 场助力加码。 近年来，外商境内投资风波不断，长期为外商所采 用的VIE（Variable Interest Entity，可变利益实体） 结构丑闻频爆，原先处于监管灰色地带的VIE如今前 途难卜。面对市场的波诡云谲，凯威莱德凭借强大的 专业实力坚定地走在了跨境投资结构创新的前列。 综合多年中国受限行业的法律经验，凯威莱德亚 太区管理合伙人李大诚律师带领手下团队独创跨多界 控制模式（Multi-Jurisdictional Captive Company Structure），对原有的VIE结构做出符合中国监管的 优化设计。该架构能够帮助境外投资者建立中国运营 分部，并在受限领域获得营业执照。通过MJCC，公 司不仅将以独资形式进入中国市场，完全掌控运营平 台及公司品牌，更可在今后对中国业务进行分拆，实 现香港上市。 2010年加入凯威莱德的李大诚律师是中国受限制 行业的顶级法律专家，其个人在互联网、电信、新媒 体领域拥有丰富的经验与深刻的见解，曾参与起草多 项由中国商务部牵头的外商投资法律文件，在风险投 资、私募股权圈内拥有极佳口碑。因其出色的专业素 质及管理能力，李大诚律师被 ALB评为2011年度大 中华区最受关注的25位律师之一，并荣获“呼风唤雨 奖”(the “Expert & Rainmaker” Award)。 在他的带领下，凯威莱德积极把握对华投资的新趋 势，大力拓展在华新业务。据李大诚律师透露，事务所 正在帮助多家上市的跨国零售巨头如泰德贝克（Ted Baker）等，打开中国市场并建立对华的网上零售平 台。凯威莱德的专业团队恰能为这种网上、网下联动 的全新对华投资结构提供全方位的法律服务。

Cadwalader, Wickersham & Taft LLP A: Beijing

2301 China Central Place

Tower 2, No. 79 Jianguo

Road, Beijing 100025 China T: +86 10 6599 7200 F: +86 10 6599 7300

A: Hong Kong 27th Floor, 100QRC 100 Queen’s Road Central Hong Kong T: +852 2946 1100 F: +852 2946 1200 E: rocky.lee@cwt.com W: www.cadwalader.com

如今，凯威莱德已在纽约、伦敦、布鲁塞尔等全球 八个重要的经济金融中心设立代表处。2005年，北京 代表处正式成立，2010年，凯威莱德又在香港设立第 二家亚太区的代表处。两家办事处现共拥有六位合

伙人，十八位律师和八位法律员工。这支专业的团队 熟知西方资本市场的运作规律，更深谙中国当地的法 律体系及商业环境，既帮助跨国企业在中国繁复的监 管体系中挖掘机会，也为中国的大型金融机构及企业 走向世界铺平法律道路。 目前，其在华业务主要关注资本市场的股权债券发 行以及外商直接投资、兼并收购、公司治理、反垄断、 财务重组等多种公司业务；同时，倚靠多年的华尔街经 验，凯威莱德还为国内大型银行、券商、金融管理公 司、资产管理公司获取美国从业牌照提供至优服务。 律所荣誉： 1. 凯威莱德律师事务所在中国的业务被《法律 500强》评为“2012年度私募股权及风险投资领域顶级 律师事务所”。 2. 凯威莱德律师事务所在中国的业务荣获英国 《Corporate INTL》杂志颁发的“2012年度中国区最 佳企业律师事务所”大奖。 3. 《Asian Legal Business》杂志授予凯威莱 德律师事务所“2011年度中国最值得关注律师事务所” 荣誉。凯威莱德律师事务所被认为是亚太地区内最有 可能在法律头条制造最大影响的十大最值得关注的律 所其中之一。 合伙人荣誉： 1. 自2005至2011年，李大诚律师连续七年被《 亚洲法律》评选为“私募股权及风险投资领域杰出律 师”，他被业界同行（包括企业高管、专职顾问及该领域 律师）认为是私募股权及风险投资领域亚洲最顶级律 师。 2. 凯威莱德律师事务所亚洲区管理合伙人李大 诚律师于2007至2011年连续五年被《钱伯斯亚洲》评 为“私募股权及风险投资领域国际律师事务所顶级律 师”。 3. 陈 彗 律 师自 2 0 0 8 至 2 0 1 0 年连 续 三年 被 《Chambers & Partners Global》及《钱伯斯亚洲》 评选为“资本市场及证券领域杰出律师”。陈律师以其在 业界的出色表现获得广泛认可，并被钱伯斯赞誉为“专 业，技能卓越并易于合作”律师。

凯威莱德所提供的法律服务是卓越的，且在中国资本市场中名列前茅。凯威莱德之服务不仅 及时、准确、极具价值，而且其合伙人李大诚（Rocky T. Lee）律师及其团队在任何时候都 始终敬业、专业、值得信赖。我们期待继续与凯威莱德合作，并进一步加强我们之伙伴关系。 -- 中国工商银行

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PITFALLS AND OPPORTUNITIES:

ASIAN LEGAL BUSINESS AUGUST 2012

NAVIGATING THE

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BY SHAHEEN PASHA AND LAYLA MAGHRIBI ADDITIONAL REPORTING BY REUTERS

As the West suffers an unprecedented period of economic instability and mounting financial scandals, it is increasingly evident that the opportunity for growth lies further east. The Middle East and North Africa, in particular, are expected to outpace the rest of the world, according to a July report by the International Monetary Fund (IMF). In the report, the IMF stated that it expects regional economies to expand this year by 5.5 percent, up from its previous estimate of 4.2 percent. However, by comparison, it expects the crisis-hit euro zone to contract by 0.3 percent and trimmed its estimates for the United States.

"In contrast with the broad trends, growth in the Middle East and North Africa will be stronger in 2012 and 2013 relative to last year," the fund said in its quarterly revision of economic forecasts. "Key oil exporters continue to boost oil production and domestic demand, while activity in Libya is rebounding rapidly after the unrest in 2011."

But the Middle East and North Africa are not without their own geopolitical challenges, which could serve as a hindrance to business. To help navigate the sometimes treacherous terrain in the region, the following is an overview of some of the opportunities and challenges the business and legal communities face when attempting to do business in the Middle East.

REUTERS/Peter Andrews

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The United Arab Emirates, once the Golden Child of the region with the glitz and glamour of Dubai, suffered a thrashing in the wake of the global financial crisis. Humbled by Dubai World’s $25 billion restructuring and tarnished by the ghost towns that emerged as construction and development dried up, the UAE is once again seeking its place on the global stage with significant legislative reforms that it hopes will spur investment.

The revised Commercial Companies Law is among the most anticipated pieces of legislation due by the government. The draft of the law, which was approved by the UAE cabinet in December 2011, will allow business ventures, especially small enterprises, to forgo the 150,000 dirham minimum capital requirement under the old Companies Law passed in 1984. It will also address issues of corporate governance by increasing transparency through the disclosure of financial statements, and is expected to provide a set of unified accounting standards based on international best practices.

“The new law will predominantly impact public joint stock companies, and will introduce some good general changes that will assist in attracting more funds into these companies. Changes to the general framework of PJSCs will protect and clarify the rights of stakeholders, improve levels of transparency through the disclosure of financial statements, and improve the integrity of boards,” wrote Mohammed El Ghul, senior associate and Intisar Sadek, senior counsel, at local law firm Habib Al Mulla & Co in an April report.

Still, there are areas that lawyers fear fall short of what is needed to truly reform the legislative system. The most anticipated change revolves around the issue of foreign ownership. Under the current legislation, foreign owners are restricted from owning more than 49 percent of a limited liability company. A local partner must hold the rest.

The new Companies Law is expected to give the UAE cabinet the authority to raise that ceiling of ownership for foreign owners in certain sectors and industries.

Essam al-Tamimi, senior partner at Al Tamimi & Co, told The Brief earlier this year that the decision to only provide exemptions

A development is seen on one of the islands on the World Islands project in Dubai. REUTERS/Jumana El-Heloueh

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“2008 AND 2009 WAS THE WORST TIME EVER FOR DUBAI, AND EVERYONE THOUGHT IT WOULD COLLAPSE. BUT, ACTUALLY, DUBAI IS A REGIONAL HUB WHERE MOST BUSINESSES IN THE REGION ARE RUN OUT OF. PEOPLE WILL CONTINUE TO INVEST HERE.” HUSAM HOURANI, Al Tamimi & Co

to the 51 to 49 percent foreign ownership rules in select cases rather than change the law altogether to accommodate 100 percent ownership by foreigners, may turn off some investors who are eagerly awaiting a firmer stance on the issue.

The UAE received foreign direct investment worth $3.9 billion in 2010 and $4.0 billion in 2009 respectively, according to the United Nations Conference on Trade and Development. These figures were sharply low compared to $13.7 billion in 2008 because of the global financial crisis and Dubai's own corporate debt problems. The country is expected to benefit from a flight-to-safety in the wake of the Arab Spring.

While legislative changes are certainly on the minds of investors interested in the UAE, the shadow of debt restructurings remains.

State-owned Dubai World rocked global markets in 2009 when it announced that its property development unit Nakheel was unable to make payments on its Islamic bond.

The trickle down effect of this disclosure was the exposure of a culture of implicit guarantees in debt dealings within the country, which forced Abu Dhabi to come in and help bail out its troubled neighbour.

Now almost three years later, Dubai and many of its entities are on the road to recovery following a spate of debt restructurings. Still, there are bumps along the road. The Dubai Group, for instance, remains embroiled in contentious debt negotiations. The Royal Bank of Scotland and two other banks have abandoned talks on restructuring the Dubai Group's $10 billion debt, and threatened to bring unprecedented legal action against the investment vehicle of Dubai's ruler, sources close to the matter told Reuters in July.

Sources said the banks were demanding immediate repayment, and would take the issue

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The Burj Khalifa stands in Dubai. REUTERS/Mohammed Salem

to court if necessary.

Trying to go through the courts could prove hard given the uncertainties over insolvency law in Dubai. While the UAE has bankruptcy legislation, the statute has never been tested by the kind of multibillion dollar, multijurisdictional case which a Dubai government-related entity would represent.

Lawyers and bankers complain the legislation is out-of-date - especially in terms of criminalising anyone who defaults on debt and is open to a judge's interpretation, which means two identical cases could yield vastly different rulings. Also, bankruptcy legislation is spread across several different laws. A new insolvency law is in the works, but will not be passed in time to address the current wave of restructurings facing Dubai, lawyers say.

Still, the Gulf Arab state has made some progress on restructuring its debt, and that has improved confidence. Healthy demand in April for the state's first sovereign bond issue in nearly a year suggested that investor confidence in Dubai was on an upward trend.

Analysts and legal experts say there is room

now for the UAE, and Dubai in particular, to restart some of the country’s stalled projects.

After the debt crisis hit, spending on infrastructure projects fell sharply. Last year, it dropped 20 percent to 7.1 billion UAE dirhams ($1.9 billion), half the level seen in 2008.

But conditions are improving. Abu Dhabi has revived plans to build branches of the Guggenheim and Louvre museums as part of a $27 billion cultural project aimed at making Abu Dhabi a cultural capital for the region.

Drydocks World, a shipbuilding unit of Dubai World that is in the process of restructuring $2.2 billion in debt, plans to build the world’s first underwater hotel.

“2008 and 2009 was the worst time ever for Dubai, and everyone thought it would collapse. But actually, Dubai is a regional hub where most businesses in the region are run out of,” says Husam Hourani, managing partner at Al Tamimi & Co. “People will continue to invest here. There is increasing opportunity from tourism and hospitality, and companies with bases here are going to want to invest in their future business.”

Bordering the UAE to the west is the kingdom of Saudi Arabia, which is fast becoming the market to watch in the Gulf. The kingdom boasted gross domestic product of 6.6 percent last year, fuelled by soaring oil prices and heavy government spending. Robust government spending is slated to continue with the Ministry of Finance projecting in December last year that the kingdom will spend 690 billion riyals ($184 billion) in 2012. Much of that expenditure is expected to take place in the construction and infrastructure sectors, creating vast opportunities for businesses and legal advisers alike to cash in on the bounty.

Infrastructure is key when exploring the Saudi market. For instance, Saudi Arabia's construction sector is fuelled predominantly by public spending on economic and social infrastructure. Business intelligence firm Business Monitor International (BMI) said in a recent report that construction industry growth rates will accelerate over 2012 and 2013, thanks to the government's vast

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infrastructure investment scheme aimed at staving off public discontent. The Arab Spring uprisings last year sparked concerns of similar protests in the kingdom, where unemployment is a growing concern among Saudi Arabia’s large youth population. To counter the threat of unrest, especially as violent protest erupted in neighbouring Bahrain, King Abdullah of Saudi Arabia established a $130 billion plan to create jobs and build subsidised housing.

Saudi Arabia is estimated to have projects worth $623 billion currently underway, according to the economic weekly MEED, making it by far the largest projects market in the region, worth almost as much as the other five GCC states combined. A report by MEED Insights also estimates that the kingdom has more than $300 billion worth of projects planned and yet to be awarded.

Project finance is considered to be a major area of growth within the Saudi market. For instance, Saudi Arabia's General Authority for Civil Aviation (GACA) is funding the building of the 27 billion riyal ($7.2 billion) King Abdulaziz International Airport in Jeddah through a series of Islamic bonds that are fully guaranteed by the Saudi Ministry of Finance. Saudi Arabia’s Al-Jadaan & Partners has joined global law firm Clifford Chance in advising GACA on the deal.

Dominic Harvey, Abu Dhabi-based partner at Vinson & Elkins, says the expected flood of business has prompted the firm to expand with a Saudi Arabian office to further target project finance work. Social infrastructure such as power, water and wastewater projects will be key, while transportation infrastructure, alternative energy and more metals and petrochemical facilities will also keep law firms busy in days to come. Baker & McKenzie, for instance, recently advised the Dow Chemical Co and its subsidiaries on Islamic project financing worth $1.4 billion to support the construction and operation of three integrated petrochemical plants in the Jubail Industry City.

The emphasis on social infrastructure and thus ensuring that its population does not take to the streets is of particular importance to the kingdom, as unrest could threaten the oil industry and its exports. Saudi Arabia, which has the largest oil reserves in the world, produces over nine million barrels a day.

While oil prices have been high amidst the global economic crisis, the kingdom has been actively attempting to diversify the economy away from its heavy reliance on oil. Over the

last 15 years, Saudi Arabia has made strides to open itself up more to both foreign investment and different industries.

Real estate has seen a particular boom; a trend that is at odds with troubled real estate markets in the rest of the Gulf, lawyers say. Strength in that market is expected to get an additional boost by the passage of the highly-anticipated, and much-delayed, mortgage law. After over a decade of study, the government approved the country's first law permitting mortgages in July.

Saudi Arabia's housing market will need 1.65 million new homes by 2015 to meet demand, according to a report released by Banque Saudi Fransi last year. Private and public developers will need to build about 275,000 units a year for a population that has doubled in size since 1988, and is growing by more than 2 percent annually, it said.

The mortgage law, which includes regulations covering mortgage finance institutions, home leasing, and legal mechanisms to settle disputes, could make it much easier to satisfy this demand for housing.

According to a Fitch Ratings report, the introduction of a mortgage law in Saudi Arabia will improve the housing supply and social stability, and also provide for diversification of the banking sector. Interest is already emerging from the financial sector. Saudi Arabian investment bank Sidra Capital plans to set up a housing mortgage firm with one billion riyals ($267 million) of capital to tap growth expected after the kingdom passed a law covering mortgages, chief executive Hani Baothman told Reuters.

Baothman has said that the law is expected to encourage the formation of several companies to compete with banks in mortgage financing, but this could not happen without an active sukuk market to provide such companies with the liquidity necessary for lending. Sukuk have been a strong area for growth in recent months. A spate of issuances out of the kingdom, in both domestic and dollar denominations, has been met with strong demand.

For law firms, Saudi Arabia’s burgeoning sukuk market is proving to be profitable.

Recent deals include petrochemical company National Industrialization Co’s (Tasnee) two billion riyals offering in May, while dairy firm Almarai completed a one billion riyal deal in March. Momentum for sukuk issuances in the Gulf is expected to continue through the end of the year at least, with Saudi Arabia serving as the main driver, lawyers say.

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The Kingdom Tower stands in the night in Riyadh. REUTERS/Ali Jarekji

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Vehicles drive past skyscrapers on a road in Doha. REUTERS/Mohammed Dabbous

“THE POLICY OF THE GOVERNMENT IS THAT QATAR WANTS TO MOVE FROM A FRONTIER MARKET TO AN EMERGING MARKET. IT NEEDS A CRITICAL MASS OF COMPANIES LISTED.” AHMAD ANANI, Latham & Watkins

ASIAN LEGAL BUSINESS AUGUST 2012

Qatar, which made its mark among global economies as the largest producer of liquefied natural gas, has gained even more fame in recent months after the small Arab kingdom won the bid to host the 2022 FIFA World Cup. With this achievement, Qatar has been thrust into the international spotlight with an aggressive push by the government to improve the country’s infrastructure and facilities, creating a wealth of opportunities for businesses and lawyers alike.

The country has allocated 40 percent of its budget between now and 2016 to infrastructure projects. State-owned property developers Barwa Real Estate and Qatari Diar, for instance, are set to spend 100 billion riyals ($27.5 billion) over the next five years to 2016 on commercial and residential projects, according to a national development strategy unveiled last March. The government is backing this budget allocation with promised public investment worth $95 billion during the period, over $65 billion of which is expected to be on infrastructure.

There are plans to spend $11 billion on a new international airport, $5.5 billion on a deep-water seaport, and $1 billion on a transport corridor in Doha. An additional $20 billion will be spent on roads. Among its more ambitious projects, Qatar plans to implement a $41 billion rail project. In October last year, Qatar Railways had stated that it had received bids from around 60 consortiums with at least two contractors each for the same. The project will include four rail lines, and will link stadiums that will be used to host the various matches of the soccer World Cup. The rail project is also expected to have an underground component at the centre of the capital city of Doha. Education and healthcare will also be major industries of growth, experts say.

Government spending will be a key driver for growth in 2012 and into next year, according to a recent report by Emirates NBD research. According to the government’s recently released budget, development and infrastructure spending is projected to rise by 7.1 percent to 62.1 billion riyals this year.

To help fund some of its proposed projects, Qatar recently made history by issuing the largest dollar-denominated Islamic bond to date valued at $4 billion. The two-tranche sukuk, which was the government’s first Islamic debt issue in nine years, attracted a massive order book of over $24 billion. International law firms Latham & Watkins and White & Case advised on the deal.

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“The government is going to be injecting money and liquidity into the market, so there will be certain areas where we will see legal work and growth,” says Ahmad Anani, corporate partner at Latham & Watkins, who is based in Doha and Abu Dhabi. “This is a planning phase. We will then see a lot of construction work for lawyers. Real estate will be required, which will create another important area for business. I see this market on a steady growth over the next seven years.”

Anani added that capital markets work will be a hot area for the legal community in Doha. Islamic lender, Barwa Bank, a unit of Barwa Real Estate, plans to issue a sukuk by 2013 and is eyeing a share listing over the longer term, its chief executive told Reuters in June. The bank sees an issuance as helping smooth out maturities in the Gulf state, which plans to invest about $130 billion in its nonhydrocarbon sector between now and 2018.

A yen-denominated deal by Qatar's quasi-sovereign oil and gas company, Qatar Petroleum, is also said to be in the works, according to IFR Markets, a unit of Thomson Reuters. In another potential deal in the works, Qatar Telecom has asked banks for proposals about a $1 billion commercial paper programme, three sources told Reuters

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in May. It would be a rare example of a Middle Eastern entity using such an instrument.

Commercial paper, which is a short-term unsecured debt instrument used to manage near-term obligations and to finance everyday expenses more easily, has so far only been issued by a couple of regional banks and Abu Dhabi state-owned investment fund Mubadala.

Initial public offerings are also expected to be a hot market for lawyers in the coming months. Latham & Watkins is currently working on six IPOs that are expected to launch in the second half, and into the first quarter of 2013, Anani says. The firm is also in discussions regarding three more IPOs out of Qatar.

“The policy of the government is that Qatar wants to move from a frontier market to an emerging market,” he says. “It needs a critical mass of companies listed.”

Despite its diversification into other industries, there are still plenty of opportunities within Qatar’s energy sector. A moratorium has been placed on the export of LNG until 2015, but the country is seeking alternatives.

Qatar plans to spend $25 billion on expanding its domestic petrochemical industry over the next decade, thereby more than doubling its annual petrochemical production capac-

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ity from the current 9.2 million tonnes to 23 million tonnes by 2020.

Qatar will be the consummate growth story for the next decade, lawyers say, with law firms looking to increase their presence in coming years.

The island kingdom of Bahrain was long hailed as the hub for business and finance in the Gulf. Without the glitz and glamour of Dubai, Bahrain sought a more serious financial standing with one of the highest numbers of both Islamic banks and international financial institutions in the region. International players, including big law firms, sought to make a presence in the country, which has had a historically strong relationship with Saudi Arabia.

Saudi Arabia shares one of its oilfields with Bahrain, providing around 70 percent of the budget revenue in a country of over 1.2 million people, including 660,000 foreigners. Last year, Riyadh and other Gulf countries promised Bahrain and Oman $10 billion each over 10 years for socio-economic spending to bolster their governments in the face of unrest.

A view of the skyline of Manama at night. REUTERS/Hamad I Mohammed

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ASIAN LEGAL BUSINESS AUGUST 2012

City view of Bahrain’s capital Manama is seen from Abraj Al Lulu. REUTERS/Hamad I Mohammed

But the onset of the financial crisis and the instability that ensued in the wake of the Arab Spring has cast Bahrain into a negative light. As media reports highlighted mounting violent protests and unrest in Bahrain’s financial centre, banks and corporations began to reconsider the viability of Bahrain’s business environment. In August 2011, Credit Agricole shifted the majority of its Bahrain-based staff to Dubai, while BNP Paribas moved back office operations from the island kingdom. In February this year, Societe Generale's private banking arm also confirmed plans to exit Bahrain to cut costs. Sources told Reuters in May that the Bank of Tokyo-Mitsubishi too plans to scale back its operations in Bahrain.

Law firms too have not been immune to these mounting concerns. Offshore law firm Appleby pulled out of Bahrain last year, citing the instability of the region as the reason. The firm continues “to monitor the region for the future,” says Peter Bubenzer, group chairman of the firm.

It has been a costly year for the country.

Bahrain’s 2011 gross domestic product growth fell to 2.2 percent from 4.5 percent in 2010. A study conducted by Bahrain’s Shura

Council, its parliament, and the Bahrain Chamber of Commerce and Industry earlier this year also indicated that businesses in Bahrain lost up to $800 million over the last year due to the unrest. According to a Reuters poll conducted in July, Bahrain is forecast to be the only Gulf country in the red in 2012, with a budget deficit of 2.0 percent of GDP. However, lawyers still say the opportunity for conducting business in Bahrain remains strong, although the nature of their practices have changed over the last three years. Before the financial crisis, Bahrain – like much of the region – was focused on building up its infrastructure. Real estate was king, and construction projects dominated much of the legal work in the country. But with the bursting of the global real estate bubble and the subsequent financial downturn, construction sites turned to ghost towns as funding dried up. For lawyers, vibrant real estate and construction practices suddenly gave way to an increased need for dispute resolution.

Trowers & Hamlins’ Bahrain partner Paula Boast told The Brief that dispute work used to make up only 10 percent of her practice in 2009, with 90 percent still focused on

project development. By 2011, dispute work made up 60 percent of her practice, with 40 percent dedicated to actual construction deals. Lawyers say the current legal environment has shifted notably towards litigation.

To that end, local law firms have a distinct advantage in handling court matters. Under Bahraini law, while international law firms can operate in Bahrain without a local partner, they can only represent claimants when accompanied by a Bahraini lawyer licensed before the Cassation Court.

The financial crisis has also created work for lawyers in the realm of restructuring and refinancing. Islamic investment bank Gulf Financial House was repeatedly forced into restructuring obligations in 2010, as the firm struggled with its debt burden in the aftermath of the global downturn. The company recently restructured $45 million in debt, the second time it has restructured that same facility.

In May this year, a unit of Bahrain investment house Arcapita filed for bankruptcy protection in the United States, becoming the first Gulf entity to file for Chapter 11 after it was threatened with legal action following its

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failure to repay a hedge fund in full. Arcapita’s legal advisers are Gibson Dunn & Crutcher and Linklaters. Clifford Chance is working with the creditor committee.

“There has been a significant amount of work out of the ashes of the financial crisis,” says one Bahrain-based lawyer. “Financial institutions have struggled, and have needed advisory work and structuring expertise to help them meet obligations. Things are not as dire as they were on that front, but there are still payments that need to be made. This is an area that will keep corporate departments (of law firms) busy for a while.”

Despite Bahrain’s challenges, legal experts say it is not without its strengths.

Infrastructure, for instance, has become the buzzword going forward as the government seeks to appease the masses with more social housing. Bahrain’s government has signed a $550 million public-private partnership (PPP) to build housing in the kingdom. The country has also committed $4.8 billion towards expansion of its international airport, $4.7 billion towards improving its roads and bridges, and $8 billion towards expanding its public transport networks, according to a report by Deloitte.

Such initiatives will require financing through loans and debt instruments. Bahrain issued a $1.5 billion, ten-year dollar bond in June. International law firms Allen & Overy and Baker & McKenzie, as well as local Bahraini firms Hassan Radhi and Associates and Qays H. Zu’bi Attorneys & Legal Consultants have advised on the deal.

Legal experts expect more corporate financing deals to come to market over the next few months.

REUTERS/Stephanie McGehee

The Gulf state of Kuwait has come under the spotlight in recent months as it struggles through its own political upheaval, which threatens its economic development in the region. Kuwait has seen eight governments come and go in just six years due to bickering between the parliament and the cabinet.

The last government resigned in June after Kuwait's constitutional court dissolved a parliament elected in February this year.

In a continuation of its political tug-of-war, Kuwait's ruler approved a new cabinet in July, which ushered back many of the old faces following the mass resignation in June. Analysts expect Kuwait's ruler to dissolve the parliament in order to allow a new election, widely expected to be held after the Muslim holy

month of Ramadan. The new cabinet should be sworn in before the reinstated parliament.

But such a move could prove difficult as the majority of the 50 elected-member assembly have said they are boycotting the reinstated parliament, which was tarnished by corruption allegations.

Such political manoeuverings are resulting in a lack of faith in the Kuwaiti market, which could hinder its economic growth, experts say. "Domestically, a negative outlook is inevitable where government spending remains dormant, tendering of new projects significantly lags, and asset values continue contracting as the local stock market considerably underperforms," National Bank of Kuwait (NBK) chief executive, Ibrahim

Dabdoub, said in July, according to a report in Reuters.

Kuwaiti lawyer Mohammed Al Noor at AlTwaijri & Partners (TLF) adds that the lack of political stability has already had an impact on the country’s development. “Decisionmaking needs political will, otherwise Kuwait cannot move forward,” he adds. “There isn’t much foreign investment because the law needs to be changed. The Foreign Direct Investment Law is in draft form, but it needs to be reviewed and passed by the parliament, and this is a long process.”

Major oil producer Kuwait is one of the most financially stable economies in the world, thanks to a high demand for its natural resources. But its weak regulatory

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MIDDLE EAST PROFILE

ASIAN LEGAL BUSINESS AUGUST 2012

“THERE HAVE ALWAYS BEEN A SMALL NUMBER OF INTERNATIONAL FIRMS BECAUSE OF THE WAY THE KUWAITI MARKET IS. THE LEGAL MARKET HERE DEPENDS A LOT ON WASTAS (PATRONAGE) AND WHO YOU KNOW AND THE OPPORTUNITIES YOU CAN GET.” ABDUL AZIZ AL-YAQOUT, DLA Piper

environment and outdated insolvency laws make it difficult for distressed companies to restructure, weakening the country’s business capabilities, according to the World Bank. Speaking at a forum in May, World Bank senior counsel Riz Mokal said Kuwait needs legislation that gives distressed but economically viable companies an opportunity to restructure. The Financial Stability Law brought in as a response to the financial crisis did not provide for this, according to a report by Reuters.

Kuwaiti firm Investment Dar, which partly owns British luxury car maker Aston Martin, secured a one billion dinar ($3.6 billion) debt deal with creditors in February 2011 as part of a contentious restructuring under Kuwait's Financial Stability Law. The Global Investment House is undergoing its second voluntary debt restructuring in three years.

Other laws are also in need of a revamp in order to make the Kuwaiti market more conducive for business, lawyers say. Kuwait is in the process of drafting a new commercial companies law in addition to laws for small and medium enterprises. Kuwait is also drafting an investment promotion authority law to reduce financial and logistical barriers for inbound and internal investment in the country. But legal experts say such legislation is taking a backseat to the country’s current political situation.

Tenders for large-scale projects, such as the Al Zour waste water project, have already been submitted, but are currently on hold as politics play out. Financing for many projects has also stalled with banks currently reluctant to lend, given a lacklustre legal environment and past credit defaults.

In such an uncertain market, it is a struggle for international law firms to conduct business. “There have always been a small number of international firms because of the way the Kuwaiti market is,” says Abdul Aziz Al-Yaqout, regional managing partner at DLA Piper. “The legal market here depends a lot on wastas (patronage) and who you know and the opportunities you can get.”

DLA Piper, SNR Denton and Curtis, MalletPrevost Colt & Mosle are the three main in-

ternational players with a presence in Kuwait.

Al Noor of TLF says that many international law firms have sought to downsize in Kuwait because it is a slow growth process. “They want results fast and move quickly if they don’t come. This is not the way this region works,” he says.

There is room for local lawyers to make a mark in Kuwait, but concerns remain in some cases that the standards in practice differ too greatly between local Kuwaiti firms and international players. Still, lawyers on the ground say there are prospects for growth within the capital market in the wake of the Capital Markets Law passed in 2010. Mergers and acquisitions and investment restructurings should provide more legal work in the months to come, says Al-Yaqout.

The Gulf Arab sultanate of Oman was cast into the spotlight last year as the Arab Spring turmoil ushered in a series of uprisings within the country, with citizens protesting a lack of employment opportunities to meet the needs of its fast-growing population. The IMF said in December that a 2010 census had put the unemployment rate among Omanis at 24.4 percent, although the high number may include many who are not truly looking for work. Omanis accounted for only 14 percent of nearly 1.3 million private sector employees in 2011.

The social unrest last year prompted Sultan Qaboos bin Said, a U.S. ally who has ruled Oman for 42 years, to pledge an extra $2.6 billion of spending in April 2011. Oman obtained pledges in March 2011 for $10 billion in aid over 10 years from its wealthier Gulf neighbours. The government forecasts a budget deficit of 1.2 billion rials for 2012, or 4.3 percent of 2011’s gross domestic product (GDP), which grew a real 5.5 percent last year.

Against this backdrop, the sultanate is attempting to draw more foreign investment within its borders to bolster its economy. Its initiatives are expected to create abundant opportunities for businesses and lawyers.

Oman joined the World Trade Organisation in 2000, and has since relaxed laws for foreign capital investment into the country from 51 percent to 30 percent. In addition, Oman is considered to be one of the more businessfriendly environments in the Gulf, including a free trade agreement with the U.S. and a modern business law framework.

Driving some of the activity is the sultanate’s focus on its industrial development.

Oman has one of the fastest growing power and water sectors in the Middle East region, with electricity and desalinated water demand expected to increase until 2017 at an average growth rate of about 9 percent per year, according to the Oman Power and Water Procurement Company. Solar power and renewable energy are areas of particular

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MIDDLE EAST PROFILE

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View of the Al Alam Royal Palace in Muscat. REUTERS/Benoit Tessier

focus for Oman.

“The greatest growth area in Oman is in infrastructure projects, in particular water and power,” says Bruce Palmer, partner at Curtis, Mallet-Prevost Colt & Mosle. “We are talking about large scale projects of over $1 billion.” Such projects will require a significant amount of financing, creating opportunities for banks and the legal community.

In addition to infrastructure projects, Islamic banking is also seen as a key growth area for the country, legal experts say. The Islamic finance market has grown to nearly $1 trillion globally, analysts estimate. But unlike neighbouring states such as the UAE and Iran, which have embraced the industry, Oman until last year remained stubbornly secular in its approach to finance. Its central

bank head said in 2007 that "banks should be universal”. Oman reversed its stance after seeing a steady trickle of investment money flow to nearby countries with well established Islamic banking sectors. The decision was also seen as one way of appeasing its population following the protests.

Following the edict allowing Islamic finance, the sultanate launched its first Islamic bank, Bank Nizwa, which attracted $681 million rials ($1.77 billion) in bids during its initial public offering. Bank Nizwa’s was the first IPO this year in Oman, with Trowers & Hamlins having advised on the deal. The country's market regulator has said it expects three to four new listings in 2012. Sharia-compliant lender Al Izz International Bank, Oman's second lender to be licensed for Islamic

operations, was expected to issue an IPO of 40 percent of its 100 million rials capital by June this year. However, the anticipated IPO has still not come to the market.

Legislation covering Islamic insurance, or takaful, along with sukuk is expected to be finalised by the end of the third quarter of the year, Capital Market Authority officials told Reuters in June. But the introduction of the regulatory framework may not produce a rapid surge of activity. Many institutions are still grappling with the need to obtain product expertise, arrange oversight by boards of Islamic scholars, train staff, and build computer systems. “The introduction of Islamic banking is great, but it will undoubtedly be slow to begin with to see how it goes,” Palmer says.

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Managing Partner Q&A

ASIAN LEGAL BUSINESS august 2012

Domest

Managing Partner Q&A

43

Defiant against pressure from competitors’ speedy expansions and bold overseas ventures, Jun He Law Offices continues to adhere to its strategy of being an independent China-focused practitioner - a principle that has led to its consistent success over the past two decades.

Managing partner Xiao Wei discusses his firm’s challenges with Liu Zhen, analyses market trends, and explains how Jun He is able to maintain an advantageous edge for tougher market share battles to come.

无惧来自竞争对手急剧规模化和国际化的压 力，君合始终坚持以中国法为核心竞争力的独 立发展道路。过去二十多年，这一原则引领君合 不断走向成功。而今，管理合伙人肖微律师与本 刊记者刘蓁讨论当前挑战，评点市场趋势，并详 解君合在即将来临的更激烈的竞争中得以保持 领先优势的秘诀。

优势在中国

ic focus REUTERS/Carlos Barria

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Managing Partner Q&A

ALB: What is your firm’s development strategy?

XW: There have been two big trends among China’s law firms. The first is that people are obsessed with size. Firms are trying to outsize one another. The second is that Chinese firms are going overseas.

Many have formed alliances with foreign firms, while some have even merged with one.

But for Jun He, simply speaking, we are first of all concentrating on the China market and PRC law services.

Our size is completely based on the needs of the clients and our practices. We will enlarge our network geographically, but it does not mean that we are opening offices across the country. We could just cooperate with local firms to build up a nationwide network.

It is very important for Jun He, a full-service law firm, to focus on developing the China market based on PRC law practices for a certain period of time. It is because: 1) We have accumulated a large base of international clients in the past who have huge inbound businesses; 2) As the domestic transactions of Chinese clients grow, we are having an increasing base after we strategically switched our client orientation to focus on domestics; and 3) The outbound business of Chinese clients is also growing.

However, for outbound business, we mostly carry this out by coordinating and cooperating with international firms to build a legal service platform overseas. There is not a single firm that can completely cover all the areas being invested in by Chinese capital, especially Africa and South Asia. As a result, we have to create an effective cooperative model to join forces with firms of the target countries.

ASIAN LEGAL BUSINESS august 2012

ALB: How is Jun He reacting to “size obsession” in the market?

XW: The current volume inflation of firms is like an arms race. It appears in different styles, some in M&As, some in franchising, and some in contracting.

The reason for this phenomenon, I think, is that Chinese firms lack experiences and cultural deposits, as the marketisation of China started some 30 years ago, and no firm has a history any longer than that.

Everything happened all at once when the Chinese economy quickly boomed, and the market suddenly exploded. For the particular time being, there are enormous opportunities. It is natural for the firms to have an impulse to grow large. It is indeed a significant change in the market.

Speaking of the firm’s size, I agree that a firm has to have a certain scale of size. But for Jun He, the reason we have our current size is because we have increasing areas of practice, which requires different types of professionals. Over the past years, we have made Jun He a full-service firm with a considerable range of practices, and a good coverage of key regions.

However, we keep our size growth under strict control. Our main concerns are the needs of practices and regional demands. Besides, we must also verify the competence and quality of each and every lawyer and partner while expanding. We also carefully calculate the profit per office, the revenue per partner, the profit per partner, and so on. We take everything into account before we make a decision on whether to scale up more. We are one of the more temperate and steady expanders among the law firms.

ALB: 请您概括一下君合的发展战略和思路？ XW: 我觉得国内律所现在有两个比较大的变化，第一个大家都 搞规模化，你规模大，我规模更大。第二个现在中国律师事务 所开始走国际化，有的在很多国家都搞了联盟事务所，甚至有 的直接和国外所合并。 但是君合的战略简单说来，第一步还是做好中国市场和中国法 的相关服务。 我们的规模是完全根据客户需求和业务需求来做。可能我们接 下来在地域上还需要发展更大的网络系统，但这并不意味着君 合要到全国各地和世界各地设很多的分所。我们可以和很多地 方律师事务所进行合作来建立网络。 我们现在做为一个全方位的法律服务事务所，总体上来讲，在 一个阶段内以中国法为基础，做好中国的市场是非常重要的。 因 为 第 一 ， 国 际 客 户 的 对 华 投 资有不少业务，我们过去有很 多 这 种 客 户 基 础 。 第 二 ， 中 国 客户本身在国内的交易也越来 越多。我们把调整战略面向中国国内客户，其规模也在不断发 展。第三，中国客户对外业务的法律服务需求也在增长。 我们在对外业务方面的做法是组织协调与各国事务所合作，建 立境外法律服务的平台。因为中国的投资涉及很多国家，没有 一家事务所可以真正的把这些地方全部覆盖。尤其在非洲、东 南亚很多地方。所以主要还是建立一些合作模式和选择联络及

组织各国律所的网络。 ALB: 在规模化发展的市场潮流中，君合 的选择是？ XW: 现在大家搞规模化，有点规模竞 赛的意思。而且方式也不太一样，有的 用合并、并购的方式，有的用连锁、合 同的方式。这是因为中国的市场经济主 要是这二三十年才全面发展，律师事务 所的运作也是这二三十年的事。所以没 有过去的历史经验，也没有这种文化， ，赶上这样的经济高速发展期，机遇很 多，自然带来不少规模冲动，我觉得这 是市场的一个大变化。 对于规模化，我觉得律所有必要具有一 定规模。因为现在业务的内容是越来 越丰富，对于各方面的专业人员都有要 求。我们这些年把君合做成了一个全方 位商业法律服务的事务所，这需要有相 当的团队和覆盖面，所以我们的规模是 在增长的。另外我们也在一些重点的地 域适当的做了一些覆盖，开设分所，形 成规模和网络。

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Managing Partner Q&A

We do not accept any sort of “franchises” or any big team mergers, despite many firms that have proposed these to us. We have been carefully selecting high quality small teams to join us over the entire history of our firm. We never take over a whole firm. Through this, we are able to maintain the high quality of our services and personnel while growing.

ALB: What are your international development plans?

XW: Chinese firms are going global, like King & Wood Mallesons, and many of those are operating overseas with affiliating firms. However, we have our own opinion. We have no objection against other people’s approaches, but we believe that the genuine advantage of Chinese firms lies in PRC law services.

Jun He has an office in Hong Kong. We opened another one in New York as early as 1993. We also have a patent office in Silicon Valley.

While running these offices, we have tasted the reality of a Chinese firm operating on different soil. The Chinese firms have no advantage when it comes to services relating to U.S., UK, Hong Kong or other countries’ laws. It is because we are not native language speakers, we are strangers to the culture, and PRC law is not commonly used worldwide. Moreover, Chinese clients are not yet quite world class.

Although we have participated in many overseas projects of Chinese clients, the amount of their demands are not big enough to support a Chinese firm to turn fully international.

Where Chinese firms can perform is the area of PRC law. Jun He has grown into the leading counsel of plenty of cross border transactions, but it is not enough to become an international firm. One can open in many countries with many teams, but one cannot maintain them without a strong client base. Realistically, Chinese firms are not developed

但是我们的规模是非常有控制的，在扩 大规模时候必须要保证每个律师、每个 合伙人专业的能力和素质。另外我们要 还考虑律师费的收益，合伙人的平均创 收，合伙人综合利润率等等。所有这些 中国要做平衡，然后决定是不是再应该 扩大规模。虽然我们的规模在发展，但 是在律师界里，我们属于一个相对比较 严格控制的，比较稳扎稳打的事务所。 虽然找我们谈加盟的各地事务所很多， 但是我们一律不接受任何加盟。我们也 不做大团队的吸收。君合发展二三十年 的历史，都是采用的精挑细选的、高质 量小团队的加盟，没有采用并购或其他 方式吸收整个事务所。这是我们在进行 规模扩大的同时，对业务质量、人员素 质方面进行的一个控制。 ALB: 君合对国际化发展的思路？ X W: 现 在 中 国 律 师 事 务 所 开 始 走 国 际 化，比如金杜，还有些以联盟的方式在 国外发展。但是我们的看法不太一样。 我们不反对别人怎么走，但是我们觉得

作为中国的律师事务所，第一位优势还是在于中国法为主的法 律服务。 我们在香港有分所，我们在纽约于1993年就有分所了。后来 在硅谷也开设了分所主要从事专利法律事务。但是也正是从这 些事务所的设置中，我们真正体验到中国律师事务所在其它国 家的实际意义。如果涉及到美国法、英国法、香港法或者不同 其它国家的法律服务，显然中国律所不占优势。第一个原因是 语 言 ， 我 们的人员很多英语是不错的，但是比起人家母语并 不占优势。第二个我们在当地文化上也不占优势。第三个中国 法也不是一个普遍适用的法律。另外中国客户目前也达不到全 球客户的程度。虽然我们现在也参与不少中国客户境外投资项 目，但是这种需求还不可能支撑起一家中国律所转换成为一家 国际所。 中国律所起到的最大作用的地方还是中国法及为中国公司组建 协 调 境 外 交易的法律服务平台和服务团队。随着君合不断发 展，我们现在在很多跨境交易中已经起着主导顾问的作用，但 是只靠这些还不足以成为一个国际性的律师事务所。你可以到 各个国家设很多分所，然后建立很多团队。但是要建非常强的 海外团队，一定要非常好的客户基础。以中国事务所现在的综 合能力去吸引其它国家的客户是不太现实的，人家也不太可能 找中国事务所做主顾问。而如果光靠中国客户境外投资业务的 收费还养活不了强大的国际化律师团队。

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Managing Partner Q&A

enough to build a major foreign client pool, while the foreign clients are not likely to hire a Chinese firm as leading counsel. And the revenue from the Chinese clients could not afford to sustain a strong team.

Frankly speaking, those overseas offices are mainly windows for us, they cannot provide substantive legal services. Of course, one can also choose to become a part of an international firm, which is another approach. But we will basically continue to adhere to our strategy of being an independent Chinese firm.

Meanwhile, we are also working on internationalisation, but not by opening up everywhere or merging with someone else. We will build our own team, have a better and closer cooperation with foreign firms, and construct an international service platform with detailed rules and operational manners to provide high standard legal services to Chinese clients. Thanks to increasing business, we have, in fact, come up with plenty of experiences about it.

ASIAN LEGAL BUSINESS august 2012

Chinese economy, we know the PRC law, and there are needs for PRC law practices, including those of foreign clients. However, when you become a part of an international firm, you will lose most of your previous business partners. What you receive is less than what you lose - this is the problem of a merger.

Our firm has established close relationships with numerous firms in many countries. There are a number of cases that come through

ALB: So for now, Jun He is not going to merge with any international firm, correct?

XW: There have been a great number of firms from other countries and Hong Kong that have contacted us, showing their interest of a possible merger. But at the moment, we would prefer to improve our own business.

This is due to many reasons. The first is that we do not intend to become an international firm. The second is that even if we are to become an international firm, it is not likely we can have control of the process. We might have the client base, but we do not have the advantage in those businesses. Our real advantage is that we are in China, we have the

这些海外分所目前实际上起到是一个窗口和辅助性的提供当地 法律服务的作用。当然，中国所也逐渐地为一些中国公司中小 规模的交易提供香港法和外国法律服务，但这还不具备提供全 面、复杂、大规模境外法律服务的能力。当然，你也可以选择 跟其它国际所合并，甚至你变成国际所的一部分。这个是另外 的思路和道路选择。而我们选择保持作为中国独立所的定位和 战略。 国际化我们也是要做的，但我们国际化不是建立在到处设分所 或者跟国际 事 务 所 合 并的 基 础 上 ， 而 是 我 们 建 立 起 自己的团 队，然后跟包括国际所和各国独立律师事务所建立起更好更紧 密的工作关系。我们要建立一个国际法律服务平台，包括具体 的规则和操作方法，这样来给中国客户提供境外法律服务。而 最近这种法律服务需求越来越多，我们现在摸索出了不少经验 和体会。 ALB: 所以君合暂时不会也跟外国事务所进行合并？ XW: 和我们接触，表示合并意愿的外国所和香港所很多。但目 前来讲我们还需要先做好自己的事情。 原因有很多方面的。第一我们没想做国际所。第二个即使是做 国际所，国际化的过程当中不可能以你为主来做的。因为就算 你有些客户的基础，但是真正做这些事情的优势并不是你的， 你的优势是因为你在中国，有中国法，有中国经济,有一些中 国客户。 有 中 国 的 法 律 需 求 ， 包 括 其 他 国 家 对 中 国 的 法律需

求。但是你变成哪个国际所一部分的时 候，你就会丢掉很多你的合作伙伴。你 可能从一个事务所得到的东西，包括客 户，比你失去的东西少，这就是问题。 我们事务所多年已经与很多国家不同的 事务所建立了很多协作的关系。每年都 会有不少业务来自于很多国家的事务所

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referrals from those firms every year. We cannot become stuck on one at the cost of losing all the others. In particular, when a partner is a top U.S. or Magic Circle firm, it is more trouble. It is like once you marry someone, you can no longer keep long-time relationships with others. They are rivals to each other. As a result, we have decided to choose a way of independent development.

Managing Partner Q&A

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is competition going to be like in the future? What are Jun He’s advantages?

XW: Outbound investment work used to be dominated by foreign firms, but now Chinese firms are taking over a growing share. In the future, I think it would be like the split of the inbound market.

The largest issues in the outbound business are the high cost of communications between the Chinese clients and their foreign counterparts, and the need for a China hand who knows the Chinese way of doing things and Chinese culture to help out.

ALB: As outbound business increases, what For instance, when a Chinese client has such a case, he might turn to an international firm in the past, since he believed it had wider coverage and stronger professional skills. However, Chinese clients are now realising that international firms also have plenty of uncovered areas and that their frontline teams consisting of Chinese lawyers with foreign qualifications, is so small that much more work needs to be covered by back office forces. And there are always problems in the process of coordination between the frontline and the back office with high cost and low efficiency.

In fact, Chinese firms can do most of these things, and we can do them better. We have easier communication with the clients, we understand their needs. We can provide a larger and full-service practice team and help our clients to choose foreign firms to work with. Once our experience grows, Chinese clients would find that we can totally handle it, and then they would like to choose us eventually. A Chinese firm would take the lead in the cooperation with foreign firms. Such a tendency has become obvious.

下，将来国内外律所之间市场竞争的格局会发展成什么样的局 面，君合又将怎样发挥自身的优势？ XW: 原来这个领域里主要是外国所在做，但是现在越来越多的 份额进入到了中国所手中。将来趋势上中国所的份额会加大。 因为中国律师容易沟通，费用也低。 比如中国客户有相关的业务，他可能原来找国际所，因为他认 为国际所会有很大的覆盖范围，有更强的业务能力，但是随着 时间、业务的发展，很多中国公司反映:第一，其实国际所在 很多地方也是没有覆盖的。第二，这些国际所在中国的前台出 面的许多都是有外国律师资格的中国人。但是前台团队是不够 强大，很多的事情要靠他们后台即在其它国家的办公室来做。 但是他们前台、后台的协调成本高,效率并不很好。 REUTERS/Miro Kuzmanovic

的推荐。不能只和一家做，把其他都丢 掉，特别是如果对方是英美大所，就很 麻烦了。你跟一个人成了婚姻关系了， 其他人没法跟你保持这种长期的协作关 系，他们之间可能都是竞争者。所以我 们决定选择独立发展的道路。 ALB:

在现在海外业务越来越多的状况

而很多的事情实际上中国所都可以做，而且可以做得更好。因 为中国所和客户的沟通很方便，中国所更了解中国客户需求什 么。然后中国所可以与客户一起选择外国的事务所而组成团队 工作，并负责组织协调。一旦业绩上来，经验上来，中国客户 ，就会逐渐更多选择中国事务所。现在这个趋势已经显现出来 了。 但是具备这样的能力的中国所目前是比较有限的，因为这个需 要长时间积累。我们过去在中国所中国际业务的能力是最强的 之一，今后我们还要继续保持这一个能力。而像金杜采用了和 国际所合并的这种方式。也是另外一种模式，他们在这方面也

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However, Chinese firms capable of this are limited since it takes a long time to gain international experience. Jun He is one of the strongest Chinese firms in terms of international practices. We will keep this advantage in the future. We’ve seen King & Wood choose to merge with Mallesons, which is another approach, and they have their advantages too. But I think we can also build our abilities in our own way.

Jun He has previously done a lot of inbound work. Now we also have many outbound practitioners. Our front line abilities are more comprehensive than most of the international firms. We can do many substantive practices better, including communicating with Chinese clients, organising the foreign participating firms, carrying out negotiations, and drafting bilingual contracts, etc. Plus our price is more reasonable. Since foreign firms charge at least a third or half higher than us, Chinese firms have a significant advantage over the competition. Chinese clients have been positively trying out our services over the past year, and gradually we have become the lead counsel in many cases. We have quite an advantage.

ALB: What do you require from your lawyers? What incentives do you offer?

XW: Our demands from the talent are: Chinese lawyers developed by ourselves who know China and PRC law very well, and speak foreign languages too; Chinese lawyers who used to work for international firms, and foreign or Hong Kong lawyers. With such a mixture of talent, we can build an organic team.

Historically, we made a few adjustments to our standards. In the beginning, we targeted school graduates and local talent with strong professional skills. Then we imported returning lawyers from overseas.

Now on one hand, we develop our own youngsters, while on the other

ASIAN LEGAL BUSINESS august 2012

hand, we attract both domestic and foreign talent with international expertise from top Chinese and international firms to join us.

We arrange our talent programme according to actual practices. The standards and needs of talent vary from practice to practice. For example, a domestic capital market lawyer need not be an international expert, but we surely must have people specialised in U.S. or Hong Kong IPOs. Hence, we have specialised requirements according to particular sectors and practice areas, and we do not just rely on one or two people. We group together complementary people for teamwork.

We have been constantly working on the improvement of our distribution and incentive system, but generally we are doing well by making use of our human resources.

ALB: What challenges do you face as a managing partner?

XW: I actually face all sorts of psychological pressures and challenges. For example, all the firms are trying to expand in size now.

For Chinese clients, size is a significant factor in selecting a law firm. They think the bigger a law firm is, the better it will be. So this mentality brings tremendous pressure on us,

会有他们的优势。我们选择了走另外的道路，来把自己的能力 培养和建立起来。 过去君合做了很多境外对华业务，这方面的人才也很多。所以 我们的整体团队的工作能力，比国际所在中国的团队更全面。 而且我们很多实质内容都可以做，包括与中国客户的沟通，对 外国合作事务所的组织，另外很多谈判，合同文件，中英文双 语化的问题中国所能做得更好。费用也更有竞争力些。因为境 外的律师收费比中国所费用价格至少多三分之一到一半。所以 在这方面中国所还是有很大的空间和竞争优势的，现在中国的 客户也在积极尝试请中国所来做这种业务，我们这一年多很多 业务先是由我们来参与，后来变成了由我们主导来做。 ALB:君合的人才的需求和激励措施是什么样的？ XW:现在我们对人才的需求大概有这么几类：第一个是自己培 养起来的国内律师。他们对中国很了解，法律也很熟悉。而且 外语能力也很强。第二是过去在国际所、外国所工作过的中国 律师或者顾问。第三还有英美或者香港的律师。这样的团队人 才组合，成为一个有机的一体。 我们在历史上引进人才的时候经过几次定位调整。早期的时候 是 定 位 在 专 业 能 力 比 较 强 的 本 地的人才。第二次定位我们开 始从国外引进海归人才。现在我们的定位，除了自己培养，还 有吸收国际国内的很多领先律所的具有国际化业务能力各种人 才。

我们人才的需求是根据我们的业务板块 来安排的。不同的方面需要不同的人 才，不同板块标准是不一样的，比如说 做国内的资本市场的人不一定要有很强 的国际能力。但是我们资本市场的人里 面有些人是专门涉及到美国或者香港上 市的人才.我们每个不同的业务板块、业 务领域，靠一两个人是不行的，它需要 一个互补组成一个团队来工作。 我们内部的分配机制和激励机制，也是 我们这些年都不断在调整和改进的问 题。但总体上我们目前的人才消化得还 是比较好的。 ALB: 作为管理合伙人您面临的主要挑战 是哪些？ XW:我 们 实 际 上 面 临 着 心 理 各 种 压 力 和 挑战。例如现在各个事务所都在做大 规模。而对于中国的客户，律所规模是 起相当大的心理影响作用。以为大就是 好。这会对我们产生相当大的来自圈外 圈内的压力。关键在于我们是不是真正 能够不为所动，坚持按照我们自己的理 念来做事。我们觉得这个压力对我们内

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both from within and outside the industry. The key is whether or not we can keep our peace of mind, and uphold our principles of doing things. I feel this pressure has a bearing on our internal governance too. Oftentimes, some partners would suspect that we have fallen behind other firms in expanding, so we often have to “unify and stablise our thoughts” in this regard within the firm.

Secondly, the recent merger between King & Wood and Mallesons has been a hot topic in the international market. We have not made such a move, and thus have not been a “hot topic”. This will have a certain impact on us for some time.

部也有影响。时常有些合伙人觉得我们 是不是在这方面落后了。所以我们内部 经常要把这个思想统一好，稳定好。 第二个在国际上，最近金杜和万盛合 并，成为了关注的热点话题。而我们没 有这样的举措，会显得不是热点。这样 也会在一个时间内产生一些冲击力。 但是作为具体业务上来讲，这是一个长 期的任务，我们需要真正把自己的队伍

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However, when it comes to concrete cases and practices, the longterm task for us is to build better legal teams and a strong leadership.

Another big problem is payment. The legal industry in China is still at a messy stage. In general, Chinese clients are not used to paying high prices for legal advisers. If we do not charge legal fees sufficiently high, it will affect our assembly of a strong legal teams and recruiting talent.

But on the other hand, it will be more difficult for us to get business if we charge high fees. This is a major challenge for us.

ALB: Are there any other challenges in operation and management?

XW: We are one firm and one profit pool, which is different from those franchise firms. We adhere to the principle that all our offices are one firm with the same system and base. It has always been our advantage.

At the moment, our problem is that we need a better combination and distribution of the firm’s resources as a whole, particularly including

建设好，把业务市场和专业服务水平建设好。 还有一个大问题就是收费，中国的法律市场很乱，收费总体比 较难。费用太低的话事务所的团队和人员建设是受影响的，但 是要收比较高的费用拿项目又比较困难，这方面也是比较大的 挑战。 ALB: 君合在经营管理方面需要解决的其他挑战？ XW:我们首先是一个企业，统一核算，所以我们跟连锁加盟制 经营的律所不一样。我们一直坚持这一点，我们所有的分所都

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the development of new joiners to strengthen our workforce. The number one challenge we are facing is how to build this platform well to benefit the group function.

For one thing, our partners in fact have different levels of capabilities, which should be represented correctly. Otherwise, those better ones would lose their motivations. Another thing is that we should have a constant incentive. If the capable ones and the young people have enough room to develop and deliver to gain recognition, the firm would also lose its driving force.

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need to work hard, but also live a healthy and harmonious life. Therefore, when it comes to the expansion of the firm, we are active but not aggressive and reckless.

There is another thing we need to consider - that there are many people who have made a great contribution to us, and have now come to the age of retirement. It is a natural process of time and we have to settle them in a fitting manner. We have reasonable packages for different retirement ages to provide them a guarantee while not causing a heavy burden to the firm. We have to create a virtuous cycle of human resources in which the elderly have proper retirement settlement when new blood is constantly filled in.

Many people want quick and easy success today. They hope to make leaps forward in some aspects of life within a short period of time. We, at Jun He, have stuck to our own principles when it comes to growing the company. We applaud other firms’ rapid growth, but we will not follow them blindly.

We have always been in a prudent, active, and relatively harmonious state. We do not employ gimmicks or resort to media hype. We keep a low profile, but we do not do so for the sake of doing so. Our daily job is to do things well, and take every step in a firm manner.

Chinese firms, as I said, have little history, so we have to adjust ourselves throughout development. In a compressed period of time, we will be facing all the problems that the Western firms have experienced over the past century.

After more than 20 years of growth, we have cultivated a tradition, a kind of cultural atmosphere, and a set of habitual ways in the company.

ALB: How has Jun He built its corporate culture in this process?

XW: We have always attached great importance to corporate culture.

We have always emphasised unity and integrity of the firm. We expect our employees to be aware of the firm’s long history and of the larger issues facing society, and thus our corporate responsibility. We expect them to be clear that Jun He is not a firm owned by a certain individual or by a small group of individuals. It is a long-term cause.

We also want our employees to balance their life and work, making it a long-term cause for them personally too. The firm means a job and a career for them. It is also a foundation for their life and work. They

Our partners have a consensus on the firm’s general direction. When a new lawyer joins Jun He, he or she may have a unique personality or style. But over time, the new recruits incorporate our tradition and culture into their ways of doing things. We are a firm that consciously cultivates a corporate culture, and has its eyes on wider society too. We want our tradition to get passed on for more than a hundred years and even longer. That

是一个统一的平台，所有的体系都是一个整体。这个基础是比 较好的。

新鲜血液进来，资深的人也要有一个出 口和一个休息的安排。

但是我们现在问题在哪呢？我们需要更好的组合和配置全所的 整体资源，包括特别要发展新来的这些人员，把我们的力量全 方位的加强。所以我们面临的第一个问题，就是我们要打造好 这个平台， 是 它 更 有 利于 整 体 工 作 。 这 对 我 们 来 讲 是一个挑 战。

因为中国事务所没有历史积淀，它在发 展过程中要不断调整。我们在一个发展 过程中，从无到有，从小到大，从弱到 强，就会在短时间内遇到西方国家一两 百年历史上遇到各种各样的问题，要不 断调整。

挑战的原因，第一个因为我们的合伙人实际上能力的大小是有 差异性的。这个差异性需要能够合理的反映出来。如果什么都 是一样的话，真正对于工作好的人，激励作用就会降低。 第二个要考虑是我们要有一个持续激励，如果不能让能力强的 人，包括年轻人空间得到相对的合理的认可和发挥，事务所就 会缺少一个持续的动力。 还有另外一个方面我们也要调整。事务所毕竟有很多人做了很 多历史贡献，在一个时代里面总是有后浪推前浪，但是我们对 前浪也是要有所安排。我们建立了我们的退休体系，不同的时 候退休，我们也有保证和照顾，也不给事务所造成大的负担。 因为你必须让人才形成一个循环，形成一个良性循环，不但有

ALB: 君合在这种过程当中对企业文化建 设做了哪些努力？ X W: 我 们 所 对 企 业 文 化 一 直 比 较 重 视 的。我们一直是强调整体性，强调事务 所的人文的发展，强调事务所长期发展 战略。不是某一个个人或某一部分人的 事务所，它是一个长远的事业。也强调 了工作与生活的一个平衡来发展。事务 所是一个工作和事业，但也是事务所人 员的工作和生活的一个基础平台。要 积极努力工作，也要自然和谐的生活。

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is why we do not think from the perspective of one generation or even for a time range of only three or five years. We think long term.

ALB: Of the achievements Jun He has made in its 23 years of history, can you list some that you are especially proud of?

XW: First of all, Jun He is among the first law

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firms that was set up during post-reform China. We have 23 years of history now. We were already an industry leader when we were very small. Now we are still a top firm leading in many areas, and this is reflected by consensus in the industry.

Second, we have always taken a prudent approach to expanding the firm. The partners and the legal teams as a whole have been quite stable over the years. We have adapted to the market changes well,

REUTERS/Reuters Staff

在事务所发展上，总体我们是积极进取 的，但又不去冒进。 在现在中国法律服务市场比较浮躁，许 多所希望在短期内大跃进。我们则坚持 按照我们自己的理念来发展，别人发展 很快我们为别人喝彩，但是我们不能应

该完全盲目的去跟风。我们一直追求一个稳健、积极，而且相 对比较和谐的状态。我们不去制造一些噱头，也不太采用造势 的方式。但我们”低调”也不是刻意的。我们每天做的工作就是 踏踏实实把事情做好，一步一步去做就是了。 我们20多年的发展，延续下来的理念，已经形成一个文化氛围 和习惯。我们的合伙人在大的方向上也有共识。我们每个新人

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ASIAN LEGAL BUSINESS august 2012

REUTERS/David Gray

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and have avoided big fluctuations.

Third, we are better than most Chinese firms in terms of the overall quality of our legal teams, and the variety of the cases they take.

Fourth, we have made many strategic reforms over the course of our history, and all of them have been successful. We used to focus on foreign direct investment cases in China. In recent years, we have made sweeping adjustments in our choice of key clients and types of cases. In addition to international clients, we now attach great importance to domestic clients too. In this area we were a latecomer compared to those firms that have been working on domestic clients from the very beginning. Thanks to our good reputation that more and more companies are seeing Jun He as an important choice when they are concluding major deals. Particularly noteworthy are overseas investment matters by Chinese companies. Our advantages in these transactions are quick to demonstrate themselves.

There might be many firms scrambling for ordinary deals, but when it comes to highend ones, Jun He is especially well received and well recognised by companies, whether we get the legal business in the end or not.

ALB: Which areas will Jun He focus on as it plans growth for the future?

XW: We have lost many of our advantages in some areas, so we have a new strategic preference now. We continue to take some routine

进来，虽然每个人风格个性不一样，但是发展过程中基本上的 思想理念的东西或者说这种文化的基础东西还是共通的。我们 比较强调人文的事务所，希望能够传承百年甚至更长时间，所 以不是从三五年来考虑，我们是从长远来考虑。 ALB: 君合二十多年来的发展中特别自豪的成果是？ XW:首先我们在中国事务所里面成立的是最早的一批。已经有 23年。从一开始还很小的时候就是比较好的，到现在还是律师 界领先的律所之一，在律师界比较认可。 第二，我们所一直比较稳健的方式来发展，包括合伙人、整个 团队、跟着市场上的节奏，一直保持平稳，没有大起大落。 第三，我们团队整体的配置和业务的质量在国内的事务所当中 是比较整齐的。 第四，这些年来我们也做了很多大的战略调整，都比较成功。 我们过去做跨国公司对华投资比较多。但是这些年我们把客户 群和业务领域做了全方位调整。除了国际客户以外，也重视国 内客户。虽然不像过去专门做国内客户的所开始那么早，但因 为我们的业务质量口碑好，越来越多的客户在遇到比较重大的 业务时，把君合视为重要的选择之一。尤其现在做对外投资， 我们的竞争优势就出来了。可能一般的业务很多人去竞争，但

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business in the domestic market, such as A-share IPO transactions, but we do not actively seek this business because the market is very competitive. We must have a balanced structure in the businesses we involve ourselves in.

There are other sectors that we want to get a better hand at. We have made satisfying progress in the financial sectors in the last couple of years. We have also made efforts to get more international business.

We have paid more attention to appeals in anti-monopoly cases, and have made some progress in that regard too. As you know, it is always challenging to take up litigation in China. We have tried to become more professional in litigation. Arbitration, especially overseas arbitration, is another area that we have worked on improving, with some positive results. Intellectual property is gaining weight in our overall operations as the global protection of IPRs has become crucial for many companies. Therefore, we have made recruiting talent specializing in IPRs protection a priority.

ALB: Will Jun He open more offices nationwide?

XW: We have branches in several coastal cities now. China is one jurisdiction, and our teams belong to an integral entity, not individually contained in a certain city. Moreover, you can only be efficient when you mobilise the resources of the entire firm. We are having more and more coordination and collaboration among our branches. The fact that office work is increasingly becoming electronic has helped us achieve the timely assignment of tasks across the country.

Having said that, we aim to have more cooperation among offices in certain regions. We need more Chinese companies as clients. We cannot be content with having the big central SOEs that we have now.

We should win clients from among local SOEs and private enterprises too. The more, the better.

ALB: How much do international businesses occupy Jun He’s overall operation?

是高端业务，对我们的评价和认可都是 相当高的。 ALB: 哪些业务领域将是君合将来的发展 重点？ XW:在 有 些 领 域 里 我 们 很 早 就 不 太 占 优 势了，我们也有一个战略取向。国内一 些日常业务，比如A股的IPO，因为它市 场比较难做，我们每年都做一些，但并 不在这方面刻意去追求它。因为我们要 平衡我们所有业务的结构。 对于有些板块，我们要再加强。我们这 两年金融板块加强不错的。另外对外业 务这也是我们不断加强的。反垄断业务 我们前两年就开始加强，现在已经取得 不少的效果。因为做中国诉讼比较难， 我们在这方面业务就强调专业化的优 势，还有仲裁，包括境外仲裁下了不少 工夫，现在也是取得一些进展。还有知 识产权保护也是我们一个重点。因为现 在很多企业，尤其是全球性企业的知识

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XW: Inbound business used to account for a huge part of our operation. At its highest, 70 to 80 percent of our businesses was dedicated to inbound. This was especially the case in the period between China’s accession into the WTO in 2001 and 2005. Now the percentage has gone down with one of the reasons being a lower number of transactions after the global financial crisis. Meanwhile, we have also been serving more Chinese companies. Today we have a roughly equal number of international and domestic clients, but more than half of our revenue continues to come from international clients.

As to our hopes for the future, I think we have to build on what we have achieved so far - to deepen and consolidate our current practices in international businesses. We should also strengthen our legal teams, and deliver better services to clients. We need to maintain our competitiveness, and achieve stable and sustainable growth in the face of ever-changing industry trends.

In addition, we are making overseas business a strategic priority. First of all, the robust growth in market demand for our legal services has indeed been beyond our imagination. International legal counsel has become a routine business of ours. Chinese companies are set to become more and more global with many of them going overseas. We are determined to build up a leading edge in this area.

ALB: Who are Jun He’s major competitors and what are your advantages over them?

XW: The most obvious rival remains King & Wood, because of its sheer size, and the push it gets from its recent merger with Mallesons. In fact, we have different competitors in different fields. For example, our main competitors in the A-share business include Commerce & Finance and Haiwen & Partners. We compete with Fangda in the area of private equity. Dacheng and JT&N pose challenges to us for some domestic business. However, overall the big rival is King & Wood Mallesons.

Our competitiveness lies in our good relations with a large pool of long-term clients. We have served many multinationals in their China-related deals over the past 20 years, and we have success-

产权业务是一个重要业务。所以我们把 知识产权业务，特别知识产权保护方面 作为一个重点。 ALB: 那么地域方面接下来的布局会有调 整吗？ XW:我 们 沿 海 几 个 城 市 都 有 了 分 所 。 但 业务团队都是一个整体，不是局限哪个 城市里的。而且你必须要把全所的业务 资源能力用上才能够真正发挥效率。我 们将来还将于很多区域进行某种方式合 作，我们要有更多中国客户。现在这些 大国企还不够，我们要有地方国企和民 企，越来越多才行。 ALB: 君合目前的对外业务能够占到多大 比重？ XW: 外资在中国的投资与经营方面的 业务在君合业务中的比重过去一直挺大

fully cultivated and maintained great relations with them. We are among the few Chinese law firms that are very experienced in serving international clients. We have not done what King & Wood has done – merging with a foreign firm, but we have enhanced our capability to handle international cases, and improve our international legal teams through other means. Our achievement in this regard does not pale

的，我们过去曾经最高的时候占百分之七八十，尤其是WTO 以后到2005年前后那几年。，现在降下来了，是全球的金融 危机造成交易少多了，二是自己我们也调整了中国企业的比例 和客户。现在国内客户和国际客户数量可能各占到一半，但是 国际客户的收入还是占我们的一半多。 将来的海外业务，我们是要在现有基础上深化和扎实，把团队 做好，业绩做得更好，业务做也得更好些。保持相对的竞争优 势。 另外我们近期的重点战略就是要特别加强海外业务。这方面的 需求增长速度确实超乎我们的想象，成为了常态业务。将来中 国企业面临着一个全球化的问题，可能很多企业都往外去，我 们要先把这个优势做起来。 ALB:君合主要的竞争对手是哪些呢？自己的优势在什么方面？ XW: 竞争对手最明显的还是金杜。因为金杜的规模化，还有和 万盛合并的影响。实际上在不同领域里我们也有有不同的竞争 对手。比如A股有A股的竞争对手，比如通商、海问。PE领域

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number of truly all-round law firms like us is small. Perhaps, some people only know about Jun He’s non-litigation businesses. Actually, we win prominent litigation cases for our clients too. For example, we have represented Danone and Michael Jordan in their China-related lawsuits.

REUTERS/Jianan Yu

In addition, we have a good record with anti-monopoly cases. We have also actively taken part in China’s legislation process, and offered advice to the government in the creation of public and industry policies.

We have good working relations with the government at several levels.

Thirdly, our legal teams are extremely professional with a strong capability to operate in the international market, and have accumulated rich experience in all kinds of cases over the years. This has been demonstrated repeatedly by the major deals concluded by Chinese companies in which we played crucial and well-recognised facilitating roles. We are capable of taking up big cases and deals both within and outside China.

in front of what King & Wood has achieved.

Our competitiveness also comes from the fact that we are a real full-service firm. Those firms which rely too much on a specific kind of business will be greatly impacted by market fluctuations. We are much more balanced, and can stand market changes. In China, the

跟方达。有些国内的业务就会碰到大成、金诚同达，但最集中 的可能还是金杜。 我觉得我们在竞争中的优势，首先是原来对华业务中的客户基 础。很多跨国公司在中国的业务，过去20年这个客户基础一直 持续得比较好。我们本来在中国事务所里，是和境外打交道比 较强的事务所，我们没有像金杜那样跟国际所搞合并，但是我 们可以通过不同的方式让我们这些国际化的能力和素质整体上 的团队水平殊途同归，也是毫不逊色的。 第二个是 我 们 是 真 正 的 全 业 务 事 务 所 。 如 果 过 分 依 赖个别业 务，一旦市场出现变化也会受比较大的影响。我们是全业务， 整个的平衡方面就比较好。能做到这种全业务的事务所目前也 是比较有限的。可能大家只知道君合的非诉业务，但实际上我 们的诉讼业务每年也都比较有影响，比如说达能，以及我们代 表乔丹。另外，我们反垄断的业务，包括参与立法，包括他们 政策的制订，和其它相关政策审批我们都有比较好的政府关系 的基础。

Last but not least, in the past 20 years, Jun He has had a great advantage in handling foreign direct investment cases and international M&As in China. Now we are also becoming better and better at helping Chinese companies in their overseas M&As or construction contracts.

We are also gaining substantial experiences in areas ranging from antimonopoly law, the listing of foreign companies on the international board of the Chinese stock market, and banking and finance markets to intellectual property, labour law, and taxation law.

ALB: What is Jun He’s strategic goal in the next couple of years?

XW: We have two strategic goals. The first one is internal adjustment.

We plan to optimise the utilisation of resources and platforms within the company so that they can further help our overall growth. Second, we will introduce more creative ways to attract talent and build even better legal teams with an internaitonal service platform. This is about laying a more solid foundation, after the completion of which many things will come naturally, and the firm can achieve healthy growth. Without a solid foundation, you will be restrained by this or that problem in every subsequent move you make.

第三个对于中国客户的重大案子我们的竞争力还是不错的。什 么原因呢？我们的专业性，包括跟国际打交道能力和过去的基 础都很强，所以无论是境内境外的交易，我们的参与能力都比 较强。 另外，过去二十年君合在外资及并购有明显优势，现在又在境 外并购及工程，反垄断，外国公司在中国国际板上市，银行金 融业务，知识产权保护，风险及股权投资，劳动法，税法等方 面有综合优势。 ALB: 君合接下来一两年内的战略目标是什么？ XW: 我们现在战略目标两个方面。一是内部调整，我们要把 内部的资源和平台调整到更利于我们整体上的发展。第二刚才 讲到我们境外法律服务平台的定位和结构搭建，要做的更有创 意。 这些都是基础方面，基础方面做上去了以后，很多东西就可以 水到渠成，良性运转。如果这些基础东西搭建不好，你后面的 东西每次做起来都是捉襟见肘。

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INDIA’S

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HOUR

“THERE IS NO POINT BLAMING THE GREEKS OR THE SPANIARDS FOR INDIA’S ECONOMIC WOES. NOR ARE THE USUAL SUSPECTS, THE RAIN GODS, AT FAULT THIS TIME. GROWTH SLOWDOWN IS ESSENTIALLY HOME-MADE.” THE ECONOMIC TIMES

INDIA COUNTRY REPORT

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OF DOUBT IT IS HARD TO IMAGINE THAT INDIA WAS, UNTIL A MERE COUPLE OF YEARS AGO, ONE OF THE MOST ATTRACTIVE OF THE WORLD’S NEW ECONOMIES. THE LUSTRE HAS NOTICEABLY FADED IN THE LAST FEW MONTHS, WITH GROWTH SLOWING, THE DEFICIT GAP WIDENING, AND THE RUPEE FALLING THROUGH THE FLOOR AS A RESULT OF STALLED REFORM, GOVERNMENT PARALYSIS, AND A VARIETY OF OTHER FACTORS THAT HAVE MADE INVESTORS CIRCUMSPECT. THERE IS NO QUESTION THAT THE FUNDAMENTALS OF INDIA ARE JUST AS STRONG AS THEY WERE HALF A DECADE AGO, AND THE COUNTRY IS EXPECTED TO TURN THINGS AROUND IN THE NEAR FUTURE. BUT THE NEXT FEW MONTHS COULD BE CRUCIAL, FINDS RANAJIT DAM

REUTERS/Arko Datta

T

he recent statement from Leif Lybecker Eskesen, HSBC’s chief economist for India, describing the country as "a gasping elephant" would have been unthinkable a few years ago, as would have been the comment from Jim O'Neill, former chief economist at Goldman Sachs and the man who coined the famous "BRIC" moniker - that India was the "biggest disappointment" of the BRIC nations. An interplanetary traveler visiting Earth in the 2009, shortly after India had weathered the global financial crisis with a sense of relative calm, and then returning sometime in the first half of 2012 would be encountering a completely different country, particularly if the newspaper headlines were to be believed.

Much of the negativity, however, has been justified. India's GDP grew a mere 5.3 percent in the quarter compared to a year earlier, its slowest quarterly pace since early 2003 and below economists' forecasts of 6.1 percent. For those used to the 8 percent the country had registered in recent years, it certainly felt like the growth party was over. This was the hangover setting in. As of the time of writing, the rupee had breached the mark of 56 to the dollar, and did not look like it was headed the right way anytime soon. India’s trade deficit in April amounted to $13.48 billion, with oil imports which account for the single largest chunk of India’s import bill, standing at $13.9 billion. When you combine all these with stifling red tape, a lumbering bureaucracy, and some distinctly investor-unfriendly moves by the Congress-led coalition government of Manmohan Singh, the picture begins to look grim indeed.

The government has attributed much of the slowdown to the falling growth seen elsewhere around the globe. But India’s current situation owes much to problems at home, and has been on the horizon for a while now. "There is no point blaming the Greeks or the Spaniards for

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India's economic woes. Nor are the usual suspects, the rain gods, at fault this time," noted The Economic Times, possibly the most influential business newspaper in India. "Growth slowdown is essentially home-made." New Delhi has been spending massively on welfare programmes, which, while politically popular, have widened the budget deficit and exacerbated inflation. Oil imports (as stated above) have widened the trade deficit, weakening the rupee and pushing up the cost of imported goods. To rein in inflation, the Reserve Bank of India doubled benchmark interest rates over a period of two years – from 4.25 percent in January 2010 to 8.5 percent in January 2012 – and this has led to a drop in the pace of investments in the infrastructure and manufacturing sectors. In April, Standard & Poor's downgraded India’s rating from stable to negative, citing “lower GDP growth prospects and the risk that its external liquidity and fiscal flexibility may erode”.

Clearly, the alarm bells have begun ringing.

Much of the blame is laid at the feet of the current government.

“Certainly six months back, if not earlier, there was realisation of the eurozone crisis and (the) weakening of the Indian economy (deficit and inflation included) would have an impact on India,” says Jyoti Sagar, founder partner at J. Sagar Associates. “However, since November

ASIAN LEGAL BUSINESS august 2012

2011, the acts of commission and omission in governance, or the lack of it, have clearly and disproportionately impacted India.”

The Indian authorities have been accused of paying scant respect to Indian firms, while displaying a condescending attitude towards investors. Additionally, it has made no moves toward reforms of any variety as corruption and red tape have run unchecked. Examples like the scandal surrounding the sale of 2G licences and the Vodafone case, which has led to a Finance Bill containing extraordinary retrospective provisions that go back 50 years, have not helped either. “From purely a lawyer’s perspective, the casualty has been the belief that we are a country governed by the rule of law,” says Sagar.

LEGAL WORK IMPACTED According to Sagar, the gloom pervading the

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“Certainly six months back, if not earlier, there was realisation of the eurozone crisis and (the) weakening of the Indian economy (deficit and inflation included) would have an impact on India. However, since November 2011, the acts of commission and omission in governance, or the lack of it, have clearly and disproportionately impacted India.”

REUTERS/Rupak De Chowdhuri

JYOTI SAGAR, J. Sagar Associates

Indian economy has led to market sentiment being definitely bearish, especially when compared to the bullish waves of the recent past. Another outcome has been a fall in foreign investments, both financial as well as strategic. “This is characterised by lower (and perhaps more realistic) valuations in the M&A and private equity space, as contrasted by the more bloated valuations one would witness up until four or five years ago,” he says. “While mid market M&A activity is still prevalent, it is the transactions having a larger ticket size which are only few and far between and less forthcoming.” Sagar adds that there has not been any significant capital markets activity.

Rabindra Jhunjhunwala, partner at Khaitan & Co, agrees with regard to the capital markets work. “With the economy being what it is, there has definitely been a dent,” he says. “Investor confidence is low, which has resulted in IPOs being stalled, and hence the volume has dropped significantly, even though clients are still interested in listings.” According to Ashwin Ramanathan, partner at AZB & Partners, part of the reason for the slowdown in capital markets work is that IPO promoters have very little incentive to go through with them. “Companies are currently waiting for markets to turn,” he says.

Jhunjhunwala adds that a lot of the firm’s capital markets lawyers are now helping out on the M&A side, which seems to be awash with work. “There is so much buying happening, and it is pretty much across all

sectors,” he says. “We honestly do not know how to handle all this work.” Arun Balasubramanian, a Singapore-based partner with Linklaters’ India practice, notes that his firm has seen a fall in plain vanilla transactions, and an increase in more complex structured deals like IL&FS Transportation Networks Ltd (ITNL), which through its Singapore-based subsidiary, is looking to raise money by issuing yuan-denominated bonds. He adds that an interesting trend has been the appetite of Indian companies to acquire assets overseas, despite the prevailing global economic conditions, and cites the example of auto parts maker Motherson Sumi’s acquisitions in Europe. “Also, there is a great deal of potential for M&A activity in the healthcare and pharma sectors,” he adds.

Ramanathan also says that in a way, the larger law firms are hedged against market turbulence since they can provide a wider range of services. “As the capital markets work reduces, our litigation side is positively booming,” he says. “What is different now from other financial crises is that clients have much less patience when it comes to initiating litigation. They are willing to pull the trigger much earlier.” Sagar says that his firm is seeing continuing activity in the dispute resolution sphere, apart from the regulatory and infrastructure space, “given the uncertainty in the regulatory climate and contractual defaults”.

RETAIL TO THE RESCUE? Lawyers agree that one of the brightest spots in India’s road to recovery is the introduction of foreign direct investment into the country’s massive retail sector (See box on p.60) - something the government has been unable to carry out in full in the face of fierce opposition from across the political spectrum and from traders' unions. The annual sales of the sector amount to an estimated $450 billion, with nearly 90 percent of the market being controlled by tiny family-run shops.

The country recently allowed 100 percent FDI in single-brand retail subject to certain sourcing restrictions, but no ownership in multibrand retail. “The opening up of the insurance and retail sector to foreign

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KEY FACTS: INDIA’S RETAIL

LOCAL COMPANIES

Supermarket chains are looking for funding in a tough business environment, with foreign partners closed off for now after last year's indefinite suspension of a move to open the $450 billion retail market to giants such as Wal-Mart.

• Pantaloon Retail, India's largest listed retailer

The government had hoped the major reform would boost investment in Asia's third-biggest economy, but it quickly backtracked when it came up against fierce opposition from across the political spectrum and from traders' unions.

Following are some facts on India's retail sector:

• The retail sector in the nation of 1.2 billion

people is estimated to have annual sales of $450 billion, with nearly 90 percent of the market controlled by tiny family-run shops.

• Organised retail, or large chains, makes up

about 10 percent of the market, but is expanding at 20 percent a year. This is driven by the emergence of shopping centres and malls, and a middle class of close to 300 million people that is growing at nearly 2 percent a year.

•

India also allows 100 percent FDI in cashand-carry, or wholesale, ventures. Restrictions on foreign investment in front-end retail exist because of opposition from millions of small shopkeepers, who are valuable vote banks during elections.

• India has recently allowed 100 percent FDI in

single-brand retail subject to certain sourcing restrictions, but no ownership in multibrand retail.

and part of the Future Group, runs apparel and electronics stores under its lifestyle brands Central, E-Zone, and Hometown. Future also operates the Big Bazaar hypermarket chain and supermarket brand Food Bazaar.

The group has over 1,300 stores across formats, and occupies a total retail space of 16.5 million square feet in India.

Future has, for long, been linked to France's Carrefour for a partnership in hypermarkets.

It recently sold controlling stake in its flagship clothing brand Pantaloon to bring down its high debt.

•

Second ranked Reliance Retail is part of Reliance Industries, India's largest listed group headed by Mukesh Ambani, India's richest man. Reliance Retail operates 1,300 stores across neighbourhood stores, supermarkets, hypermarkets, and lifestyle stores.

It has said it does not plan to partner with any global retailer.

• Shoppers Stop, part of the K Raheja Group which operates in real estate, has about 265 stores across brands and formats including 12 Hypercity hypermarkets.

It operates 4.58 million square feet of retail space, and its loss-making Hypercity is open to partnerships with foreign groups.

• Trent, part of the sprawling Tata Group, operates 106 stores across formats and runs the Westside range of apparel stores, in addition to hypermarkets under Star Bazaar. It signed a

investors will certainly augur well for the industry and investor sentiment alike,” says Sagar.

Jhunjhunwala agrees. “Liberalisation is key, and I expect it to happen in a number of sectors, including retail and insurance,” he says.

“These are hard decisions that the government has to take.” He adds that just a “few small things” in the near future would be enough to turn around India’s fortunes. “We need clarity on the telecom issue, and we need clarity on the issue of tax,” he says.“ And all these will happen; I am positive.” Another positive for him is the fact that many countries around the world are experiencing slowdowns as well. “The West is presently having a hard time too,” he says. “This is clearly a time of opportunity.”

According to Balasubramanian at Linklaters, one trend he is seeing is more foreign investors entering into JVs with Indian counterparts instead of going for outright acquisitions. “This tends to benefit both parties,” he says. “The Indian partner gets the knowledge and the knowhow, while the foreign partner reduces its risk.” He expects to see liberalisation in sectors like retail, and “sensible regulations” in areas like transportation and aviation. “However, you need to keep in mind that this is a sentiment-driven market,” says Balasubramaniaun.

“That needs to change.”

franchisee agreement with Tesco under which Star Bazaar shops use the British firm's supply chains and infrastructure.

• Aditya Birla Retail is the unlisted retail arm of

India's telecoms-to-cement conglomerate Aditya Birla Group, headed by Kumar Mangalam Birla, ranked the seventh-richest Indian by Forbes in March 2012.

T h e co m p a n y o p e r a t e s a r o u n d 5 0 0 supermarket and hypermarket stores under the More brand. It has said it will evaluate partnerships with global firms.

MAJOR FOREIGN COMPANIES

• Wal-Mart has a cash-and-carry operation with Indian partner Bharti Enterprises, the parent company of leading mobile provider Bharti Airtel, and will add 12 to 15 new cash-and-carry stores this year to its 17 existing stores.

• Tesco, Britain's largest retailer, has a tie-up with

Trent's Star Bazaar hypermarket chain. Tesco is also looking to enter the wholesale market through the tie-up.

• Germany's Metro AG operates 11 wholesale stores in India. The company plans to open five cash-and-carry stores every year.

• Carrefour has two cash-and-carry stores in India. The world's number two retailer has been seeking a local partner to enter the hyper or supermarket sectors.

For Ramanathan at AZB, one of the biggest pluses about the current situations is that assets have become cheaper. “Currently, as capital is hard to come by and debt is very expensive, valuations have become more realistic,” he says. “These present great opportunities for investors.” From a law firm’s perspective, he says that one of the strongest areas of growth has turned out to be the competition law practice, apart from the spike in litigation. However, he cautions that much will need to happen for India to come out of the woods. “All the problems that are being discussed need to be resolved,” he says. “A lot needs to be done. Investors are not convinced that this is the best time.”

THE BRAND REMAINS STRONG It is worth noting that despite all the headlines, not all the news coming out of India has been depressing. In March, India attracted

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REUTERS/Sivaram V

“THERE’S SO MUCH BUYING HAPPENING, AND IT’S PRETTY MUCH ACROSS ALL SECTORS. WE HONESTLY DON’T KNOW HOW TO HANDLE ALL THIS WORK.” RABINDRA JHUNJHUNWALA, Khaitan & Co FDI of $ 8.1 billion, the highest monthly inflow ever recorded, even though much of it was due to the $ 7.2 billion Reliance IndustriesBritish Petroleum (BP) deal announced in February 2011, which saw BP picking up a 30 percent stake in Reliance Industries' 21 oilfields. According to Sagar, despite its recent troubles, the fundamentals of India “as of now are still sound, be it the demography and be it also democracy. Both (of) these are long term positives. Foreign investors should see that side of the coin too. Bold and positive moves by the government would provide the credibility and the spark that we need urgently to put to work our inherent strengths as a country.”

Jhunjhunwala at Khaitan concurs, but says that while the last few months might not have heralded the end of the road for “India Shining”, it has clearly had an impact on the way the India brand in perceived among investors, particularly in the aftermath of the Vodafone tax case. “The announcement of the retroactive General Anti Avoidance Rule (GAAR), slated to come into force in 2013, had

a lot of people asking: ‘What exactly did the Finance Minister have in mind?’,” he says. “Is this the way things happen in a democracy, in a rule of law?”

Nevertheless, he sees some positive trends in the next year or so. One is the growing number of outbound transactions, as cashrich Indian companies take advantage of cheap assets overseas, particularly in natural resources. Another trend is that of PE funds selling to other PE funds. “Since exits are currently difficult as IPOs have stalled and funds that have raised money looking for assets to purchase, I see a lot of acquisitions of PE assets by other PE funds,” he says. Jhunjhunwala also sees competition law as a growing practice area for firms as awareness increases, and M&As continuing to be their biggest revenue generator. Another promising area, he notes, is infrastructure, where India has penciled in an investment of about $1 trillion. The country plans to award 9,500 kms of road projects, and commission three new airports in the fiscal year to March end in 2013.

Balasubramanian sees a lot of opportunities for India emerging from the so-called “South-South trade”. “I expect to see a lot of trading of resources located in Africa and in Southeast Asian countries,” he says. “There is a great deal of value to be had there.” Additionally, a lot of the larger companies will be looking to grab bigger assets overseas, he says, citing the attempt by Tatas to acquire Cable & Wireless as an example.

Sagar, however, has words of caution. “We have to avoid the temptation (and the arrogance) that we will be an attractive investment destination irrespective of what we do or do not do,” he says.

“Unfortunately, the world increasingly sees us in negative light. The perception is that we have red tape and not a red carpet for foreign investment. Add to that, we are not considered a business-friendly country… (and also) it was demoralising to see that India ranked 182 out of 183 countries in terms of enforceability of contracts. Now the recent threat that India’s rating could be pegged below investment grade does not really help.”

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As companies increasingly go to battle on the antimonopoly front in China, lawyers play a key role in the cavalry. With several high-profile cases grabbing headlines in recent months, including Qihoo 360 v Tencent, antitrust litigations are notably on the rise. Competition specialists are joining forces with litigators to fight for their clients, and it appears that dedicated antitrust litigation practices may make an appearance on the domestic legal scene sooner rather than later, finds Candice Mak

在中国，由于越来越多公司正在走上反垄断战场，因此律师 的角色显得愈发重要。随着近几个月数宗影响巨大的反垄断 案件登上新闻头条（包括奇虎360诉腾讯案），反垄断诉讼 的发生率明显上升。Candice Mak发现，反垄断及反不正当 竞争业务方面的专家已纷纷加入诉讼律师的行列，共同为其 客户争取权益，而专注于反垄断诉讼方面的法律业务也可能 很快会出现在国内法律舞台上。

**The Chinese translation of this story was prepared by Synmax Translation**

** 鑫马翻译提供中文译文 **

tide

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Antitrust

风起潮涌

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Antitrust

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B

y the end of 2011, there were 61 antitrust civil litigation cases accepted by the Chinese courts since the onset of the Anti-Monopoly Law (AML) in 2008. The vast majority of these related to abuse of dominance and of the 61, 53 have closed – most ending in settlements. These figures, as released by the Supreme People’s Court (SPC), reflect that antitrust litigation has been on a steady rise in China over the past few years. Susan Ning, a senior partner and the head of King & Wood Mallesons’ Beijingbased international trade, antitrust and competition group, says she has noticed and experienced an increasing number of companies considering employing the AML to protect their interests: “This has become the new battlefield, in particular for companies who feel that their rights and interests have been unduly infringed by more powerful industry leaders.” Philip Monaghan, a Hong Kong-based competition specialist at Mayer Brown JSM also observes the same trend. “Even when the AML first came into force, parties immediately started to take the initiative of going to court to enforce the conduct prohibitions in the law. This was a very striking development at the time and I think quite surprising to many,” he says.

One hypothesis that is being bandied about by legal practitioners

as to why competition courtroom battles are increasing is that of the inactivity of two of the three AML enforcement authorities. Since the AML came into effect, enforcement has been largely confined to the Ministry of Commerce’s (MOFCOM) screening of large M&As. Officials at the National Development and Reform Commission (NDRC) and the State Administration for Industry & Commerce (SAIC) have largely stayed on the sidelines. The NDRC concentrates mainly on monopoly pricing issues, while the SAIC enforces other antitrust rules, including those on monopoly agreements. “The comparative lack of institutional enforcement of the relevant behavioural rules has clearly provided an incentive for private action,” says Monaghan.

Whatever the impetus, all the lawyers ALB spoke with confirm that antitrust litigations are on the up-and-up, and are expected to further swell. “AML litigation is an area of law that is rapidly developing,” asserts Fangda Partners’ Beijing lawyer, Fang Qi. New regulatory updates On May 3, the SPC issued the Provisions on Several Issues Concerning the Application of the Law in Trials of Civil Dispute Cases Arising from Monopolistic Acts (Judicial Interpretation). The rules came into effect

“In the long run, as the practice matures, dedicated antitrust litigators could be real assets for companies seeking such services.”

Susan Ning, King & Wood Mallesons

“从长远角度看，随着反垄断司法实践的逐步成熟，专业反垄断诉讼律 师对寻求该领域服务的公司而言或将成为真正的资产。” — 宁宣凤律师，金杜律师事务所

自

2008年实施《反垄断法》（“《反垄断法》”）以来，截至 2011年年底，中国法院已受理了61 宗反垄断民事诉讼 案件，其中大部分案件与滥用市场支配地位相关，在这 61宗诉讼案中，已有53宗结案，其中大部分都以和解结 案。最高人民法院（“最高院”）公布的这些数据反映出近几年来中国反垄 断诉讼案件数量正在稳步攀升。金杜律师事务所的反垄断及反不正当竞争 业务团队的主管宁宣凤律师说，她注意到也已切实感受到，越来越多的公 司正在考虑利用《反垄断法》保护自身权益：“这块业务已成为一个新的 战场，对于那些认为自身权益遭到更强势的行业领军者不当侵犯的公司 而言更是如此。”美亚博国际法律事务所香港反垄断及反不正当竞争业务 专家Philip Monaghan同样注意到了这一趋势。他指出：“即使在《反垄断 法》刚出台时，各方便已开始主动向法院申请强制执行反垄断法项下的禁 止性规定。这在当时是一个重大发展，我认为许多人对此都颇感惊讶。” 业内有一种普遍假设，反垄断及反不正当竞争方面的诉讼不断增加与 三个反垄断执法机构中两个机构的消极不作为有关。自《反垄断法》生效 以来，反垄断执法工作主要由负责审查大宗并购交易的商务部（“商务部” ）负责。国家发展和改革委员会（“发改委”）与国家工商行政管理总局（“ **The Chinese translation of this story was prepared by Synmax Translation**

工商总局”）却在很大程度上置身事外。发改委主要关注垄断定价问题， 而工商总局则负责执行其他反垄断规则，包括针对垄断协议的反垄断规 则。Monaghan认为：“行政机关对相关行为规则执法方面的相对欠缺已 明显刺激了私人诉讼的产生。” 无论是什么因素促使反垄断诉讼在不断增加，接受ALB采访的所有 律师均认为，反垄断诉讼的热潮正在形成，并将进一步扩大。方达律师 事务所北京办公室的Fang Qi律师称：“反垄断诉讼是正在迅速发展的 一个司法领域。” 新法速递 5月3日，最高院公布了《关于审理因垄断行为引发的民事纠纷案件应 用法律若干问题的规定》（“《司法解释》”）。该《司法解释》于6月1日起 生效，旨在为解决垄断民事纠纷案件构建一个司法框架。目前，公司或个 人均可直接向人民法院提起反垄断诉讼，无须获得行政部门的确认或授 权。宁律师称：“《司法解释》清楚地阐明了反垄断私人诉讼中的某些关键 性问题，比如：原告地位、司法管辖权、举证责任、证据规则、专家证人、 司法程序、民事责任的形式以及诉讼时效。”宁律师认为，该新规则可能

** 鑫马翻译提供中文译文 **

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on June 1, and they seek to construct a judicial framework for civil anti-monopoly disputes. Now, companies or individuals may institute antitrust actions directly with the People’s Court without recognition or authorisation by administrative departments. “The Judicial Interpretation provides welcome clarifications on some key issues in AML private actions, such as the standing of plaintiffs, jurisdiction, burden of proof, evidentiary rules, expert witness, the judicial process, the form of civil liabilities, and the statute of limitations,” says Ning.

She outlines that the new law may impact antitrust disputes by: i) Encouraging more consumers or smaller enterprises to file private actions under the AML, as it clarifies that primary courts may also have jurisdiction over civil monopoly cases of the first instance; and ii) By lessening the plaintiffs’ burden of proof, which should encourage more private actions.

In relation to the latter, the Judicial Interpretation stipulates that: i) A plaintiff does not bear the burden of proving a horizontal monopoly agreement has anti-competitive effects; ii) A plaintiff can use information publicly released by a defendant as evidence of its dominance in an abuse of dominance action; and iii) The court may have a preliminary finding of market dominance on the basis of market structure and the

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competition conditions, if the defendants are public utility enterprises or other undertakings that are legally authorised to be in a monopoly position.

The Judicial Interpretation, according to Monaghan, is a “clear signal that the authorities are in favour of encouraging private action, not least because the Supreme People’s Court’s guidelines seek to make things easier for the plaintiff in a number of respects,” he says. Andy Huang, an associate at Hogan Lovells in Beijing, concurs that “given the clearer legal guidance, we expect to see more private enforcement of antitrust law in the coming years”. He also points out that since the beginning of this year, the State Council and its departments have released policies to encourage private investment in industries that have long been dominated or monopolised by SOEs, such as energy, transportation,

“(The Judicial Interpretation is a) clear signal that the authorities are in favour of encouraging private action, not least because the Supreme People’s Court’s guidelines seek to make things easier for the plaintiff in a number of respects.”

Philip Monaghan, Mayer Brown JSM

“[司法解释]清楚地表明，政府开始鼓励私人诉讼，主要原因就 是最高院的指引旨在从许多方面为原告提供便利。” — Philip Monaghan律师，美亚博国际法律事务所 通过以下方式影响垄断民事纠纷案件的解决：1)鼓励更多消费者或小型 企业根据《反垄断法》提起私人诉讼，因为根据《司法解释》，基层人民 法院也可以管辖第一审垄断民事纠纷案件；以及2)减轻原告的举证责任 —— 这将鼓励更多私人诉讼的产生。就后者而言，《司法解释》规定：1) 原告不对横向垄断协议具有排除、限制竞争的效果承担举证责任；2)原 告可以以被告对外发布的信息作为证明其具有市场支配地位的证据；且 3)被诉垄断行为属于公用企业或者其他依法具有独占地位的经营者滥用 市场支配地位的，人民法院可以根据市场结构和竞争状况的具体情况， 初步认定被告在相关市场内具有支配地位。 Monaghan认为，《司法解释》“清楚地表明，政府开始鼓励私人诉讼， 主要原因就是最高院的指引旨在从许多方面为原告提供便利”。霍金路伟 律师事务所北京代表处的黄律师也持同样观点，他说：“由于具备了更清晰 的法律指引，我们将会在未来几年中看到更多有关《反垄断法》的私人诉 讼案件。”他同时指出，自今年年初起，国务院及其各部委已公布了数项政 策，鼓励私人投资那些长期受国有企业支配或垄断的行业，其中包括能 源、交通、通信、教育、保险和银行业。他说：“根据《反垄断法》发起的私 人诉讼将可能成为打破目前国家控制上述行业局面的日渐有效的方式。”

案件精选 近期，发生了多宗影响巨大的反垄断诉讼案 和反垄断调查，表明公司和监管机构正在努力 推进反垄断法的实施。比如，去年11月，发改 委披露其正在对国有电信运营商中国联通和 中国电信涉嫌垄断行为进行调查。这两家电信 运营商共占约三分之二市场份额，他们因被指 向竞争对手收取高价但没有同时优化网络速度 而接受调查。 据路透社11月16日报道，发改委公布其正对 一档著名的中国午间电视新闻节目进行调查。 这一调查行为在中国这样一个通常由共产党高 级官员领导大型国有企业的国家是一项大胆的 举措。长久以来，监管机构行事谨慎，一直跟 随在已跻身全球最大公司行列同时又与中国最 高权力层密切相关的国企身后亦步亦趋，但上 述动作向亿万观众显示了监管机构如今坚决

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As Henry Chen, a Shanghai-based partner at MWE China Law Offices points out, “one of the most important weapons for an antitrust lawyer is economic and rule of reason analysis.”ALB China offers a unique insight into the role of economists for competition practitioners, through a commentary by Professor Bryane Michael, who is currently a visiting fellow at the University of Hong Kong’s Centre for Comparative and Public Law. He has previously advised on Anti-competition Law in Russia for the EU, and in the developing world for the Organisation for Economic Co-operation and Development (OECD), and the World Bank since 1995. He has done his doctoral work in Economics from Oxford and Harvard.

Economists: A lawyer’s best friend?

Bryane Michael, University of Hong Kong

F

ew law yer s receive training in econometrics and advanced statistics.

And why should they? Negotiating contracts, bringing suits against parties who violate the law, and interpreting the way new laws affect Hong Kong’s companies do not usually require heavy statistical analysis. Yet, in-house counsel with experience in the U.S. and/or EU knows that statistics provides a key method of helping to detect and file civil actions against the anti-competitive behaviour of commercial rivals. As Professor Rubinfeld of the New York University Law School notes: “To obtain a financial recovery in a private action, the plaintiff must prove three distinct elements: (1) An antitrust violation; (2) Antitrust injury; and (3) Damages – a measure of the extent of the injury.” Hong Kong’s law firms and in-house counsel will find that economists can help them with each of these points.

Consider the case of a hotel owner in Kowloon wishing to show that other hotels in the area are keeping their prices too low in order to drive him out of business.

Without an economist, that owner would need to obtain written proof that these hotel managers had met and come to an agreement. He would need copies of emails or preferably one of the hotel own-

ers to “squeal” on the others in their collusive agreement. With statistics though, the hotel owner’s legal counsel could more easily obtain information useful to start litigation. Such information might include correlations between room prices, discounts below estimated marginal costs, and expected losses taken by rival hotels in the area. Such information would certainly convince a judge to order further material investigation.

Three key statistical tests prove to be useful in this kind of litigation. Lead counsel should know about these tests when working with economists on particular competition law-related cases. The hypothesis test (or test of similarity) can show – with a certain level of certainty – that one hotel owner’s prices, occupancy rates and other factors – are not like the other hotel owners’. For example, an economist can tell you with a 99.999 percent level of probability that hotels in a district advertise prices below their expected marginal costs.

Economic methods can actually remove the distorting effects of factors like seasonal demand, how well the stock market is doing, the prices of inputs like labour, and so forth. The regression analysis can tell legal counsel how much the prices, quantity offered, amount of innovation, product quality, and so forth has changed in response to changes in factors like the number of other hotels in the area, the size of these hotels

(the amount of assets they hold), and so forth. Such regression analysis can show (with a certain level of confidence) that the profits of our hypothetical hotel owner have changed because of the actions of the other hotel owners. Economists can also do costbenefit analysis – showing the profits our hypothetical hotel owner has lost because of collusion by neighbouring rival hotels.

Such analysis can “take out” the effects of a weakening economy, changes in hotel regulations, and other factors.

Economists can provide law firms and in-house counsel with information useful in three venues. They detect anti-competitive behaviour – showing with a level of probability – when rivals are engaged in anticompetitive behaviour. They show such behaviour – which can be useful when asking regulators and judges for more in-depth investigatory work. They prove (in some jurisdictions) which anti-competitive behaviour occurs. We cannot directly observe secret meetings in which trading partners agree to manipulate prices, quantities, and so forth. But we can observe their effects.

In some instances, a 99.999999 percent statistical probability of engaging in anticompetitive behaviour is enough for regulators or judges to provide injunctive relief, assess fines, and provide other remedies.

In this way, an economist can be a lawyer’s best friend while enforcing Hong Kong’s new Competition Law.

Key cases

Recently, there have been a handful of high-profile antitrust cases and investigations showcasing companies and regulatory agencies pushing AML boundaries. For example, in November last year, the NDRC revealed that it was investigating alleged monopolistic activities by state-controlled telecom operators China Unicom and China Telecom. The two, which have roughly two-thirds market share, were being probed for supposedly charging rivals higher fees for broadband

打击垄断行为的决心。美国普衡律师事务所北 京办事处合伙人David Livdahl在接受路透社 采访时说：“中国政府希望通过公布这一案件证 明他们打击垄断行为的决心。此案涉及的罚款 占到企业年营业收入10%之多。”

该项调查与《反垄断法》第17.6条相关。该条规定，禁止具有市场支配 地位的经营者在没有正当理由的情况下，对条件相同的交易相对人在交易 价格等交易条件上实行差别待遇。2011年12月2日，中国电信向发改委提 交了一份整改方案，并申请中止调查。但是，由于监管机构未表示其是否 接受申请，因此发改委的调查可能仍在进行中。

telecommunications, education, insurance, and banking. “Private enforcement of the AML may be an increasingly effective means to break up the existing state control in those sectors,” he says.

**The Chinese translation of this story was prepared by Synmax Translation**

** 鑫马翻译提供中文译文 **

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正如上海元达律师事务所上海办事处合伙人陈立彤律师所指出的那样，“反垄断律师最重要的武器之一便是经济分析和合 理规则分析。”下面，将就经济学家对反垄断及反不正当竞争业务从业人员的影响问题，ALB中国与读者分享一下香港大学比 较法及公共研究中心的Bryane M ichael在这方面的独到见解。Bryane自1995年起为欧盟提供俄罗斯反不正当竞争法方面的咨 询，并为经合组织和世界银行提供发展中国家反不正当竞争法方面的咨询。他在牛津和哈佛的完成了经济学博士课程。

经济学家，律师最好的朋友？ 接

受过经济学和高级统计学方 面专业训练的律师可谓凤毛 麟角。那么律师为什么需要这方面的专 业知识呢？在合同谈判，针对违法的 当事方提起诉讼以及解释新法对香港公 司的影响时，并不需要大量统计分析。 但是，拥有美国和/或欧盟执业经验的 公司法务都知道，统计学是帮助律师 发现并提起针对商业竞争对手的不正当 竞争行为民事诉讼的关键方法。纽约大 学法学院的Rubinfeld教授指出：“为使 当事人从私人诉讼中获得经济赔偿， 原告必须证明以下三个要件：(1)被告 违反了反垄断法；(2)违法行为造成了 损害；以及(3)损害赔偿金，即量化损 害程度。”香港的律师和公司法务会发 现，经济学家会帮助他们证明上述三个 要件。 设想有一名九龙的酒店业主希望证明 该地区其他酒店试图以过低的价格将他 排挤出当地酒店业。如果没有经济学家 的帮助，该业主便需要取得书面证据， 证明其他酒店已达成具有上述目的的 协议。九龙的这名酒店业主必须取得相 关电子邮件，或最好有一名其他酒店业

主“告发”该共谋协议中的其他当事方。 但通过统计学分析，该酒店业主的律师 便可更容易地取得有助于诉讼的信息。 这些信息可能包括房价、低于预计边际 成本的折扣和该区域酒店竞争对手预期 承担的损失之间的关系。这些信息足以 说服法官下令对此进一步实质性调查。 有三项关键性的统计测试证明对此 类诉讼有所帮助。牵头律师在与竞争法 相关的特定案件与经济学家合作时，必 须对这些测试有所了解。假定测试（或 相似性测试）可以比较确定地证明一家 酒店的房价、入住率及其他要素与其他 酒店的房价、入住率及其他要素有所 不同。比如：经济学家能以99.999% 的准确率告诉您，某地区酒店通过广告 宣传的价格低于其预计边际成本。经济 学方法可切实消除诸如以下因素的偏差 影响：季节性需求、股市表现和劳动力 等成本。回归分析可以告诉律师（该地 区的）房价、房间数量、创新度、产品 质量等因素是如何随着该区域其他酒店 的数量及规模（该酒店所持有的资产数 量）等因素的变化而变化的。这些回归 分析可以比较有把握地证明我们所设想

的那个酒店业主的利润已由于其他酒店 业主的行为发生变化。经济学家还能够 进行成本效益分析，以显示我们所设想 的那个酒店业主已由于周边酒店竞争对 手的共谋行为而遭受损失。这些分析“ 剔除了”经济衰退、酒店行业法律法规 的变更及其他因素的影响。 经济学家可在上述三个方面向律师 和公司法务提供有用的信息。经济学家 在竞争对手参与不正当竞争行为时能发 现该不正当竞争行为，并证明其发生 的概率。经济学家指出存在不正当竞争 行为，可有助于要求监管机构和法官 进行更多深入调查。经济学家（在某 些司法管辖区）证明发生了哪些不正当 竞争行为。我们无法直接目击交易共谋 各方达成价格和数量操纵协议的秘密会 议。但是，我们可以觉察出由此产生的 结果。在某些情况下，如果某当事方有 99.999999%的统计概率参与不正当竞 争行为，便足以使监管机构或法官签发 针对该方的禁令救济，对其施以罚款并 向原告提供其他救济。由此可见，在执 行香港新的《竞争法》过程中，经济学 家可以是律师的挚友。

access without optimising network speed.

Reuters reported on Nov. 16 that the NDRC disclosed its investigation on a popular Chinese noon television news show. It was a bold step in a country where senior Communist Party officials run the biggest SOEs. The move, broadcast to an audience of tens of millions, signaled a new assertiveness by regulators that had largely remained in the shadows, treading gingerly around state enterprises that are

among the biggest companies in the world, and connected to China’s highest echelons of power. “By announcing this case so publicly, the PRC regulators are showing that they are serious. We are talking about a fine worth 10 percent of annual business revenues,” said David Livdahl, a Beijing-based partner at

该项调查的重要意义在于，它表明《反垄断法》同样适用于国有企业。 该案发生之前，法律从业人员和学者之间一直存在着有关国有企业是否 免于遵守反垄断和反不公平竞争法律的争论，因为国有企业与政府关系 太过密切。但是，发改委对中国联通和中国电信果断实施调查的行为明 确表明，国有企业也适用《反垄断法》。Monaghan说：“《司法解释》，

就其使得公用企业或者其他依法具有独占地位 的经营者具有支配地位这一假设成为可能而言， 也使还在进行的有关反垄断法是否适用于国有 企业的任何争论暂告一个段落。” 另一宗展现中国反不正当竞争现状的重大复

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REUTERS/Bobby Yip

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Paul Hastings to Reuters.

The investigation concerned with Article 17.6 of the AML says that enterprises with a dominant market position may not apply without justification, differential prices or other discriminatory transaction terms with their trading parties. On Dec.2, 2011, China Telecom submitted a correction plan to the NDRC, and applied for a suspension of the investigation. However, the NDRC investigation may still be ongoing since the regulator has not indicated whether it has accepted the application.

The significance of this investigation is that it revealed the AML applies to SOEs. Until this case, there was debate among legal practitioners and scholars whether SOEs were exempted from the competition rules – because they were so close to the government. However, since the NDRC bared its teeth, and went after China Unicom and China Telecom, it was evident that the SOEs were under the jurisdiction of the AML. “The Judicial Interpretation also puts to rest any remaining

controversy surrounding the application of the AML to SOEs in so far as it provides for the possibility of a presumption of dominance in the case of public utilities and companies with a statutory monopoly,” says Monaghan.

Another prominent and complex case promising to sculpt China’s competition landscape is that of Qihoo 360 v Tencent. On April 18, in the Guangdong High People’s Court, Qihoo claimed that Tencent Holdings - China’s largest internet company - abused the dominance of its messenger product QQ in the instant communications market by forcing consumers to choose between QQ and Qihoo products in November 2010, and bundling QQ safety software with QQ IM software without valid reasons. The plaintiff filed the current case against the defendant under Article 17.6 of the AML, and is seeking 150 million yuan ($23.8 million) as compensation. “In previous abuse of dominance actions, the courts almost always ruled against the plaintiffs on the ground that they failed to establish that the defendants were

杂案件便是奇虎360诉腾讯案。4月18日，奇虎向广东省高级人民法院起 诉，控告中国最大的互联网公司腾讯控股有限公司滥用其QQ即时通讯软 件(QQ)在即时通讯工具市场中的支配地位，于2010年11月强迫消费者在 QQ和奇虎产品中作出选择，并在QQ即时通讯软件中捆绑搭售QQ安全软 件，且未提供合理理由。原告根据《反垄断法》第17条起诉被告，请求法院 判令被告赔偿原告人民币1.5亿元（约合2380万美元）。“在以往有关滥用 市场支配地位的诉讼中，法院往往以原告未能证明被告具有市场支配地 位为由，作出不利于原告的判决，”在此宗标志性案件中担任奇虎代理律 师的宁律师说。“本案中，我的团队帮助奇虎确定各类数据来源，而奇虎

也聘请了经济学家进行经济分析，以确定相关市场以及腾讯具有市场支 配地位的事实。”法院尚未对此案件作出判决，许多业内观察人士希望法 院尽快作出判决。北京正见永申律师事务所合伙人何菁律师对许多律师 的观点作出了如下总结：“我们希望此案的结果可以为未来中国的反垄断法 司法实践提供重要先例和程序参考。在判决中将问题明朗化将有助于完 善司法体制并为未来修订《反垄断法》提供有益帮助。” 瑞邦诉强生案是首宗对外界公布的与纵向协议相关的反垄断案件。在 该案中，作为强生手术产品的北京经销商，瑞邦永和贸易有限公司指控强 生设定对第三方的最低转售价格。法院以原告未能证明强生拥有市场支

**The Chinese translation of this story was prepared by Synmax Translation**

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69

King & Wood Mallesons

China’s Anti-Monopoly Law: Retrospect and Prospect on the Fourth Anniversary

A Susan Ning Partner King & Wood Mallesons’ Antitrust & Competition Group, Beijing Office T: +86 10 5878 5010 E: susan.ning@cn.kwm.com

Hazel Yin Senior Associate King & Wood Mallesons’ Antitrust & Competition Group, Beijing Office T: +86 10 5878 5270 E: yinranran@cn.kwm.com

ugust 1, 2012 marks the fourth anniversary of China’s Anti-Monopoly Law (“AML”). Published on August 30, 2007 and effective on August 1, 2008, the AML introduces new regimes governing transactions and daily operations of domestic companies and multinationals.

Merger Control The Ministry of Commerce (“MOFCOM”) has reviewed over 450 deals with over 95% unconditionally approved.

As of August 1, 2012, 14 deals were cleared with “restrictive conditions” and 1 deal was prohibited.

Although the AML mainly follows the EU pattern, MOFCOM has developed its own methodologies. It was the only antitrust regulator that imposed remedies on global transactions such as General Motor/Delphi (2009), Seagate/Samsung (2011), and Google/ Motorola Mobility (2012). In Western Digital/HGST (2012), MOFCOM imposed vastly different conditions.

Multinationals do need to plan early and formulate a China strategy if a transaction may have a particular impact in China.

MOFCOM has further distinguished itself by employing a more receptive approach to conduct remedies: it employed conduct remedies in over half of the conditionally approved cases. Its reluctance to use structural remedies may be prompted by the intention to preserve the original transaction structure. However, it has become a challenge to strike a right balance to ensure that such supervision does not strip the conditions of their substance nor introduce unintended burdens on the obligors’ businesses.

In terms of procedure, MOFCOM has developed a streamlined process, though it is often very lengthy. In February 2012, it promulgated the rules for penalizing companies who fail to honor their notification obligations.

In July, it adopted a revised notification form, containing useful clarifications and additional information requests.

An encouraging development is a fast track mechanism in the pipeline, which is promised to simplify the review process of straightforward cases.

Investigation of Monopoly Conduct The National Development and Reform Commission (“NDRC”) is responsible for oversight of price-related monopoly agreements, abuse of dominance, and administrative monopolies. The State Administration for Industry and Commerce (“SAIC”) is responsible for nonprice-related monopoly conduct.

A: 40th Floor, Tower A, Fortune Plaza 7 Dongsanhuan Zhonglu, Chaoyang Beijing, 100020, P. R. China T: +86 10 5878 5010 F: +86 10 5878 5599 E: susan.ning@cn.kwm.com yinranran@cn.kwm.com W: www.kwm.com

The NDRC has historically been tasked with enforcing the price laws. Understandably, at the initial stage, the NDRC very often applied the Price Law and the AML in a mix.

The NDRC established its reputation as a powerful AML enforcement agency in 2011 when it announced a ground-breaking investigation of China Unicom and China Telecom for their alleged abuse of dominance in the broadband access market. It is also developing block exemption regulations for industries such as aviation.

It was also not until 2011 that the SAIC published two AML investigations. One case related to a market segmentation agreement among concrete manufacturers, and the other related to a local government’s abuse of administrative power. Both cases were handled by SAIC’s local counterparts, which is a distinctive feature of SAIC’s enforcement.

Unlike the centralized merger control regime, both agencies have delegated authority to their provincial counterparts. Local authorities have ample experience enforcing price laws and anti-unfair competition laws. As they gradually develop AML expertise, antitrust investigations will be a routine part of their responsibilities. It is therefore crucial for companies to build up awareness of the AML and adopt internal antitrust compliance programs.

Another observation is the recent IP antitrust workshop held by the two Chinese agencies, with the United States FTC and DOJ. The SAIC developed a draft IP antitrust guideline back in 2009. IP antitrust may become the next priority for AML enforcement.

Antitrust Private Actions By the end of 2011, 61 AML private actions were filed and 53 were closed. Most cases related to abuse of dominance claims and plaintiffs almost always lost for failure to establish dominance.

In May 2012, the Supreme People’s Court promulgated the judicial interpretation governing AML private actions.

It includes welcome clarifications on key issues such as standing of plaintiffs, burden of proof, evidentiary rules, and expert witnesses.

Several issues were tested in an earlier case. In April 2012, the Guangdong Higher People’s court held the first hearing of the Qihoo v. Tencent case, an abuse of dominance action and by far the most high-profile and complicated AML litigation in China. Qihoo developed ample evidence to establish Tencent’s dominance.

Experts were also called on to testify at the hearing.1 With only four years of history, the AML has already had far-reaching impacts on companies doing business in China. Dubbed the “economic constitution”, the AML is bound to re-shape the competition landscape in China’s developing market economy.

*Susan Ning is a partner in King & Wood Mallesons’ Antitrust & Competition Group, Beijing Office. **Hazel Yin is a senior associate in King & Wood Mallesons’ Antitrust & Competition Group, Beijing Office.

1

Qihoo is represented by attorneys from the antitrust and IP litigation groups of King & Wood Mallesons.

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Antitrust

ASIAN LEGAL BUSINESS august 2012

“There are many special terms and concepts as Anti-Monopoly Law is a special legal practice area.”

Henry Chen, MWE China Law Offices

dominant,” says Ning, who represented Qihoo in this landmark matter. “In this case, my team helped Qihoo to identify various sources of data - Qihoo also engaged economists to develop economic analysis - to establish the relevant market, and that Tencent is dominant.” No ruling has been handed down yet by the court, and many industry watchers are hoping for a judgment. He Jing, a partner at ZY Partners sums up what many lawyers expressed: “We hope the outcome of the case could leave a useful example, procedurally and practically, to significantly enrich China’s anti-monopoly legal practices. Making the problems clear in a judgment would be beneficial for the improvement of the judicial system, and for future amendments to the AML.” The Ruibang v Johnson & Johnson matter is the first published AML case relating to the vertical agreement. Here, Johnson & Johnson’s (J&J) distributor of surgical products in Beijing, Ruibang Yonghe Technology and Trade accused J&J of fixing the minimum resale price to third parties. The plaintiff’s vertical agreement claim was denied on the ground that it failed to prove that J&J had market power, and the resale price maintenance is anti-competitive. “This relatively high requirement of standard of proof in relation to vertical agreements appears to echo the SPC’s Judicial Interpretation in this regard, even though the decision was rendered before the Judicial Interpretation was officially enacted,” notes Ning.

Surging ahead There truly is a palpable sense among Chinese competition practitioners that litigations in their field will increase. As the Ruibang v J&J case sets precedent as the first published monopoly agreement case, lawyers believe that they will see monopoly agreement actions will rise in the future. “We will see diversified types of antitrust litigation, including cases where the government agencies are challenged before the courts for administrative monopoly or antitrust enforcement decisions,” says Huang of Hogan Lovells. Ning highlights that most current actions are tort actions, and because the Judicial Interpretation has specified that companies can file AML private actions to determine the validity of a contract or contractual clause, she expects “this could be employed by companies who feel they are bound by anti-competitive agreements”.

“To date, the success rate of plaintiffs in AML private action cases has been very low. Things will start to get interesting however when companies with significant resources behind them start using the AML provisions as a sword in private action,” says Monaghan. “Giants like Baidu or China Mobile, they’ve been on the receiving end of cases to date, but once companies with comparable or at least significant resources begin to take cases to court, plaintiff success rates can be expected to improve markedly.”

“由于反垄断法属于一个特殊的法律实务领域，因此存在许多特别条款和概念。” — 陈立彤律师，上海元达律师事务所 配地位，亦未能证明维持转售价格抑制竞争为理由，驳回了原告关于纵向 协议的请求。宁律师认为：“虽然法院是在《司法解释》正式出台前作出这 一决定的，但这一对纵向协议的较高证明标准在这方面看似是与最高院的 《司法解释》相呼应的。” 破浪前行 中国反垄断及反不正当竞争业务从业者均已切实感觉到这一领域的 诉讼案件将不断增多。作为首宗对外界公布的有关垄断协议的案件，瑞 邦诉强生案为垄断协议案提供了先例，而律师们也相信未来将发生更多 垄断协议诉讼案。霍金路伟律师事务所的黄律师评论道：“我们会看到各 类反垄断诉讼案，其中包括政府机关因其行政垄断或反垄断执法决定而 在法院被起诉的案件。”宁律师强调，目前大部分诉讼是侵权诉讼，并且由 于《司法解释》已明确规定公司可根据反垄断法提起私人诉讼以确定合同 或合同条款的有效性，因此她希望“认为自己受不正当竞争协议约束的公 司可利用该规定”。 Monaghan表示：“截至目前，在反垄断私人诉讼案中，原告胜诉的比例 仍相当低。”但是，当实力雄厚的公司开始应用《反垄断法》规定作为其私 人诉讼的利剑时，事情将变得有趣起来。虽然诸如百度或中国移动等行业 巨头至今仍是诉讼的被告方，一旦实力上与之旗鼓相当或拥有充沛资源的 **The Chinese translation of this story was prepared by Synmax Translation**

公司开始向法院提起反垄断诉讼，可以期待原告的胜诉率会明显提高。 专事反垄断业务者的机遇 随着反垄断和反不正当竞争纠纷日益增多，中国的法律市场又将如何 发展？反垄断尚属一个较新的业务领域，《反垄断法》仅实施了三年，而 诉讼却相对较为成熟。律师们认为，竞争法是十分专业、复杂并具有较 高技术性的法律。宁律师认为：“竞争法所采用的方法十分独特，与任何 其他部门法均有所不同。”上海元达律师事务所上海办事处合伙人陈立 彤律师指出，反垄断诉讼律师必须同时具备诉讼和反垄断法方面的专业 能力。他说：“由于反垄断法属于一个特殊的法律实务领域，因此存在许 多特别条款和概念。” 反垄断及反不正当竞争业务通常分为两类，即合并申报（监管方面） 业务和诉讼业务。黄律师说：“从事这方面业务的律师往往需要具备多个 不同领域的法律专业知识，才能服务好客户。”律师们认为，律师事务所 通常将合并申报和反垄断诉讼分别让专门的反垄断/反不正当竞争业务 团队和诉讼业务团队承办。反垄断诉讼要求竞争业务专家同时具备技术 和监管方面的专业知识以及诉讼律师的战略性思维模式。因此，将两个 业务领域结合在一起，由两个领域的律师共同处理同一案件是目前最常 见的模式。在反垄断诉讼中，律师必须具备特定的行业知识、对商业和

** 鑫马翻译提供中文译文 **

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Antitrust

71

Opportunity for specialisation So with competition disputes seemingly on an upward trajectory, how is this shaping the legal market in China? Antitrust is still a relatively new practice area –with the law being only a tender three-years-old – while litigation is quite mature in comparison. Lawyers comment that competition law is highly specialised, complex, and technical. “Its methodologies are unique, unlike any other practice,” affirms Ning.

Henry Chen, a Shanghai-based partner at MWE China Law Offices notes that antitrust litigation lawyers require specialties in both litigation and antitrust. “There are many special terms and concepts as Anti-Monopoly Law is a special legal practice area,” he says.

Competition practices are typically split into two – merger filings (the regulatory aspect) and litigation. “Quite often, they require separate sets of legal expertise to serve the clients,” says Huang.

According to the lawyers, law firms tend to allocate merger filings and antitrust litigation work to specialised competition and litigation teams, respectively. Antitrust litigations would require the technical and regulatory expertise of a competition specialist, and the strategic thinking of a litigator. So for the time being, it appears that the most common approach is to marry the two practice areas together, with specialists from each camp working side by side on a case. Antitrust litigations demand lawyers’ specific industry knowledge, business and economic sense, problem-solving abilities, and knowledge and understanding of the regimes, and precedents in other major jurisdictions. “These knowledge and skills are not readily found in any litigator,” says Ning. “For these reasons, my experience is that as the practice (antitrust litigation) is still at a fledgling stage, in order to find the best solutions, it is more efficient to combine the expertise of antitrust specialists with that of the IP litigators.”

In China, antitrust litigations are heard by the IP courts. According to Ning, because Antitrust Law is closely related to anti-unfair competition law and IP rights issues, the SPC decided that antitrust cases should be heard by the IP courts. Other sources believe that the IP court assignation partially had to do with sufficient resourcing. Monaghan of Mayer Brown JSM suggests that the technicalities and complexities of both competition law and IP law are similar, thus having the IP courts hear antitrust cases made sense: “When choosing the IP Tribunals,

the SPC was likely motivated by the somewhat technical nature of antitrust law and the fact that it requires an analytical approach which arguably IP judges would be well placed to provide. Of course, there is the fact too that these two areas of law are now generally recognised as pursuing the same fundamental goals of enhancing consumer welfare and promoting innovation.”

Ning provides an example of how the King & Wood Mallesons team cooperated on the Qihoo 360 v Tencent case: “It was handled by our attorneys from both the antitrust and the IP litigation groups.

The antitrust lawyers were mainly responsible for developing all possible claims and arguments, very often digging into and referring to precedents from other jurisdictions. The litigators, based on their experiences, chimed in to advise on the most practical strategy, from perspectives such as the readiness and availability of evidence, and the level of receptiveness of judges.”

The development of antitrust litigation as a specialised practice area for law firms is slowly evolving.But some feel it is still a few years away. “The market is still not large enough to support this specialty practice,” says Huang. He does acknowledge, however, that antitrust litigation is definitely one of the growth areas of legal practice. Ning says: “In the long run, as the practice matures, dedicated antitrust litigators could be real assets for companies seeking such services.”

经济的敏感、解决问题的能力，并了解其他主要司法管辖区的体制和程 序。宁律师说：“诉讼律师往往并不直接具备这些知识和技能。因此，我 的经验是，由于[反垄断诉讼]业务尚处于发展初期，所以为寻求最佳解 决方案，将反垄断法律问题专家的专业知识与知识产权诉讼律师的专业 知识结合起来是一种更为有效的方式。” 在中国，反垄断诉讼由知识产权庭审理。据宁律师说，由于《反垄断 法》与《反不正当竞争法》和知识产权问题紧密相关，因此最高院决定 应由知识产权庭审理反垄断案件。也有其他人士认为，让知识产权庭来 审理反垄断案件的部分原因是知识产权庭这方面的资源比较充足。美 亚博律师事务所的Monaghan认为，竞争法和知识产权法在技术性及复 杂程度方面有相似之处，因此由知识产权庭审理反垄断案件是合理的。 他说：“反垄断法具有相当的技术性，也需要用到审理知识产权案件的法 官特别擅长的分析方法，这些可能是促使最高院选择知识产权庭来审理 反垄断案件的原因。当然，人们现在通常认为这两个部门法追求的是同一 个基本目标，即增强消费者权益保护以及促进创新。” 宁律师以金杜团队如何相互协作承办奇虎诉腾讯案为实例，说到：“ 该案由本所反垄断和知识产权诉讼团队的律师共同承办。反垄断律师 主要负责准备所有可能的诉讼主张和论据，这项工作经常通过研究和借 鉴其他司法管辖区的案例来完成。诉讼律师则基于其经验，从是否已备

妥和获得证据以及法官对证据的采信度等角度出发，提出最具实际操作 意义的诉讼战略。” 反垄断诉讼正渐渐成为律师事务所的专门业务领域，但一些人觉得这 一过程仍需数年方可完成。黄律师称：“目前的市场规模尚不足以支撑这一 专门的业务领域。”但是，他承认，反垄断诉讼确实是一块正在发展中的法 律业务。宁律师称：“从长远角度看，随着反垄断司法实践的逐步成熟，专 业反垄断诉讼律师对寻求该领域服务的公司而言或将成为真正的资产。”

Road ahead Based on the quietness of activity from the SAIC and NDRC, and the issuance of the Judicial Interpretation by the SPC, it is fair to say that antitrust litigations are on the rise, and are encouraged by the government.

In a recent article published by Clifford Chance, the firm’s Beijingbased lawyers say: “It remains to be seen whether the new rules will increase the tide of private litigation in China. This seems to be the SPC’s intent with its focus on the rules of evidence, and the apparent relaxation of the evidentiary burden on plaintiffs.” The forecast is bright for competition specialists in China who are taking on more and more litigations. Already, we are witnessing the first troupe of dedicated antitrust litigators carving out their niche in a developing market.

前路漫漫 由于工商总局和发改委在反垄断事务方面鲜有作为，加之最高院发布 的《司法解释》，我们有理由认为反垄断诉讼的浪潮正在形成，政府也对 此持鼓励态度。 在近期高伟绅律师事务所发表的一篇文章中，该所北京办事处的一名 律师称：“《司法解释》的颁布是否将涌动中国的私人诉讼浪潮仍有待观 察。而最高院的目的似乎正在于此，其关注的焦点在于证据规则以及显著 减轻原告的举证责任。”这些给正在承办越来越多诉讼案件的中国竞争业 务方面的专业人士带来光明的前景。我们已经看到，首批专注于反垄断诉 讼业务的律师正在这个不断发展的市场中创造属于自己的独特商机。

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international tax

Analysis: Heavy debts set China solar makers up for consolidation

UK - Money laundering procedural breaches will remain criminal - and AML Update

By Matt Daily

AzureTax Ltd

As solar panel prices continue to march lower, Chinese solar companies are struggling with heavy debt loads, triggering expectations many will be forced to seek a new infusion of funds through takeovers or mergers.

Suntech Power Holdings could be liable for hundreds of millions in new payments after it disclosed a potential fraud by a partner, while peers such as LDK Solar, JA Solar Holdings Co, Trina Solar and Yingli Green Energy Holding Co are also feeling pressure.

With prices for solar panels barely covering the cost to build them, dozens of small Chinese solar companies are believed to have shut their doors, and equity investors have fled the sector, sending share prices of the U.S.-listed Chinese companies down more than 85 percent since early 2011.

Most of the Chinese solar companies will be able to stay open only if government lenders continue to keep lines of credit open despite forecasts of several more quarters of red ink.

“Solar as an industry is going to continue to grow,” said Brian Salerno, portfolio manager for Huntington EcoLogical Strategy ETF. “However, my belief is that for most of that time it’s going to be profitless prosperity.”

Solar analysts have pointed to LDK Solar as also having one of the country’s most stretched balance sheets, with debt and other liabilities of $6.0 billion versus cash and equivalents of just $244 million.

JA Solar listed its debt and other liabilities at $1.5 billion versus cash on hand of $676 million at the end of the first quarter, Trina Solar’s debt was a more modest $1.08 billion versus cash on hand of $490 million, while Yingli reported debt of $3.44 billion versus a cash position of $675 million at the end of the first quarter.

Suntech, which has the largest panel manufacturing capacity, may be on the hook for $690 million in collateral related to the possible fraud, and it also has a $541 million convertible bond payment in early 2013.

The company, which previously said it was in violation of some loan covenants, listed total debt and other liabilities of $3.58 billion, versus about $474 million in cash on hand as of March 31, according to a filing with the U.S. Securities and Exchange Commission.

Beijing has provided billions of dollars in credit lines and other supports to its solar industry through state-run banks, prompting the U.S. government to impose import duties earlier this year after some U.S. manufacturers filed a trade complaint.

Though analysts and solar competitors outside of China have long viewed government bank credit lines as a major funding advantage for Chinese solar makers, that support has encouraged the industry there to overspend on new factories, leading to a glut of panels on the market.

Obtaining a clear picture of the Chinese companies’ debts can be difficult, analysts said, since debts they often listed as short-term liabilities are perpetually rolled forward, essentially making them longterm facilities.

Suite 1010 10/F 89 Queensway Lippo Centre Hong Kong

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The rest of this report can be found on Reuters.com

T

he UK Government has decided to retain criminal sanctions for technical breaches of anti-money laundering (AML) regulations.

Consultation on the existing UK Money Laundering Regulations 2007 - based on the Third European Money Laundering Directive or 3ML - has been taking place since 2009.

Originally the UK Treasury indicated it was minded to adopt some of these suggestions, in particular that purely formal lapses in applying AML controls should no longer be a criminal offence. There have, in fact, only been two such prosecutions since the 2007 regulations were enacted.

However, in its final response to the consultation, the UK Government has rejected decriminalisation. It said that even a partial removal of criminal sanctions would ‘risk sending mixed signals’ on the importance of money laundering regulations. At the same time it stressed that the Crown Prosecution Services regards it as not in the public interest to prosecute employees for ‘minor, procedural or accidental’ regulatory failures.

The UK Government also decided against introducing a general de minimis rule to exempt very small firms from the AML regime. Its reasoning - supported by several commentators - is that the risk of money laundering and terrorist finance is not related to the size of a business, and there is significant evidence that criminals often operate through smaller businesses. Criminals might also respond by ‘smurfing’, i.e. splitting their businesses into smaller outfits to fall within the exemption threshold.

On the positive side, the government confirmed that law firms that merely hold wills and other client documents will not be bound by the AML regulations. Thus, solicitors who store documents for clients will not have to be supervised by the Financial Services Authority.

Another highly sensitive issue is that of checking beneficial ownership.

The current UK Customer Due Diligence regulations only require practitioners to verify their clients’identities, not the identities of the beneficial owners of the assets being handled. This, says the UK Treasury, has led some to believe that beneficial owner identification is optional - which, it says, falls short of the EU Directive’s requirements.

So the government intends to amend the regulations to clarify that the beneficial owner’s identity must be checked as well as the client’s.

However, it is temporarily shelving this amendment until the European Commission has completed its drafting of a Fourth Money Laundering Directive to replace 3ML, some-time in 2013.

This delay suits some commentators who had pointed out that client confidentiality prevents law firms from informing banks about funds held in client accounts, without explicit consent from the clients. The problem will have to be discussed again at national level if it is not resolved during the European 4ML negotiations.

10

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新加坡将成为下一个人民币离岸 结算中心

关于实施《合格境外机构投资者境内证券投 资管理办法》有关问题的规定

SINGAPORE

SHANGHAI

2012年7月27日，中国证券监督管理委员会（“ 证监会”）发布《关于实施<合格境外机构投资者 境内证券投资管理办法>有关问题的规定》（“规 定”），该规定取代了证监会于2006年8月24日发 布的《关于实施<合格境外机构投资者境内证券 投资管理办法>有关问题的规定》”（“2006年规 定”）。

2012年7月5日在苏州召开的中国—新加坡双 边合作联合委员会第九次会议上，中新两国签署了 《中华人民共和国与新加坡共和国自由贸易协定 下有关银行业事项的换文》。根据该文，目前两家 在新加坡营运、符合资格的中资银行，将获得特准 全面银行（Qualifying Full Bank）业务执照，这 两家银行之中，将有一家被授权为新加坡的人民 币清算银行且开展人民币结算业务。据此，在新加 坡的合格中资银行若有意成为特准全面银行，可 向新加坡金融管理局提出申请。截至本文日，中国 的四大银行，包括中国银行、工商银行、建设银行 和农业银行皆已在新加坡开设分行。

• “规定”降低了各个类型的境外机构投资者的申 请资格要求： • “规定”扩大了申请者范围，该规定中未出 现“2006年规定”中所称的基金管理公司，代之以“ 资产管理机构”。“规定”要求该等机构的申请资格 为经营资产管理业务2年以上，最近一个会计年度管理的证券资 产不少于5亿美元，相对“2006年规定”要求的基金管理机构的“ 经营资产管理业务5年以上，最近一个会计年度管理的证券资产 不少于50亿美元”，使得更多的境外机构投资者符合投资中国境 内证券的条件。 • 关于证券公司：“2006年规定”要求经营证券业务30年 以上，最近一个会计年度管理的证券资产不少于100亿美元；“ 规定”则改为经营证券业务5年以上，净资产不少于5亿美元，最 近一个会计年度管理的证券资产不少于50亿美元，要求大为降 低； • 关于商业银行： “规定”则取消了原有的商业银行世界排 名前100名的要求，改为要求经营银行业务10年以上，同时要求 一级资本不少于3亿美元，最近一个会计年度管理的证券资产不 少于50亿美元； • 关于其他机构投资者，如养老基金、慈善基金会、信托公 司、政府投资管理公司等，要求成立至少2年以上，最近一个会 计年度管理或持有的证券资产不少于5亿美元。 • “规定”第九条列明了合格境外机构投资者(“QFII”)可投资 的人民币金融工具，在“2006年规定”的基础上增加了在银行间 债券市场交易的固定收益产品和股指期货，扩大了投资范围。 • “规定”未特别说明QFII的投资额度，但鉴于国家外汇管 理局对合格境外投资者单次及累计结汇额度有明确的规定，因 此合格境外投资者投资证券仍应按照2009年国家外汇管理局《 合格境外机构投资者境内证券投资外汇管理规定》执行，其中单 个合格投资者申请投资额度每次不得低于等值5000万美元，累 计不得高于等值10亿美元。 • 对单个境外投资者通过QFII持有一家上市公司股票的持 股比例，“规定”仍要求不得超过该公司股份总数的10%，与2006 年规定相同；对所有境外投资者对单个上市公司A股的持股比例 总和，“规定”则将限制由20%放宽至30%。

开设人民币结算业务将为当地的投资者提供更多的人民币 产品的选择，从而增加人民币的结算业务。伴随中国经济的持 续增长，人民币在国际外汇和金融市场上的地位凸显。两年前 开始，中国政府陆续允许在香港用人民币结算进出口贸易，交 易人民币标识的产品。2012年6月，外国投资者可以在香港参 与人民币基金。虽然有的外国银行借助银行间的合作安排参 与人民币业务，但是香港市场上每日交易总额为人民币8亿元 的限制并不能满足海外市场对人民币产品的热情。因此近年 来，伦敦、东京和新加坡皆在争取成为第二个人民币海外结算 中心。自2011年开始，新加坡已经有银行陆续开通了人民币存 款业务。 作为世界第四大外汇中心，新加坡有足够的基础实力以支 持人民币贸易和产品。2012年7月6日，新加坡证券交易所（以 下简称“新交所”）公告其已经做好准备，以应对中国人民币标 值产品的挂牌、报价、交易和清算。配合此计划，新交所已经 提出对《上市守则》的修订草案，在有关外币产品条款中，加入 了“人民币”。 新加坡金融管理局对外资银行所颁发的执照类别之一，旨 在增加海外银行在新加坡的融入度，从而加强新加坡金融市 场的稳定性。特准全面银行业务执照区别于“全面银行（Full Banks）”执照，前者可在新加坡拥有有更多的开设分行的机 会，达50个。目前新加坡共有8家外资银行已取得特准全面银 行的执照，但无中资银行入选。申请特准全面银行需满足严格 的有关银行从业记录、金融稳健性、总部所在国的监督力度、银 行策略以及风险管控系统。现在仅在自由贸易协议下颁发特准 全面银行业务执照。

上述调整可以看出，中国证监会对合格境外机构投资者的门 槛已进行了大幅度的降低，新规定正式实施后，相信鉴于目前全 球市场疲软，势必会有更多投资者会通过QFII的方式投资中国 证券，作为中国执业律师，我们也深信法律市场会延伸出如信托 等诸多法律业务。 吳艷娟, 企業事務部资深法律顧問 T: +65 6322 2232 F: +65 6534 0833 E: wuyanjuan@loopartners.com.sg

陶丽, 合伙人 T: +86 21 6211 2390 ext 268 F: +86 21 6211 2387 E: li.tao@victorylegalgroup.com

陈姝, 企業事務部资深法律顧問 T: +65 6322 2230 F: +65 6534 0833 E: chenshu@loopartners.com.sg A: 俊昭法律事務所 16 Gemmill Lane, Singapore 069254 W: www.loopartners.com.sg

夏娅, 律师 T: +86 21 6211 2390 ext 260 F: +86 21 6211 2387 E: sara.xia@victorylegalgroup.com

A: VICTORY LEGAL GROUP 双胜律师事务所 Unit J, 14 Floor, Huamin Empire Plaza, No. 726, Yan An West Road, Shanghai, 200050 PRC W: www.victorylegalgroup.com

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Paul, Weiss, Rifkind, Wharton & Garrison LLP is a globally oriented, full-service law firm employing over 700 lawyers worldwide. Paul, Weiss is headquartered in New York and has offices in Tokyo, Washington, D.C., Wilmington, Beijing, Hong Kong, Toronto and London.

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Established in 1945, SyCipLaw is the largest law firm in the Philippines, with its principal office in Makati City, the country’s financial and business center, and branches in Cebu, Davao and Subic Bay. SyCipLaw combines its tradition of professional integrity and excellence with a time-tested ability to break new ground. The broad range of the firm’s expertise is reflected in its client base, which includes top corporations, international organizations and governments.

Loo & Partners was founded in 1985 as a niche practice, handling mainly banking, corporate, securities and commercial work. With the support of a comprehensive network of correspondent law firms, the firm serves its clients in their regional needs. Loo & Partners has been regularly noted for its IPO, M&A and general corporate work.

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Indochine Counsel is a commercial law firm focusing on business law practice in the Indochina region. Our areas of practice include: Foreign Investment, Corporate & Commercial, M&A, Securities & Capital Markets, Banking & Finance, Property & Construction, Taxation, Intellectual Property, Information Technology & Internet, International Trade, Outward Investment & Offshore Incorporation, and Dispute Resolution.

Victory Legal is a boutique legal practice in Shanghai, focusing on general corporate, corporate finance and capital markets matters. Its clients include governmental authorities, State-linked enterprises, banking and financial institutions, MNCs, SMEs and foreign law firms. The firm has extensive network across the region. It serves clients’ domestic and regional needs.

fUIJIAN Sphere Logic Partners is a mid-sized business law firm known for its offering of value, sophisticated legal solutions in a leaner approach across a range of practice areas, critical to the success of clients. We maintain an established global network with numerous law firms and relevant service providers. Our seasoned and cultureready professionals assist clients in cross-border investment, M&A and financing, governance and daily operations, identification of business opportunities and solving of complex legal disputes.

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Emerging Markets Kelvin Chia Partnership is a commercial law firm headquartered in Singapore with strong regional capabilities. With offices in Hanoi, Ho Chi Minh City, Yangon, Bangkok and Phnom Penh, and extensive experience all throughout Asia, we provide localized legal solutions consistent with international standards in emerging markets in Asia.

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

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The Japan In-house Counsel Network (JICN) is a professional association for in-house counsel working in, or having other affiliations with, Japan. JICN offers a forum for communication between members, social and networking opportunities, legal seminars, roundtable member discussions and other activities, as well as events with other lawyer and in-house groups. Visit www.jicn.jp for more details.

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SUNDRIES

ASIAN LEGAL BUSINESS august 2012 Compiled by RANAJIT DAM

‘INDECENT’ KATY PERRY

REUTERS/Steve Marcus

Pop star Katy Perry is the subject of a public interest lawsuit currently being heard in India’s Madras High Court over her dancing at the glitz-filled opening event of the Indian Premier League cricket tournament back in April. The court is acting on a public interest complaint filed by a lawyer, K. Jebakumar, who alleges that not only was the event “obscene and lascivious, appealing to prurient interest”, it also distracted students who were writing exams at the time.

Perry does not have to appear, however, since she has not been formally charged. Reigning pop goddess she might be, but in the eyes of one lawyer at least, Perry can do wrong.

THE RACE TO SEOUL ROPES & GRAY

SHEPPARD MULLIN RICHTER & HAMPTON

CLIFFORD CHANCE

Following the free-trade agreements signed by South Korea last year, these three Western law firms became the first to receive approval to open offices in that country. And more are waiting in the wings.

Source: The Wall Street Journal

QUOTE OF THE MONTH

“AS A CITIZEN, I SUSPECT, DO I LIVE IN A THEATRE OF ABSURDITY?” Pakistani barrister Zafarullah Khan argues before the country’s Supreme Court on the Contempt of Court Act 2012. A five-member bench is hearing 27 petitions against the recently introduced contempt legislation in Pakistan.

SHOULD THE INDIAN LEGAL MARKET BE LIBERALISED? YES, say the vast majority of respondents in India to a recent Allen & Overy-YouGov survey.

THE U.S. DOLLAR VALUE OF THE LAWSUIT FILED

BY CHURCHILL MINING AGAINST INDONESIAN PRESIDENT SUSILO BAMBANG YUDHOYONO OVER THE REVOCATION OF THE FOUR MINING LICENCES THAT COMPRISE THE EAST KUTAI COAL PROJECT.

IT SHOULD BE COMPLETELY LIBERALISED

IT SHOULD BE PARTIALLY LIBERALISED

IT SHOULD NOT BE LIBERALISED AT ALL

Respondents included 100 C-suite executives and 100 general counsel, all from large publicly listed or equivalent private companies in India, in addition to 51 partners and 50 associates from 50 large legal practices in India.

september 2012 / CHINA TOP STORIES IN THIS ISSUE

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Chinese boutiques

The PRC Investment Fund Law was revised at the end of June.

This is the first time since 2004 that lawmakers can debate suggested amendments and one of the key aims of the new draft is to protect investors’ interests.

However, the draft has ignited controversy and much discussion.

ALB explores the debates, the proposed changes in the new law and finds out how the constantly evolving regulations affect private equity lawyers’ practices.

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ALB will present various insights from specialist law firm partners and explore the future plans of these firm.

What are the issues lawmakers are debating? Find out here.

Can specialist law firms thrive against the rapid expansion of general commercial firms? The experts make their case.

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Sino-Canadian cooperation ALB takes a closer look at China’s growing energy investment into Canada. CNOOC’s $15 billion proposed offer to buy Canada’s Nexen, once approved by the Canadian and U.S. governments, will be the largest foreign deal for the Chinese ever. The significance of this deal – along with other landmark Sino-Canadian energy sector transactions over the past 24 months – heralds growing work for energy and M&A lawyers in the two countries What is on the horizon for Canadian and Chinese energy players? Firms offer their views.

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中国国际经济贸易仲裁委员会是1954年经中央人民政府政务院批准，由中国国际贸易促进委员会（中国国际商会）组 织设立、独立处理经济贸易争议的常设涉外仲裁机构。中国国际经济贸易仲裁委员会设立分会。中国国际经济贸易仲裁 委员会及其分会是统一的仲裁委员会，适用统一的《仲裁规则》和统一的《仲裁员名册》。 为了适应形势发展需要，进一步规范业务管理，提高工作效率，为当事人提供优质的仲裁服务，2012年1月，根据我国 《仲裁法》以及国务院1988年有关批复精神，中国国际经济贸易仲裁委员会对其《仲裁规则》进行了修订。该《仲裁规 则》于2012年2月经中国国际贸易促进委员会（中国国际商会）批准，将自2012年5月1日起施行。 自2012年5月1日起，中国国际经济贸易仲裁委员会2012年《仲裁规则》将统一适用于中国国际经济贸易仲裁委员会及 其分会。 该《仲裁规则》已在中国国际经济贸易仲裁委员会官方网站www.cietac.org上发布，敬请查阅。 特此公告。 中国国际经济贸易仲裁委员会 二○一二年四月二十四日

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