Asian Legal Business Jun 2008

www.legalbusinessonline.com

ISS

UE

8.6

ALB Special Report: China 2008Dragon continues to roar

Outbound traffi cOffshore fi rms cash in on PRC listings

Rise and rise of Islamic fi nanceViable alternative in current credit climate

LATERAL MOVES DEALS ROUNDUP REGION-WIDE UPDATES IN-HOUSE PERSPECTIVES SIGN OFF

BIG TIMEASIA’S LARGEST LAW FIRMS

CHINA’S AWARD-WINNING FIRMSPLUS:

1

ALB ASIAN LEGAL BUSINESS

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Founded in 1945, SyCip Salazar Hernandez & Gatmaitan is one of the most-established law fi rms, and the largest, in the Philippines. Principally based in Makati City, the country’s fi nancial and business center, the fi rm also has offi ces in Cebu City, Davao City and the Subic Bay Freeport. SyCip’s practice covers all fi elds of law and the broad range of the fi rm’s expertise is refl ected in its client base, which includes top local and foreign corporations, international organizations and governments. SyCip combines traditions of professional integrity and excellence with a time-tested ability to break new ground.

Philippines

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

China

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

Malaysia

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 fi rms, the fi rm serves its clients in their regional needs. The fi rm has been regularly noted for its IPO, M&A and general corporate work.

Singapore

International tax

AzureTax Ltd provides transparent strategic and ethical tax advice. Through our professional corporate and trustee services your tax plan is comprehensively implemented. Our tax advice provides independent innovative and rigorous solutions which deliver results and long-term accountability. Qualifi ed UK, Hong Kong and PRC tax advisors.

Financial services

Horwath Financial Services (www.hfs.com.hk), an independent member fi rm of Horwath International (www.horwath.com), provides a one-stop solution for your fi nancial planning, investment, property-fi nancing and general fi nancial health needs. We offer a range of payment options for our services including a fee-based alternative setting us apart in an industry that is dominated by commission driven sales.

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

Intellectual property

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Singh & Associates is a full service international law fi rm comprising of experienced, capable and dedicated legal professionals, company secretaries and chartered accountants. The fi rm is committed to providing exceptional legal counsel across a wide variety of local, national and international branches of law and specialises in several practice areas.

India

Established in 1889, Drew & Napier is one of Singapore’s leading law fi rms. Consistently rated top tier in dispute resolution, the fi rm has 7 senior counsel, the largest number of any Singapore law fi rm. The fi rm is headed by CEO, Davinder Singh, SC, one of Singapore’s foremost lawyers. Drew & Napier is also highly rated in Insolvency & Restructuring, IP, Tax, Banking & Corporate, Competition Law, TMT, and Shipping.

International arbitration

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Wouter Klijn

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James Morrow

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Moira Daniels

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Jacqui AlexanderRuby Alvarez

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Brenda LauPeter Chau

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Agnes Eng

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George Walmsley

CONTRIBUTING EDITOR

Renu Prasad

CHINA EDITOR

Yun Zhang

2 Asian Legal Business ISSUE 8.6

EDITORIAL >>

22

IN THE FIRST PERSON

Growing pains

It is one of the dirtier tricks of nature to make us, as children, long to grow older, only to later look back nostalgically to the simpler times of youth. George Bernard Shaw famously captured this dilemma with his aphorism, “youth is wasted on the young”. Yet even as we age, we learn (hopefully) to

accept change and progress with aplomb, and weather with grace the inevitable growing pains that come along for the ride.

These same lessons can – indeed, often must – be applied in our professional lives as well. That is much of what this issue of ALB is all about: growth, and the sometimes uncomfortable issues that can arise when getting bigger. Throughout Asia, conversations with top lawyers reveal a surfeit of concerns about the growth of the legal industry. Where will the necessary talent be found to handle the ever-expanding amount of work? How can a consistency of client experience be assured?

Already there is evidence that market forces are helping the legal industry work through these growing pains. The rise of boutique and niche law fi rms to provide specialised advice is one response to these problems. On the regulatory side, the opening up of the legal industry in jurisdictions such as Singapore is similarly to be applauded. And as we report in this issue, the growing number of Asian partners being named by European law fi rms is a further response to these issues.

Yet ultimately, the best rule for all law fi rms – large or small – is to remember that no matter how many cases and how many clients they might have active at any moment, each must be treated as if it were their only, and crucial to their survival. After all, for many of their clients, these cases are just that.

“[Allowing FIEs to list] creates the possibility for foreign investors to raise money locally, and reinvest or acquire with [those] funds”Peter Corne, managing director of Eversheds’ Shanghai offi ce, on Shanghai’s opening up to FIE listings (p14)

“The market in China [will] become increasingly competitive and an increasing number of international fi rms are going to attempt to make a go of it here”David Jacobs, Asia-Pacifi c regional chairman of Baker & McKenzie, on China (p30)

“All international fi rms with offi ces overseas will look to China as a very important part of their international plan”John Grobowski, head of Faegre & Benson’s Shanghai offi ce, on China for international fi rms (p48)

Ultimately, the best rule for all law fi rms to remember is that each client and case must be treated as if it were their only, and crucial to their survival


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Asian Legal Business ISSUE 8.6


CONTENTS >>

contents

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

ANALYSIS

10 Islamic fi nanceALB investigates Islamic fi nance as a practice for fi rms in the context of the credit crisis

11 Eastern promisesCredit crunches, oil shocks and economic slow-downs may be giving Western economies a kick, but for their far-fl ung law fi rms, there has never been a better time to be on the partnership track

14 SWFsThe billions lying in sovereign wealth funds (SWFs) mean these funds bear huge potential for law fi rms. ALB takes a closer look

FEATURES

38 Offshore fi rmsALB examines the crucial role offshore fi rms play in the listing of Chinese companies

48 ALB Special Report: China 2008ALB takes a look at the legal service industry in a number of leading economic centres in China

56 ALB China Law AwardsOn 25 April China’s most brilliant lawyers and fi rms joined ALB and Omega to celebrate outstanding achievements during the past year

58 Law fi rm associationsAs Asia corporations extend their reach outside the region, global law fi rm associations are coming into their own

REGULARS

6 NEWS• Foreign fi rms reluctant to apply for QFLF licences

in Singapore• Italian fi rm expands to Asia• Increase in China cross-border acquisitions• Kookmin Bank claims stake in Bank CenterCredit• Jinduichen Molybdenum IPO results • LPD acquires equity in Internickel Australia • Appointments

COMMENTARY

16 UK report

18 US report

23 IT column

14 IPALBAN TAY MAHTANI & DE SILVA

20 International arbitrationDREW & NAPIER

21 International taxAZURE TAX

24 REGIONAL UPDATES

• China PAUL WEISS

• PhilippinesSYCIP SALAZAR HERNANDEZ & GATMAITAN

• SingaporeLOO & PARTNERS

• MalaysiaTAY & PARTNERS

• IndiaSINGH & ASSOCIATES

PROFILES

27 Hendra Soenardi & Rekan

37 Wong Partnership

45 Walkers

51 Paul Weiss

ALB ISSUE 8.6

COVER STORY

28

5648

10

28 ALB 50Once again, ALB ranks the largest fi rms in Asia in a comprehensive annual report revealing the biggest and best fi rms in the region

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Woong Soon Song, Shin & Kim

deals in brief

“While the IPO market has dipped somewhat from the frenetic levels seen in 2007, there is still huge interest in the resource sector, particularly from cashed-up offshore investors. This is where Hopgood Ganim sees a number of synergistic merger and strategic investment opportunities arising in the short to medium term”

RICHARD HANEL, HOPGOOD GANIM LAWYERS

| HONG KONG |

BARING PRIVATE EQUITY ASIA ►INVESTMENT FUNDUS$1.52bn

The largest regional growth equity fund ever raised for Asia

Firm: Debevoise & Plimpton

Client: Baring Private Equity Asia

Lead lawyers: Andrew Ostrognai, Gerard Saviola

Known as Baring Asia Private • Equity Fund IV, the fund will target

target of US$1bn, was heavily oversubscribed and had to raise its hard cap fundraising limit to account for high investor demand and still turned away a substantial amount of investor demand

Investors in Fund IV include Ontario • Municipal Employees Retirement System, Partners Group, University of Texas Endowment, the UK’s Universities Superannuation Scheme, Goldman Sachs Asset Management, Pantheon and Global Investment House

Approximately half the investors • came from North America, a quarter from Asia, and a quarter from the Middle East and Europe

| KOREA |

KOOKMIN BANK – BANK ►CENTERCREDIT ACQUISITION

Largest acquisition and M&A deal abroad in Korean banking history

Firm: Shin & Kim

Lead lawyers: Woong Soon Song, Beom Su Kim, Sang Hyun Le

Client: Kookmin Bank

Kookmin Bank acquired more • than 30% equity interest in Bank CenterCredit

Kookmin to acquire more shares to • increase shareholding ratio to more than 50.1% within 30 months by purchasing existing common shares from selling shareholders and subscribing for new shares

Bank CenterCredit is one of the top • commercial banks in Kazakhstan. Its primary business consists of corporate and retail banking. Its corporate banking activities include providing a broad range of wholesale banking products to a diversifi ed group of domestic customers, primarily small and medium-sized companies

Kookmin is the largest fi nancial • institution in Korea, with more than 26 million customers, 1,204 branches and 9,570 ATMs nationwide, and about US$233bn in total assets

| CHINA/AUSTRALIA |

LPD HOLDINGS ACQUISITION ►IN INTERNICKEL AUSTRALIA PTY LTD (IAPL)US$108m

Firm: Hopwood Ganim

Lead lawyers: Richard Hanel, Michael Hansel

Client: Macarthur Minerals

Firm: Tress Cox

Client: LPD

LPD acquired a 30% equity interest • in Internickel Australia Pty Ltd (IAPL), holder of the Lake Giles project, for US$9.4m

LPD also acquired an option for • an additional 50% equity stake in IAPL from MMS for US$99m

Upon exercise of the option, LPD • is required to solely fund the development of the Lake Giles project through further capital contributions

Richard Hanel, Hopwood Ganim

companies in the alternative energy, media, fi nancial services, consumer and industrial sectors

Fund will target companies of • between US$100m and US$500m in value and with operations in China, India, Japan, Singapore, Hong Kong, Taiwan or Southeast Asia that require capital for expansion, recapitalisation or for M&A purposes

Baring Asia now has US$2.5bn in • assets under advisory

Fund IV, which had an original •

NEWS | deals >>

7www.legalbusinessonline.com

NEWS | deals >>

7

YOUR MONTH AT GLANCE ►Firm Jurisdiction Deal Name $USm Practice

Allen & Gledhill Singapore STMicroelectronics Special purpose vehicle 428 Restructuring

Allen & Overy China Asia Pacifi c Land purchase of The Center offi ce building

650 property

Philippines Pepsi IPO 111 Equity

Alvin Chong & Partners Malaysia Dayang Enterprise Holdings IPO 14 Equity

Beijing Alliance Law Firm China, HK Poly (Hong Kong) Investments Limited share swap deal

200 equity

Clifford Chance Hong Kong CVC Asia Pacifi c investment in Hung Hing Printing Group

undiscl. equity

Deacons China Asia Pacifi c Land purchase of The Center offi ce building

650 property

Debevoise & Plimpton Hong Kong Baring Private Equity Asia fund establishment

1520 fi nance

Pan Asia Baring Private Equity Asia Investment Fund 1520 fi nance

DLA Piper China, HK, US Heckmann Corporation acquisition of China Water and Drinks

625 M&A

FoxMandal Little India, US , France Alcatel-Lucent – Reliance Communications JV

undiscl. JV

Freshfi elds Bruckhaus Deringer

China China Communications Services Corporation share placement

214 equity

China Belle share placement undiscl. equity

Vietnam, UK Vietnam Property Fund listing on AIM 90 equity

HK Yara divestment of China BlueChemical stake undiscl. M&A

Japan Robert Bosch tender offer for Bosch Corporation

960 M&A

Japan, China and Hong Kong

Rank Group – Alcoa acquisition 2700 M&A

Hong Kong, Italy Hutchison Global Communications /PLDT Global joint venture

undiscl. JV

Guantao Law Firm China Jinduicheng Molybdenum IPO 1300 equity

China China International Exhibition Center’s New Venue Project

428 Project fi nance, property development

China Puyang Refractories Group IPO 40 equity

Haldanes China, HKSAR Jones Lang Lasalle-Sallmanns Holdings acquisition

undiscl. M&A, Equity

Hopgood Ganim Lawyers Australia, China LPD Holdings acquisition in Internickel Australia Pty Ltd

108 equity

JSM China Shui On Construction and Materials Limited - China Central Properties Limited JV

262 JV

Kim and Chang Korea SK Telecom - Hanaro Telecom share acquisition

1101 equity

Lovells Lee & Lee Singapore China Huaneng Group senior acquisition fi nancing facility

1650 equity

Paul, Hastings, Janofsky & Walker

China Asia Pacifi c Land purchase of The Center offi ce building

650 property

China, HK Poly (Hong Kong) Investments Limited share swap deal

200 equity

Picazo, Buyco, Tan, Fider and Santos

Philippines Pepsi IPO 111 Equity

Rajah & Tann Singapore STMicroelectronics Special purpose vehicle 428 SPV

Singapore Hong Leong Asia Ltd proposed sale of building materials business to Tasek Corporation Berhad

237 M&A

Singapore Chartered Semiconductor Manufacturing Ltd stake acquisition in Hitachi Semiconductor Singapore

233 equity

| CHINA |

JINDUICHEN MOLYBDENUM ►IPO

Firm: Guantao Law Firm

Client: Jinduichen Molybdenum

Lead lawyers: Cui Liguo, Su Bo, Sun Dongfeng

Upon approval • of the China Securities Regulatory Commission, Jinduichen initially offered 538 million A shares

IPO completed raising US$1.28bn •

Jinduichen is the largest • molybdenum products producer both in the PRC and Asia. It is a vertically integrated producer and possesses a complete production chain that includes mining, ore processing, roasting, smelting, chemical treatment as well as the production of molybdenum metal products

| PHILIPPINES |

PEPSI IPO ►US$111m

The fi rst Philippines IPO of 2008

Firm: Allen & Overy

Client: Underwriters on US law

Firm: Skadden Arps

Client: Issuer on US law

Firm: Romulo Mabanta Buenaventura Sayoc and de los Angeles

Client: Issuer on Phillipines law

Firm: Picazo, Buyco, Tan, Fider and Santos

Client: Underwriters on Philippines law

IPO comprised a total of 1.14 billion • shares, or 30.9% of the enlarged share capital, which included the 30% of the deal that was earmarked for domestic investors

Shares were offered at a price • between Ps3.50 and Ps4.30 each and priced at the bottom of this bracket. There is a 15% greenshoe, which could increase the fi nal size to as much as US$128m if exercised in full

Two thirds of the offering consisted of •

Cui Liguo, Guantao Law Firm

8

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| HK/CHINA/US |

HECKMANN CORPORATION ►ACQUISITION OF CHINA WATER AND DRINKS (HK, CHINA, US)

IPO via special purpose acquisition company

Firm: DLA Piper

Client: Heckmann Corporation

Lead lawyers: Stephen Peepels, Steven Pidgeon

Firm: Thelen Reid Brown Raysman & Steiner

Client: China Water

Heckmann is the largest • and fi rst special purpose acquisition company to list on NYSE and to acquire a PRC public company

China Water, an OTCBB traded • company headquartered in Hong Kong, is a leading PRC licensed bottled water producer and distributor, with distribution in 14 provinces and regions across China

The company principally markets • its own bottled water products but also supplies to global beverage companies, including Coca-Cola. China Water will operate as a wholly owned subsidiary of Heckmann

Heckmann will fund the acquisition • of China Water with cash currently held in trust along with new shares to be issued

Lead lawyers: Derek Dalmer, Kyuli Oh, Queenie Hui

Client: lead counsel to STMicroelectronics NV

transfer of STMicroelectronic’s • Singapore fl ash memory business to a special purpose vehicle (SPV), including a wafer fabrication plant

SPV subsequently sold to Numonyx • BV, the Dutch holding company in which STMicroelectronics acquired a 48.6% ownership interest

transaction resulted in the creation • of world’s third largest non-volatile memory provider, through a combination of assets from STMicroelectronics and Intel

Singapore part of transaction • involved transfer of the fl ash memory business, which included assets such as contracts, employees and building, machinery and equipment used in relation to STMicroelectronic’s 200mm wafer fabrication plant.

| SINGAPORE |

STMICROELECTRONICS ►SPECIAL PURPOSE VEHICLEUS$428m

Firm: Allen & Gledhill

Lead lawyers: Michelle Foo, Tan Wee Meng, Teoh Chia Yin

Client: Local Counsel to Numonyx BV

Firm: Rajah & Tann

Lead lawyers: Lim Wee Hann, Yap Chew Fern

Client: STMicroelectronics

Firm: Shearman & Sterling

21.6%, will sell virtually all its shares and will hold only 0.2% if the 15% overallotment option is also exercised in full

PepsiCo, which aside from access • to new products, also provides the company with concentrates and marketing support, will own 29.5%

existing shares that were sold by the Guoco Group and the Nassim Fund.

Guoco Group, which acquired • the company in 1997 from the associates of the Lorenzo family, will see its stake fall from 40.3% to 30% following the IPO

Nassim Fund, which currently holds •

Lim Wee Hann,Rajah Tann

Stephen Peepels, DLA Piper

Yap Chew Fern,Rajah Tann

| CHINA |

SIA PACIFIC LAND PURCHASE ►OF THE CENTER OFFICE BUILDING

Largest ever single asset real estate deal in PRC history

Firm: Paul, Hastings, Janofsky & Walker

Client: Asia Pacifi c Land

Lead lawyer: David Blumenfeld

Firm: Allen & Overy

Client: Senior lender

Firm: Deacons

Client: Hutchison Whampoa Group subsidiary company

The Center is a Shanghai trophy • offi ce building located in Puxi. It was purchased from a Hong Kong Stock Exchange listed Hutchison Whampoa Group subsidiary for approximately US$650m

APL is a privately owned real estate • investment, development and asset management company, which makes investments in real estate

NEWS | deals >>


CORRECTION ►The deal brief of ‘Toll Holdings–BALtrans Holdings acquisition’ in Issue 8.5 contained the following error: Jennifer Cheung & Co was listed as the legal advisor to BALtrans Holdings in the acquisition. In fact, Jennifer Cheung & Co acted for the seller, while DLA Piper was the legal advisor to the target company and the lead partners of DLA Piper on the deal were Christopher Clarke and Esther Leung. ALB regrets this error.

YOUR MONTH AT GLANCE (CONT) ►

Firm Jurisdiction Deal Name $USm Practice

Shearman & Sterling Singapore STMicroelectronics Special purpose vehicle 1700 restructuring

Shin & Kim Korea Kookmin Bank - Bank CenterCredit acquisition

634 equity

Korea SK Telecom - Hanaro Telecom share acquisition

1101 equity

Korea MBK Partners and Macquarie Korea acquisition of C&M

2003 equity

Korea Kumho Asiana Consortium acquisition of interests in Korea Express

3929 equity

Shook Lin & Bok Singapore China Huaneng Group senior acquisition fi nancing facility

1650 fi nance

Skadden Arps Philippines Pepsi IPO 111 Equity

Simpson Thacher & Bartlett Hong Kong Suntech Power Convertible Senior Notes Offering

575 Debt market

China, US E-House (China)’s Follow-on Offering of American Depositary Shares

117 equity

China, US ATA Inc IPO 46 equity

Sullivan & Cromwell Singapore China Huaneng Group senior acquisition fi nancing facility

1650 fi nance

Thelen Reid Brown Raysman & Steiner

China, HK, US Heckmann Corporation acquisition of China Water and Drinks

625 M&A

Tress Cox Australia, China LPD Holdings acquisition in Internickel Australia Pty Ltd

108 equity

Wong Tan & Molly Lim Singapore China Huaneng Group senior acquisition fi nancing facility

1650 fi nance

Does your fi rm’s deal information appear in this table?Please contact Renu Prasad [email protected] 61 2 8437 4763

transactions in China, Japan and other countries throughout Asia

| HK/CHINA |

POLY (HONG KONG) ►INVESTMENTS LIMITED SHARE SWAP DEAL

First share swap transaction

approved under China’s new M&A Rules

Firm: Paul Hastings

Client: Poly (Hong Kong) Investments Limited

Lead lawyers: Chau Ho, Steve Woo

Firm: Beijing Alliance Law Firm

Client: Poly (Hong Kong) Investments Limited

Poly (Hong Kong) Investments • Limited is a company incorporated in Hong Kong and listed on the Hong Kong Stock Exchange

Shenzhen Poly Investments Co. • Limited is a company incorporated in Shenzhen

Deal saw Poly (Hong Kong) •

Investments Limited acquire the entire equity interest in Shenzhen Poly Investments Co, from China Poly Southern Group Limited, a wholly owned subsidiary of China Poly Group

Acquisition was funded by Poly • (Hong Kong) Investments Limited

issuing and allotting new shares to Poly Southern Group Limited

Completion of deal was signifi cant • given China’s introduction of new M&A rules in August 2006, which only allow overseas investors to invest in Chinese fi rms through share swaps in certain defi ned circumstances

10

NEWS | analysis >>


compliant products today are designed to replicate the economic and risk profi le of a conventional counterpart.”

Agha places a heavy emphasis on Shari’a knowledge, hiring lawyers who are also Islamic scholars and adopting a sound understanding of Islamic jurisprudence as a starting point. “A lot of fi rms are simply trying to replicate conventional structures into a Shari’a-compliant structure,” he said. “Our approach is to start with a genuinely compliant structure and to build the product from that.”

Banks and other entities looking to raise capital are increasingly turning to Shari’a-compliant offerings. A key reason,

are structuring their Islamic fi nance teams. “I don’t see it as a distinct practice area,” said Hooman Sabeti-Rahmati, senior counsel at Allen & Overy Shook Lin & Bok. “Islamic law is a body of law which ultimately needs to be applied to a structure or product. The knowledge of Shari’a is important, but the starting point must be knowledge of the underlying product. This is because most Shari’a-

fi nance at DLA Piper, has over 50 lawyers worldwide in his Islamic fi nance practice group. “It’s hard to get fi rm statistics, but we believe it’s the largest such group in existence,” he said. Clifford Chance, Norton Rose and Linklaters are other examples of fi rms which have worked on substantial Islamic fi nance transactions.

Of course, when one talks of team size, this begs the question of how law fi rms

Embryonic. That is the best way to describe Islamic fi nance practices of Asian law fi rms

outside of Malaysia, but there is no doubt that there are high expectations for the growth opportunities on offer. Lawyers specialising in Islamic fi nance, while traditionally based in Dubai or London, are keeping a close eye on developments in the Asia region.

Oliver Agha, partner and global head of Islamic

Islamic fi nance on the riseAs the credit crunch takes hold, more companies are fi nding that Islamic fi nancing is a viable alternative

ISLAMIC FINANCE – WHAT IS IT? ►Islamic fi nance is fi nance conducted in accordance with Islamic law or Shari’a• Certain practices in conventional fi nance are prohibited under Islamic law These include the charging or paying of interest or • earning profi ts from enterprises such as gambling or alcoholThe “sukuk” is the Islamic equivalent of a bond. The sukuk market has experienced exponential growth in recent years, although • some commentators have questioned its compliance with Shari’aOther than a small number of countries such as Saudi Arabia, Shari’a is generally not part of national commercial laws and • therefore would usually be voluntarily used by one or more parties to a fi nancial arrangement

NEWS | analysis >>


said Sabeti-Rahmati, is the abundant investment capital currently available, and increasingly so, in the Middle East. “Middle Eastern investors generally have not been averse to investing conventionally if Islamic alternatives were unavailable, but now that compliant alternatives are more available and growing, there is ready demand for them, which invites further innovation and growth,” said Sabeti-Rahmati.

Agha agrees and said that Islamic fi nance is increasingly important as a substitute for conventional fi nancing in light of the credit crunch. “You can see this in the current proliferation of Islamic funds, which is occurring as the traditional market is contracting,” he said.

JurisdictionsIslamic fi nance is an area of exponential growth for law fi rms, said Agha. “The main growth has been in the Middle East, but there’s also been strong growth in Asian markets. Kuala Lumpur has always the main [Asian] centre for Islamic fi nance, but in recent years we’ve seen other jurisdictions such as Thailand, Japan and particularly Singapore take an interest.”

Hong Kong, in particular, is keen to establish itself as the gateway for Muslim investment into Mainland China – intentions that were made clear by developments such as last year’s opening of the Hang Seng Islamic China Index Fund. “If they’re able to establish Hong Kong as a viable Islamic fi nance jurisdiction, I can see Hong Kong, along with Kuala Lumpur, being the region’s hot spot for Islamic fi nance,” said Agha. ALB

Oliver Agha,DLA Piper

“You can see a proliferation of Islamic funds, which is occurring as the traditional market is contracting”

OLIVER AGHA, DLA PIPER

Eastern promisesCredit crunches, oil shocks and economic slow-downs may be giving Western economies a kick, but for their far-fl ung law fi rms, there has never been a better time to be on the partnership track

Location, location, location: the old mantra for real estate success has lately been adopted by some of the world’s top law fi rms. In a

shift prompted as much by economic slow-downs in their own countries as by the growth of business abroad, a number of major law fi rms in the UK, US and Australia are naming increasing numbers of partners in their Asian offi ces. Consider London-based international commerce stalwart Holman Fenwick Willan. In their most recent tranche of partner announcements, four out of the eight promoted attorneys hailed from the fi rm’s Asian outposts: two in Hong Kong, one in Singapore, and one in Shanghai. And while many other fi rms are not yet approaching the 50 per cent mark in their partnership announcements, it is rare today to see an international fi rm of any import

not elevating a number of Asian-based attorneys on a regular basis. In the last two years, London’s Clifford Chance made six new partners in its Asian offi ces; meanwhile earlier this year Linklaters found three of its 28 new partners in its Asian offi ces.

While these numbers are indicative of steady growth – many London fi rms’ Asian partnership announcements still hover between 10 and 15% from year to year – other fi rms with major Asian presences such as Baker & McKenzie have been going gangbusters in ramping up their regional partner numbers. Having established its fi rst Asian offi ce in 1963, Bakers has something of a head start on other fi rms, many of which have come to the party only in the last decade or so. In 2007, the fi rm elevated 23 new partners across its Asian offi ces, bringing its then total Asian partner

12

NEWS | analysis >>


number to 275. The past year has seen a further 30 make the cut, bringing the number to 315, including both principals and local partners.

“While the fi rm has increased its partnerships around the globe, we defi nitely intend on continuing this trend in Asia,” said David Jacobs, Bakers’ chairman for the Asia-Pacifi c region. “In Asia, we’ve increased our partner numbers in all our offi ces, but particularly in China, Singapore, Australia, Thailand, and Vietnam. These are both equity and non-equity partners.”

“We’re very fortunate that the fi rm is

globally going very well, and as a result we’ve increased both partnerships and absolute profi t numbers – so we’ve been pretty lucky.

“Secondly, we’ve been fortunate in Asia in that we haven’t experienced the same effects of the sub-prime [crisis] and we’re seeing signifi cant growth in China, Singapore, Vietnam, Thailand, and, to some extent, Australia.”

Another fi rm that has been making major strides in the elevation of partners across the region is Australia’s Allens Arthur Robinson, which in its 1 July 2008 partnership

intake is not only elevating a number of attorneys in its Asian offi ces (four out of 11 partners, or 36%, versus just two Asia-based partners in last year’s intake) but is, for the fi rst time, bringing in non-common law practising partners into its inner circle. Further signalling the seriousness of the fi rm’s intentions towards Asia, all four of these attorneys will be brought in as equity partners.

“This is really quite an interesting time for us,” comments Allens’ Jim Dunstan, executive partner in charge of the fi rm’s Asian operations. “We’re bringing up a partner in an Indonesian law fi rm, signalling our close association with his fi rm (Widyawan) in Indonesia, and he’ll become an international partner.

“In addition, we’ll be raising up another new partner in Cambodia, Marae Cianter – an Australian who graduated from Melbourne University – and two more partners in Singapore: David Holme, who’ll focus on Indonesia; and Robert Fish, who’ll concentrate on Singapore banking.”

Along with the obvious instinct to name partners in Asia because, as the famous American bank robber Willie Sutton famously said, “because that’s where the money is”, the increasingly tight talent pool is another reason for fi rms to offer partnerships to their best and brightest.

Just as universities used to be able to (and in America, still regularly do) offer tenure to much sought-after lecturers, partnership is a good way to reward and hold onto talent.

“When I joined Lovells seven years ago, my analysis of the local talent markets was that although we were, at the time, behind the curve it wouldn’t be too hard for us to come into Asia and make up ground,” said Robert Lewis, managing partner of Lovell’s Beijing offi ce. (Lovells’ most recent tranche of 18 partners, announced in April, included two in Asia, putting it well within the 10 to 15% band of comparable London fi rms). “But now, it’s going to be harder for new entrants to the market to catch up”. As more and more talents get snapped up into the lofty ranks of partner, “we’ll get to a stage where it isn’t easy to just come in and grab teams and collections of individuals,” said Lewis. ALB

14

NEWS >>


Shanghai one step closer to fi nancial centre dream

Investors and lawyers are reacting with excitement to Shanghai’s opening up to listings of foreign invested enterprises, as ALB reports

Foreign invested enterprises (FIEs) have always been an important part of the economy, and have created signifi cant demand for commercial and corporate legal services. In the near future, they will offer new

mandates to domestic capital markets lawyers, as they are now allowed by Shanghai Stock Exchange to launch A-share IPOs.

Although there have never been any offi cial restrictions on FIEs listing on the mainland’s domestic stock exchanges, it has always been diffi cult for FIEs to list, due to the lack of a systemic and practicable operation guideline for FIEs to obtain fi nancing in the PRC’s securities market.

Currently, there are only a few FIEs listed in Shanghai and Shenzhen, including Ningbo Dongmu, a Sino-Japan joint venture that has been the fi rst FIE to successfully issue A shares. Each was handled as a special case and was given special support from the government.

However, the Shanghai government recently made a breakthrough in the development of FIE listings by indicating that it would start to encourage FIEs to apply to the stock exchange and set up a task unit to promote the listing of FIEs in Shanghai.

ANALYSISUPDATE >>

Intellectual Property

Discretion of the Court in Declaring a Registered Trade Mark Invalid

In Wing Joo Loong Ginseng Hong (Singapore)Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co. Ltd and Another [2008] SGHC 51, one of the issues to be determined was whether a “Rooster” device trade mark registered for inter alia,

cordyceps (the “Rooster” Mark”), was liable to be revoked or declared invalid.

Section 23(1) of the Trade Marks Act (Cap. 332, 1999 Rev. Ed.) (“Act”) provides that registration of a trade mark may be declared invalid on the ground that it was registered in breach of section 7. Section 7(1)(a) of the Act (read with section 2(1)), in effect, prevents the registration of a sign which is incapable of distinguishing the goods or services of a trader from those of another.

The court accepted that the “Rooster” mark had lost the capability to distinguish the 1st Defendant’s cordyceps. The issue was whether the registration must be so revoked or invalidated, or if there was discretion allowed in the matter.

Whilst Justice Kan was of the view that the construction of “may” in the provision for revocation could equally be applied to the construction of “may” in section 23, he respectfully departed from the judges in three reported Singapore High Court decisions in the context of trade mark revocation – Reemtsma Cigarettenfabriken GmbH v Hugo Boss AG (No. 2) [2003] 4 SLR 155 (“Hugo Boss”), Nation Fittings (M) Sdn Bhd v Oystertec Plc and Another Suit [2006] 1 SLR 712 and Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073 – which all held that there was no discretion allowed in the matter.

Justice Kan fi rst referred to section 39 of the old Trade Marks Act and the case authorities which confi rmed that the power to make rectifi cations to the trade marks register under that section was discretionary. He also reviewed the explanatory note and the Minister’s speech during the passage of the Act through Parliament in 1998. In his view, if the change in an established position in the legislation, that is, from discretionary to mandatory, was intended in the Act, this would have been mentioned in the Minister’s speech.

It was therefore held that the provisions in the Act should be construed to confer upon the Registrar of Trade Marks and the court discretion whether to revoke or invalidate a trade mark when the conditions are established.

Joyce AngAssociateIntellectual Property and Technology GroupAlban Tay Mahtani & de Silva LLPPhone +65 6534 5266Email: [email protected] Joyce Ang, ATMD

NEWS >>


In response to criticism of the slow approval process at the China Securities Regulatory Commission (CSRC), the task unit will aim to fast-track listing applications made by FIEs. “Although there’ll be no major changes to laws or regulations, this shift in government attitude is expected to make it much easier for FIEs to obtain the required approvals,” said Peter Corne, managing director of Eversheds’ Shanghai offi ce.

Corne and members of the Eversheds China Business Group recently met with representatives from the Shanghai Municipal Government Foreign Investment Commission and the Shanghai Stock Exchange to discuss FIE listing in China.

“This change in government attitude is very positive and encouraging for FIEs wishing to list in [Mainland] China, and we expect to see the number of FIEs listing soar,” said Corne. “We would foresee a three- to four-year window of opportunity before the market becomes saturated and the

Chinese authorities need to put higher listing thresholds in place.”

Once the FIEs listing scheme goes ahead, the pool of potential clients for capital markets groups in law fi rms will be greatly broadened, as there are nearly 300,000 FIEs nationwide.

“The infrastructure of China’s capital markets is rapidly upgrading. The establishment of a multi-structural fi nancing platform will drive law fi rms to diversify their capital markets practices,” said Charles Qin, founding partner of Llinks.

“The listings of FIEs, or possibly red-chip companies and foreign companies, will be a potential growth centre for our fi rm in 2008 and 2009,” Qin added.

Martin Hu, senior partner with Boss & Young, is also actively marketing his fi rm’s business in FIE listings. Just a few weeks ago, Hu presented a seminar for the European Chambers of Commerce in Shanghai regarding the new fi nancing channel for FIEs. The fi rm has advised a large number of overseas listings of domestic enterprises, and is set to take the lead in advising A-share listings of FIEs.

“FIEs will create a whole new arena in domestic listings, and will raise new questions and challenges for legal advisors to tackle,” said Hu. “Also, the decision of whether to list in China will be an integrated part of the foreign investor’s global strategy and policy. A lot of global arrangements and strategic planning have to be done before the listing can get the go-ahead.”

Most of Boss & Young’s foreign clients are from Europe and the US, but Hu expects that the fi rst FIEs to be listed in Mainland China will be from companies in the Asian region, particularly Hong Kong, Taiwan, Japan, Korea and parts of South East Asia.

“Asian groups are likely to be among the fi rst to seize this new fi nancing opportunity. They usually can react

quickly to new developments like this and make a decision in a timely manner. In contrast, European and American companies, especially large multinational companies, will take a longer time to make a decision,” Hu said.

In addition, Hu noted that small and medium-sized FIEs owned by Asian investors generally have a greater need to access different fi nancing tools.

In the listings of FIEs on the Shanghai Stock Exchange, PRC law fi rms will inevitably act as lead counsel in the transactions. Yet, due to the cross-border nature of FIEs, international fi rms and fi rms from the investor’s home jurisdiction are likely to be instructed in the more complicated IPOs.

“International fi rms can be involved signifi cantly in the restructuring of the business of the group, setting up a company limited by shares and making it suitable for listings,” said Corne. “There’ll be a lot of work for lawyers arising out of this development.”

Law fi rms in Korea, Japan, Singapore and Hong Kong that are trying to represent Chinese companies in their overseas listings should take note of this new development in Shanghai and start to look for opportunities to advise their clients on a Shanghai IPO.

In the context of the prohibition of round-tripping, it is increasingly diffi cult to structure transactions involving foreign investors. The opening up to FIE listings also provides a new, legitimate and attractive exit strategy for venture capital and private equity investors.

“For the fi rst time, it creates the possibility for foreign investors to raise money locally, and reinvest or make an acquisition with [those] funds. It’s an amazing new opportunity that has an incredible impact on the way that investments are structured in [Mainland] China,” said Corne. ALB

“For the fi rst time, [allowing FIEs to list] creates the possibility for foreign investors to raise money locally, and reinvest or make an acquisition with [those] funds. It’s an amazing new opportunity that has an incredible impact on the way investments are structured in China”

PETER CORNE, EVERSHEDS

16

NEWS >>


SINGAPOREForeign fi rms shy away from confi rming interest in Singapore licences

Cotty Vivant Marchisio & Lauzeral is the only foreign fi rm to

have confi rmed an interest in applying for a Qualifying Foreign Law Firm (QFLF) licence in Singapore. Five of these licences, which allow foreign fi rms to practise Singapore law in commercial arbitration through their own Singapore-qualifi ed lawyers without entering a joint legal venture, are in the process of being issued. While many fi rms are expected to apply for a licence, it appears their plans are staying under wraps at present. The QFLF scheme is expected to begin within 12 months. ALB

CHINAItalian fi rm gets serious about Asian expansion

Italian fi rm Chiomenti Studio Legale has widened its Asian

reach by signing a merger deal with Birindelli & Associati. The integration gives Chiomenti a presence in Beijing, Hong Kong, Shanghai, Singapore, Hanoi and Pyongyang.

“We believe that Chiomenti is the only top Italian law fi rm with offi ces in Asia,” said Filippo Modulo, head of the China desk in Rome.

The deal will offer a host of inbound and outbound legal services such as M&A, banking & fi nance, and capital markets to both Italian and Chinese clients. ALB

O’Melveny UK arm falling apart The senior associate and partner exodus at O’Melveny & Myers’ London offi ce continues, with reports that offi ce co-head Chris Ashworth is set to quit for Lovells, leaving just seven partners in the fi rm’s troubled City offi ce due to underinvestment by the fi rm’s Los Angeles hub, a shortage of M&A work and bleak partnership prospects.

Select fi rms announce pay freeze for associatesDespite a spate of pay rises in major and Magic Circle fi rms – including Shearman & Sterling, Linklaters, Bird & Bird and Clifford Chance – it seems Allen & Overy, Herbert Smith and Norton Rose are refusing to play ball, confi rming that they will not increase salaries for associates for the next fi nancial year.

Of the Magic Circle fi rms, Linklaters leads with the highest-paid newly qualifi ed lawyers in the City, offering £80,000 a year – in comparison with Freshfi elds, Allen & Overy, Clifford Chance

and Herbert Smith who currently pay their newly qualifi eds £66,000, £65,000 (A&O and CC), £63,500 and £64,000 respectively.

Herbert Smith fi nally has London head After 15 years without a managing partner role, Herbert Smith has fi nally split the senior partner role and appointed corporate partner David Willis to step in and help senior partner David Gold run the show. While Gold will continue to act as the fi gurehead of the fi rm and will chair the LLP council, Willis will advise more on matters of global expansion. His term will last until 2010, when Gold’s current term ends.

Kingston swaps Herbies for Covington partner role Covington & Burling recently nabbed Herbert Smith’s Paris head of corporate Mike Kingston for the fi rm’s European corporate practice in London. His appointment brings the number of City-based Covington partners to 14.

uk report

ROUNDUP

City fi rm Norton Rose re-elected chief executive Peter Martyr for another three-year term•

Ex-Hammonds partner Michael McCormack joins Salans’ City base, as the new UK head of tax •

Simmons & Simmons revealed an increase in turnover of 16% and successfully reached a per equity • partner target of over £600,000 for the fi rst time, according to the fi rm’s fi nancial results for 2007/08, while its head of construction, Robert Bryan, has left the fi rm to launch a London construction practice for Midlands fi rm HBJ Gateley

Ashurst is enjoying a 17% boost in turnover, taking the fi rm over the £300m mark with a record • turnover of £323m

Norton Rose turnover is climbing. According to its 2007/08 fi nancial results, the fi rm saw revenues • increase by more than a quarter to near the £300m mark

Herbert Smith reports a record-breaking fi nancial year, with a 25% surge in turnover and profi ts per • equity partner smashing the £1m barrier

Quinn Emanuel Urquhart Oliver & Hedges poached barrister Sue Prevezer QC from the City arm of rival • US fi rm Bingham McCutchen

Orrick Herrington & Sutcliffe boosted its City offi ce’s restructuring capabilities with the hire of Mark • Fennessy from Hunton & Williams

Roger Gregory, former head of Nabarro’s private equity team, became Brown Rudnick’s second partner • hire of the year, joining the US fi rm’s London offi ce last month

Henry Clinton-Davis has left WilmerHale as London head of employment to launch a UK employment • team at Arnold & Porter. He joined the fi rm as partner in early May and will oversee the fi rm’s wider growth plans for London and New York

NEWS >>


REGION

EAPD prepares to open Asian offi cesoffi ces in California and Chicago, and diversifi cation of the fi rm’s practices in London and Washington, DC.

The fi rm recently advised Takeda, Japan’s largest pharmaceutical company, in its US$8.8bn acquisition of Nasdaq-listed Millennium Pharmaceuticals, Inc through a cash tender offer. ALB

Deals in Asia have prompted Edwards Angell Palmer &

Dodge (EAPD) to include Tokyo and Hong Kong in its fi ve-year expansion plans.

Walter Reed, EAPD’s new managing partner, said the planned offi ces would service a growing international client base. The plans include new

CHINAChina cross-border acquisitions on the rise …

HONG KONG

The Hong Kong Corporate Counsel Association (HKCCA) has launched

a corporate membership scheme to make it more cost effective for corporations with larger numbers of lawyers to enrol all their lawyers together. The scheme is open to all companies, subject to a minimum subscription of HK$1,500. In the fi rst few weeks of the scheme, over 60 lawyers have joined. The HKCCA was formed in 2003 with the purpose of establishing a body for in-house counsel, run by in-house counsel. Its activities include CPD seminars and conferences, social events, serving as advocates for the in-house community and forging links with international in-house counsel communities. ALBINDIA

The mining sector is leading a surge of cross-border acquisitions by

China. Chinese acquisitions of foreign mining targets has reached a total of US$15.2bn so far in 2008, up from just US$248m for the same period last year.

It is part of a record trend for China cross-border outbound volumes – the value of announced cross-border acquisitions is now worth almost US$25bn from 65 deals – closing in fast on 2007’s full-year volume of US$29.8bn. ALB

… but India cross-border M&A on the wane

INDIA cross-border M&A volumes

TOTAL OUTBOUND ►Rank date Rank value

(US$m)Number of deals

Same period 2003 233 28



Same period 2006 2,445 74

Same period 2007 11,215 68

Same period 2008 6,827 109

YOY growth -39% – Source: Thomson Financial

India cross-border acquisitions are in decline – and by no small margin. The

latest statistics show a 39% drop so far this year on the corresponding period last year.

Ironically, the news comes only a month after the largest cross-border Indian acquisition so far this year – the US$2.3bn acquisition of Land Rover and Jaguar by Mumbai-based multinational Tata Motors.

The deal was a boon to local and international fi rms alike, including Allen & Overy, that advised on the international aspects of the deal, and AZB and Rodyk & Davidson, that advised on Indian and Singaporean law respectively.

Big deals mean big business for fi rms and the Indian M&A stats might be getting a big boost soon. Bharti Airtel,

India’s largest telecommunications company, has been widely reported to be in pursuit of South African MTN. The deal, if successful, could become the largest cross-border acquisition by an Indian fi rm on record, with sources estimating the deal to be potentially worth up to US$20bn. ALB

18

NEWS >>


INDIAHealth check for Indian judiciary, legal profession

How are we travelling? That’s the question the Bar Council of India

(BCI) is posing to its members as it conducts a nationwide survey of lawyers to fi nd out what they really think of the state of the profession and the judiciary.

The judiciary questions focus on the transparency (or lack thereof) of judicial appointments and the perceptions of nepotism, referred to as ‘uncle judges’ in bar parlance.

“Hopefully, this effort of the BCI will help enhance transparency and accountability of the judges,” said Saurabh Misra, associate partner of Paras Kuhad & Associates. “However, it would have been better if the litigants were also asked to give their feedback and suggestions.”

The questions relating to the profession raise a few controversial issues, including the re-introduction of a bar examination and the old concern of allowing foreign law fi rms to enter the Indian market.

The Bar Council is also canvassing the issue of whether part-time lawyers should be permitted.

“I’ll not be surprised if the lawyers in India, like the BCI, oppose the entry of foreign law fi rms and the re-introduction of the bar examination,” said Misra.

Skadden selects future executive partnerSkadden, Arps, Slate, Meagher & Flom has announced it will have a new executive partner come April 2009, when M&A partner Eric J Friedman succeeds Robert C Sheehan in the fi rm’s top leadership role.

Davis Polk & Wardwell instigates British management fi rst For the fi rst time, New York giant Davis Polk & Wardwell has elected a British partner on its most senior management board, with London-based partner Tom Reid due to join the fi rm’s three-member management committee for a three-year term. He joins managing partner John Ettinger and litigation partner Carey Dunne, both of whom were re-elected to the committee.

Shearman & Sterling cuts global GC role Shearman & Sterling has scrapped its global general counsel role as part of a major reorganisation. John Shutkin’s general counsel and risk management role will be absorbed by a number of partners globally, with New York arbitration partner Henry Weisburg overseeing the function following Shutkin’s departure in June.

K&L Gates and Kennedy Covington to join forces Kirkpatrick & Lockhart Preston Gates Ellis and Kennedy Covington Lobdell & Hickman, from Charlotte, North Carolina, are in merger discussions. If all goes to plan, the merger will be completed by July, resulting in a 1,700-lawyer fi rm with 28 offi ces located in the US, Europe and Asia.

New chairman on the horizon for Paul WeissPaul, Weiss, Rifkind, Wharton & Garrison has confi rmed that Brad S Karp, currently co-chair of Paul Weiss’ litigation department and a member of the fi rm’s management committee, will take the helm as chairman come January, succeeding Alfred D Youngwood who will retire at the end of the year.

Debevoise & Plimpton promotes fi ve in NYCThe latest round of promotions from Debevoise & Plimpton has seen fi ve lawyers from the fi rm’s corporate and litigation departments make partnership in New York. Erica Berthou, Jordan Murray and Nicole Levin Mesard were all promoted in the corporate department while Catherine Amirfar and Sean Hecker were promoted in the litigation group.

us report

ROUNDUP

Covington & Burling scooped a seven-lawyer private equity team for their New York offi ce from • O’Melveny & Myers, including former investment funds practice co-head Timothy Clark

Clyde & Co has closed the doors on its Los Angeles offi ce to launch in San Francisco, following a raid on • US fi rm Duane Morris for a 10-lawyer litigation team

New York partner for Shearman & Sterling Fred Sosnick is set to take up a newly created role as • management team co-ordinator to oversee the development of fi ve key areas, following the recent restructure and reduction of the management team at the fi rm

Morrison & Foerster has fi nally closed its struggling Orange County offi ce following the departure of • both its offi ce leader and another partner to Manatt, Phelps & Phillips

Peter Brown, the ‘Brown’ in Thelen Reid Brown Raysman & Steiner, will wave goodbye to the fi rm’s • New York offi ce when he leaves for Baker & Hostetler

King & Spalding has opened an offi ce in Austin. Robert Meadow, managing partner at the fi rm’s • 103-lawyer offi ce in Houston, will also head up the fi rm’s newest offi ce

National workplace law fi rm Jackson Lewis, based in White Plains, New York, has opened its third Florida • location with a new offi ce in Jacksonville, Florida, bringing its lawyer count to 470 attorneys in 36 cities

Major fi rm Weil, Gotshal & Manges is opening an offi ce in downtown Brooklyn, relocating staff members from • its fi nance, operations, and IT departments to 35,000 square feet of new space at 15 MetroTech Center

NEWS >>


UNITED STATES

Record results for US fi rms

As US fi rms ponder their prospects in less prosperous times, there

has been a reminder of just how good the ‘good old days’ of 2007 really were. American Lawyer’s Top 100 feature has revealed record profi ts for fi rms in 2007, with the top 100 as a group growing turnover by nearly 14%.

Measured in revenue terms, the top US fi rm was Skadden Arps, followed by Latham & Watkins and Baker & McKenzie. The top two fi rms each achieved revenue in excess of US$2bn.

In terms of profi tability, Wachtell, Lipton, Rosen & Katz is the place to be – especially if you happen to be a partner. Wachtell Lipton achieved an impressive US$4.95m profi t per equity partner, making it the most profi table fi rm in the US by a long margin. In second place was Cravath, Swaine & Moore with US$3.3m per partner and in third place was Sullivan & Cromwell with US$3.06m.

A fi ve-year run of remarkable growth for US fi rms has been capped off by 2007, which saw profi t per equity partner for the top 100 more than double to an average of US$1.3m. ALB

Top 10 US fi rms 2007 by revenue

Rank Firm Revenue ($USbn)

1 Skadden, Arps, Slate, Meagher & Flom

2.17

2 Latham & Watkins 2.01

3 Baker & McKenzie 1.83

4 Jones Day 1.44

5 Sidley Austin 1.39

6 White & Case 1.37

7 Kirkland & Ellis 1.31

8 Greenberg Traurig 1.20

9 Mayer Brown 1.18

10 Weil Gotshal Manges 1.17

Source: The American Lawyer

“However, the re-introduction of the bar examination would improve the quality of the profession,” he continued.

Misra also favours the opening up of the Indian market. “The entry of foreign law fi rms in India will impact merely 5–10% of law practice and in doing so will enrich and enhance the capabilities of corporate lawyers as well as the budding crop of lawyers in India,” he said. ALB

MALAYSIAMalaysian merger announced

Malaysian fi rm Azmi & Associates has announced a merger with

rival fi rm Illiayas. The merged entity, which will operate under the name Azmi & Associates, intends to have an international outlook and to serve local, regional and international clients. ALB

20

NEWS >>


MIDDLE EASTClyde & Co strengthens Middle-East presence

International fi rm Clyde & Co, a long-time Middle East player, has

announced fi ve new partners for its Middle East operations, bringing its total number of partners in the region to 19. This is part of an ambitious growth strategy – the fi rm plans to increase its partner count from 19 to 25 and recruit a further 50 associates within the next 12 months. The fi rm has offi ces in Dubai and Abu Dhabi in the UAE, and in Doha, Qatar. ALB

UPDATE >>

InternationalArbitration

ALB has invited both Drew & Napier LLC, International Arbitration Firm of the Year winner at the 2007 ALB SE Asia Law Awards, and Professor Steve Ngo to participate in a project to contribute 12 articles to ALB magazine on topical issues in international arbitration.

Welcome to the new series on international arbitration. In this fi rst instalment, let’s refl ect on the growth and development of Singapore’s arbitration industry.

Remembering the words of Lord Donaldson, it was said that ‘arbitrators and judges are in the business of dispensing justice; the judge in the public sector, the arbitrator in the private sector’, aptly called “the privatisation of justice”. While the concept of arbitration is very old, the present framework of a formal regulation dates back more than a hundred years in England. In the last three decades, it has transfi gured from a meagre form of alternative dispute resolution into an integral route for international business dispute resolution, forced by globalisation and rapid growth of international trade.

Since 1990, there has been much development locally. The fi rst formal initiative was the Attorney-General’s formation of a committee in 1991 to examine the existing arbitration laws, followed by the Law Reform Committee’s Sub-Committee review of the laws in 1993. Next, Singapore’s Economic Development Board introduced several initiatives arising from the business development exercise it undertook.

In terms of legal infrastructure, Singapore enacted the International Arbitration Act in 1995 and a ‘domestic’ Arbitration Act in 2001. The latter is a combination of the UNCITRAL Model Law and English Arbitration Act of 1996. Instead of a wholesale adoption of an English Statute, it combines with an international convention statute, but has also stayed internationally competitive.

While we have not sent anyone to space, our law undergraduates have certainly clinched prizes at the “Willem C. Vis” international arbitration moot competition year after year.

Arbitration in Singapore is incomplete without mentioning the Singapore International Arbitration Centre, established in 1991. Much credit for its success goes to its Deputy Chairman, Lawrence Boo. Today, SIAC speaks the language of “Singapore Inc” to go global and internationalise. In 2004, SIAC established collaboration with the Indian Construction Industry Development Council and in 2006, a cooperation with the International Centre for Dispute Resolution.

Singapore is also opening up to the international arbitration arena. Important names such as the ICC International Court of Arbitration and the Permanent Court of Arbitration have been associated with Singapore recently. Additionally, by 2009, a dedicated and integrated arbitration complex will house all international arbitral centres in a conducive and neutral setting. In the next issue, I will discuss the attractive incentives dished out by the Government for the sector, as well as look at what the next 20 years hold for the industry.

Prof. Steve K. Ngo is the Deputy Secretary-General of Trisakti Arbitration Institute, Trisakti University Law School and the Western Australian Institute of Dispute Management at the Murdoch University School of Law. He is an educator, consultant, arbitration practitioner and thinker. He does not hold himself out to practice Singapore laws. For feedback, he can be contacted at [email protected]

Mr Jimmy Yim, S.C., is the Managing Director of Drew & Napier LLC’s Litigation and Dispute Resolution Department. Consistently rated top tier in dispute resolution by international ranking organisations, Drew & Napier is one of Singapore’s leading and largest law fi rms. Mr Yim can be contacted at +65 6531 2505 or [email protected]

Mr Jimmy Yim, S.C

Prof. Steve K. Ngo

NEWS >>


CHINAChinese trademark fi lings increase

For the seventh straight year, China-based companies have increased the number of new fi lings for trademarks

in the US.A Dechert report reveals

Chinese companies fi led 1,750 applications with the US Patent and Trademark Offi ce in 2007, more than three times the amount

in 2003.Japan led its regional neighbours

with 2,920 new fi lings in 2007, down from 3,040 in 2006. After China, South

Korea and Taiwan registered about 1,000 new fi lings each.The Chinese trademark applications were for luggage,

electrical wiring, tools, kitchen accessories, clothing, engine parts, hotels and restaurants.

The report also noted that Chinese companies are fi ling trademark applications for their own homegrown brands, rather than adopting a more American-friendly name. Examples include luggage brand “Kongzhongniao”, which translates to “a bird is in the air”, and electrical wiring brand “Wuhandianzianerchang”, which means “fl ying crane”. ALB

US trademark applications fi led by China, Japan, Taiwan, South Korea 2000–07

FILINGS BY APPLICANTS FROM CHINA ►Year 2000 2001 2002 2003 2004 2005 2006 2007

New fi lings 320 340 420 510 910 1,150 1,420 1,750

Change over prior year

-- 7% 23% 21% 79% 26% 24% 23%

FILINGS BY APPLICANTS FROM JAPAN ►Year 2000 2001 2002 2003 2004 2005 2006 2007

New fi lings 3,050 4,530 2,750 2,910 3,230 2,950 3,040 2,920


-- 48% (39%) 6% 11% (9%) 3% (4%)

FILINGS BY APPLICANTS FROM TAIWAN ►Year 2000 2001 2002 2003 2004 2005 2006 2007

New fi lings 1,090 990 1,010 1,130 1,120 1,070 1,160 1,020


-- (9%) 2% 12% (1%) (4%) 8% (12%)

FILINGS BY APPLICANTS FROM SOUTH KOREA ►Year 2000 2001 2002 2003 2004 2005 2006 2007

New fi lings 730 660 660 650 490 690 820 1,090


-- (9%) 0% (1%) (25%) 40% 18% 33%

Source: Dechert

UPDATE >>

International Tax

The Australian Budget HighlightsThe Australian Treasurer, Wayne Swan, handed down the fi rst Rudd Government budget on 13 May 2008. It contained a package of tax relief measures designed to help families with education, child care and other living expenses, while means testing a range of benefi ts.

The government has announced the terms of reference for • a comprehensive review of Australia’s tax system.Previously announced personal income tax rates will go • ahead, as follows:The current proposed personal Tax Rates for 2008 and

thresholds for resident individuals (excluding the 1.5% Medicare levy) are:

Taxable Income ($) Taxable Pay ($)0 – 6,000 Nil

6,000 – 34,000 Nil + 15% of excess over 6,000

34,001 – 80,000 4,200 + 30% of excess over 34,000 (up from 30,001)

80,001 – 180,000 18,000 + 40% of excess over 80,000

180,001+ 58,000 + 45% of excess over 180,000

Families and individualsA 50% education tax refund will be available for eligible • education expenses from 1 July 2008.The proposed fi rst home saver accounts scheme has been • modifi ed to allow individuals to contribute up to $75,000 into their fi rst home saver account.The child care tax rebate for out-of-pocket child care • expenses will increase from 30% to 50% from 1 July 2008, with the maximum out-of-pocket expenses claimable increasing from $4,354 to $7,500 per child per year. Medicare levy surcharge thresholds and low income • thresholds will be increased.From 1 July 2008, an income threshold of $150,000 will • apply to dependency tax offsets.From 1 July 2008, the Baby Bonus will increase from $4,258 • to $5,000 and from 1 January 2009, eligibility for the Baby Bonus will be limited to families with an adjusted taxable income of $150,000.Eligibility for Family Tax Benefi t Part B will be limited to families • whose primary income earner earns $150,000 or less a year.A tax-exempt one-off bonus payment of $500 will be • provided to older Australians.The scope for family trusts to utilise tax losses to lower income • tax will be reduced.The Commonwealth senior’s health card income test will now • apply to certain superannuation stream income and salary sacrifi ced amounts.

Debbie Annells, Managing Director,AzureTax Ltd, Chartered Tax Advisers Suite 4708, The Center, 99 Queen’s Road, Central, Hong Kongwww.azuretax.com, a member of AzureTax Group(Tel) +852 2123 9339 (direct line), (Main Line) +852 2123 9370,(Fax) +852 2122 9209Registered with the Chartered Institute of Taxation for purposes of anti money laundering legislation.

Debbie Annells

22

NEWS | appointments >>

asian legal business ISSUE 8.6

LATERAL HIRES ►

Name Leaving Going to Practice Location

Simon Briscoe Norton Rose Clifford Chance Asset fi nance Singapore

Scott Calver Watson, Farley & Williams Lovells Corporate Singapore

Yukihiro Terazawa O’Melveny & Myers Morrison & Foerster IP, entertainment law Tokyo

Melanie Williams Norton Rose Ashurst Energy, project fi nance Singapore

PROMOTIONS ▲

Firm Name New role Location

Holman Fenwick Willan Chris Chan Partner Hong Kong

Holman Fenwick Willan Nicholas Poynder Partner Shanghai

Holman Fenwick Willan Barry Stimpson Partner Singapore

Holman Fenwick Willan Steven Wise Partner Hong Kong

Kennedys Christine Tsang Partner Hong Kong

Watson, Farley & Williams Damian Adams Partner Singapore

Watson, Farley & Williams Ratthakarn Boonnua Partner Bangkok

Weil, Gotshal & Manges Kevin Ban Partner Shanghai

Weil, Gotshal & Manges Anthony Wang Partner Shanghai

Norton Rose Clifford Chance

Aviation expert books fl ight to Clifford ChanceClifford Chance has continued to build its Singapore practice with the addition of Simon Briscoe, formerly of Norton Rose. Briscoe will join the fi rm’s asset fi nance team and will head up the Asian aviation practice. The fi rm has devoted considerable energy to its Asian operations, recently establishing an India practice based out of its Singapore offi ce – a move which will only bolster Singapore’s reputation as the gateway to India.

There have also been a couple of key relocations on the projects and fi nance front at Clifford Chance. Project fi nance specialist Joseph Tisuthiwongse is returning to the fi rm’s Bangkok offi ce as consultant after three years in the US, while energy and infrastructure partner Geraint Hughes will relocate to Hong Kong in June.

“The next wave of infrastructure, energy and transport projects is being unveiled around Asia, replacing older facilities and catering for increased demand,” said Huw Jenkins, Asia head of fi nance, Clifford Chance. “We are ensuring that our team has the right people in place to cope with the work anticipated in the years ahead.”

Big Asia focus for Holman Fenwick Willan British shipping specialist fi rm Holman Fenwick Willan has revealed its new partner appointments – and half of them are Asia based. They are Nicholas Poynder of the Shanghai offi ce, Chris Chan and Steven Wise of the Hong Kong offi ce, and Barry Stimpson of the Singapore offi ce.

Following a growing trend, particularly for UK fi rms, the fi rm has also made an appointment to what it describes as a “partner-equivalent position”. Kaare Langeland takes up the position of “senior manager” at the fi rm’s London offi ce.

In an era in which movements of senior lawyers between fi rms are all the more common, it is worth noting that half of HFW’s new partners trained and developed their careers at the fi rm.

O’Melveny & Myers Morrison & Foerster

Entertainment expert distracted by Morrison & FoersterJapan-based intellectual property attorney (bengoshi) and former O’Melveny & Myers partner Yukihiro Terazawa has joined Morrison & Foerster. However, Terazawa will be

practising with Morrison & Foerster’s Japanese joint venture partner, Ito & Mitomi. Morrison & Foerster was one of the fi rst international law fi rms to be licensed in Japan, opening its Tokyo offi ce in 1987. The fi rm’s Tokyo offi ce, led by the energised and energising Ken Siegel, is today in the top 10 of Japan’s largest law offi ces. The fi rm frequently works with Ito & Mitomi when advising on multi-jurisdictional transactions.

Kennedys appoints new partnerHealthcare and professional services expert Christine Tsang has been appointed as a partner at Kennedys Hong Kong. Tsang has extensive experience in areas such as medical malpractice and professional indemnity claims, and is currently an honorary legal adviser for the Hong Kong Medical Association.

Norton Rose Ashurst

Ashurst gains energy expertAnother fi rm which has been shopping at Norton Rose is Ashurst, which has appointed Melanie Williams as counsel in its Singapore offi ce. Williams, who specialises in energy projects and project fi nancing. was previously with Norton Rose’s projects and banking team in Singapore.

Weil Gotshal continues Asia growth with two new partners New York-based fi rm Weil, Gotshal & Manges has announced the promotion of Kevin Ban and Anthony Wang, both in the fi rm’s Shanghai offi ce, to partnership.

Both attorneys focus on cross-border private equity and M&A transactions, and are fl uent Mandarin speakers. The promotion marks a continued expansion for Weil Gotshal in Asia. The fi rm opened its Shanghai offi ce in 2004, its Hong Kong offi ce in 2007 and expects to open a Beijing offi ce in 2008. The fi rm has over 20 lawyers in Asia, focusing on both in-bound and out-bound deals for private equity fi rms and multinational corporates.

WFW Lovells

Watson, Farley & Williams loses senior corporate lawyer to Lovells … Scott Calver, former head of corporate department at the Bangkok offi ce of Watson, Farley & Williams, has joined the Singapore practice of Lovells. Calver’s areas of expertise include corporate and capital markets transactional and regulatory compliance work.

Joseph Tisuthiwongse

Yukihiro Terazawa

Christine Tsang

Holman Fenwick Willan

Kennedys

Weil, Gotshal & Manges

NEWS | appointments >>

23www.asianlegalonline.com

010001001110100110101001010100101011

010101110101110100010110100110101010

1001 0100010011101001101010010101001

010110101011101011101000101101001101IT report

Blackberry and iPhone updates on horizonIn news this week to excite those tied to their mobile e-mail, RIM, the BlackBerry company, has announced its next-generation device, dubbed “BlackBerry Bold”. The new handset features 3G mobile capabilities, wifi (802.11 a/b/g) and Bluetooth connectivity, a half-VGA (480x320 resolution) colour LCD, built-in GPS and a 2 megapixel camera. For those looking to use their BlackBerry as a music player, the device also allows the addition of an SD card and software to sync your iTunes play lists.

With such impressive specs, the only real competition in that space is likely to come from Apple’s iPhone. Vodafone and Singtel (Optus etc) have already announced that they will be carrying the device and the rumour mill is rife with stories of a 3G version.

Now lawyers will just have to convince their IT departments to support it.

Industry musical chairsJob-hopping has been a feature of the legal IT world over the past month. In Australia, Paul Wyatt joins the ranks of those moving on from LexisNexis Visualfi les. His new role is BDM for NSW with Law In Order, which specialises in litigation document management, e-discovery and document copying and scanning.

On the international front, Kaye Sycamore, one of the founders of Keystone (now Aderant), has resigned from her role as vice president international at Thomson Elite.

Sycamore is off to join start-up Chrome River with fellow Elite alumni Alan Rich, Dave Terry and Anne Becknell. Chrome River (www.chromeriver.com) looks interesting. It’s a law fi rm-orientated expense reporting system, utilising the still emerging (at least for law fi rms) model of software as a service. We really like the way their products page has customised pitches for CFOs, CTOs, managing partners, lawyers, practice group leaders and others.

Microsoft release XP SPFor the law fi rms still using Windows XP (that’s almost everyone), Microsoft has released Service Pack 3 as an automated download. As with any of Microsoft’s service packs, it’s probably worth waiting a few months until the not insubstantial bugs are ironed out. The most signifi cant appears to be an issue where systems are going into an eternal reboot cycle. From the discussions on the web, the issue appears to be related to AMD processors although Microsoft is yet to issue an offi cial statement on the matter.

New practice management playerClickone, a new practice management product, has quietly slipped into the Australian market (www.clickone.com.au). The software, which appears to be aimed at small to medium-sized law fi rms, claims to be able to provide time recording, trust accounting, billing, contacts management and matter management.

A little digging on the domain name reveals that the business is owned by J Cheng and B Janowski, both partners at Australian fi rm Berrigan Doube Lawyers. It will be interesting to see how the product fares or whether it will simply be sucked into the LexisNexis vortex like everything else.

DocsCorp partners with DocAutoAustralia-based fi rm DocsCorp has continued its impressive foray into the international market with the announcement of an alliance with similarly branded US fi rm DocAuto. DocAuto is primarily known for its Interwoven Worksite plug-ins to enable “matter-centric” work, but had also previously developed a PDF application, MakePDF. The deal means that DocAuto will discontinue development of MakePDF, with current users being offered special pricing to migrate to the DocsCorp product, pdfDocs. With DocAuto’s client base of over 300 law fi rms, the move will give DocsCorp access to an even greater chunk of the US market.

Chris McLean is an IT specialist, former lawyer and currently director of information management at Sparke Helmore. E-mail [email protected]

Watson Farley & Williams

… but gains two new Asia partners Watson, Farley & Williams has announced nine promotions to partnership worldwide, with two based in Asia. They are Damian Adams, of the International Corporate Group in Singapore, and Ratthakarn Boonnua, of the International Litigation Group in Bangkok.

Various Broad & Bright

Broad & Bright to boost corporate workBeijing-headquartered Broad & Bright has appointed John Chu, former head of legal at General Motors in Beijing, and Lawrence Guo, previously a senior associate with Freshfi elds Bruckhaus Deringer in Beijing, as partners. The fi rm now has nine partners in total.

Both new partners have extensive experience in handling foreign investment and corporate matters, and are set to give a boost to the fi rm’s expertise in corporate practices.

Lehman, Lee & Xu Grandall

Grandall adds one in BeijingGregory Sy has joined Grandall Legal Group in Beijing as a partner and foreign counsel from Lehman, Lee & Xu. His practice includes general business advisory for SME businesses in China, particularly in the areas of international corporate structuring and transactions. He has represented clients such as the Consulate of the United States of America in China, the Embassy of Brazil, various publicly listed companies, along with numerous SMEs operating in a wide range of industries. Sy is admitted to the New York Bar.

TDK China Otsuka China

Otsuka China hires head of legal from TDKThe former legal manager at TDK’s Greater China regional headquarters in Shanghai, Daniel Zhang, has decided to head the in-house legal team at Otsuka (China) Investment. Fully owned by Japan Otsuka Pharmaceutical, Otsuka (China) Investment is responsible for investing and managing Otsuka’s invested enterprises in China.

“The pharmaceutical industry in China is signifi cantly growing. As [one of the] top fi ve pharmaceutical companies in Japan, Otsuka China will create an increasing amount of challenging and diverse legal work for its in-house legal team,” said Zhang.

John Chu

Daniel Zhang

24

NEWS | regional update >>


entering into an indefi nite term labor contract by terminating an existing employment relationship and creating a new employment relationship with the same employee through corporate restructuring. The Draft Regulations clarify this issue somewhat and state that if an employee moves to a new employer because of administrative orders, corporate plans or other reasons not caused by the employee, the employee’s seniority with his/her old employer will count towards the 10 year period for the creation of a fi xed term labor contract. This will prevent an employer from moving its employee to an affi liate to reset the clock for the 10 year period.

The Draft Regulations are unclear as to whether an employee’s existing seniority will count towards the 10 year period if the employee’s employment relationship is terminated and then recreated with the same employer, but the answer will likely be yes under the fi nal version of the Draft Regulations, as a termination and recreation of employment relationship with the same employer is a more blatant violation of the policy objective behind the PRC Labor Law.

While the Draft Regulations are still subject to further comments and changes, the policy objective of the PRC legislators is clear – to protect employees’ entitlement to indefi nite term labor contracts and limit the ability of employers to circumvent this entitlement.

Written by Jeanette Chan, partnerDavid Lee, associatePaul, Weiss, Rifkind, Wharton & Garrison

For more information please contact:Paul, Weiss Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Offi ce Tower ANo. 7 Dong Sanhuan ZhongluChao Yang District, Beijing 100020PRCJeanette K. Chan, partner Email: [email protected] Ph: (8621) 5828-6300 or (852) 2536-9933

On May 8, 2008, the Legislative Affairs Offi ce of the State Council issued the Draft Implementing Regulations for the PRC Labor Contract Law (the “Draft Regulations”) for public comment. This article focuses on the Draft Regulations’ attempt to close certain loopholes in the PRC Labor Contract Law (the “Labor Law”) that may allow an employer to avoid circumstances in which an indefi nite term labor contract must be put into place with its employee.

Indefi nite term labor contracts do not have an expiry date and will continue to be in force until they are terminated by the employer, the employee or by operation of law. Because indefi nite term contracts cannot be terminated generally unless for reasons that are specifi cally permitted under the Labor Law, these contracts are generally not favored. Employers prefer fi xed term contracts with shorter terms that terminate on the expiry date set out in the contract. The Labor Law acts out situations in which an indefi nite term labor contract must be put into place in order to prevent the avoidance of the requirements. For example, when an employer and an employee have entered into a fi xed term labor contract for two successive terms, the third successive contract will be deemed as an indefi nite term labor contract unless the employee requests for a fi xed term labor contract. In addition, when an employee has worked for an employer continuously for 10 years or more, an indefi nite term labor contract should be executed unless the employee requests for a fi xed term labor contract.

The Labor Law is ambiguous as to whether an employer can avoid R

egio

nal

updat

es

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

CHINAPaul Weiss

PHILIPPINESSyCip SalazarHernandez & Gatmaitan

MALAYSIATay & Partners

INDIASingh & Associates

SINGAPORELoo & Partners

CHINA

Draft Implementing Regulations for the PRC

Labor Contract Law Close Possible Loophole



The National Economic Development Authority (NEDA) has issued Guidelines and Procedures for Entering Into Joint Venture (JV) Agreements between Government and Private Entities. The Guidelines, which will take effect on May 2, 2008, were promulgated pursuant to the mandate given to NEDA under Section 8 of Executive Order No. 423, dated April 30, 2005.

The Guidelines apply to all government-owned and/or controlled corporations (GOCCs), government corporate entities (GCEs), government instrumentalities with corporate powers (GICPs), government fi nancial institutions (GFIs) and state universities and colleges (SUCs) which are expressly authorized by law or their respective charters to enter into joint venture agreements. However, Local Government Units (LGUs) are not covered by the Guidelines, as well as transactions of government fi nancial institutions (GFIs) in the ordinary course of business as part of their normal and ordinary banking, fi nancial or portfolio management operations. Activities covered under the joint venture agreements must be directly related to the primary corporate purpose, mandate or charter of the government entity. More importantly, the joint venture should not crowd out private sector initiative in the particular industry.

Full freedom is accorded the government entity with respect to the extent and duration of its participation in the joint venture. The Guidelines expressly provide that there are to be no barriers for the government’s withdrawal of its contribution to the

PHILIPPINES

Guidelines for Entering into Joint Venture

Agreements between Government and Private

Entities Approved

joint venture. In this regard, the mobility of government entities is enhanced and protected with respect to their participation in joint venture agreements entered into with the private sector. As such, the private sector is then allowed to completely take over the project once the government entity divests itself of its investment in the joint venture, setting it apart from the other modes of procurement, where control and ownership ultimately belongs to the government.

A win-win situation for all parties is envisioned under the Guidelines. On the one hand, the government entity enjoys the freedom to enter into such agreements to accomplish national development goals and objectives, at the same time enjoying returns on its investment, without being compelled to remain in such an arrangement (having full discretion when and if to divest itself of its participation in the same). On the part of the private entity, not only can it maximize its profi ts, it is also free to control the direction of the project upon the government entity’s withdrawal from the venture.

In formulating the Guidelines, the NEDA has taken into account the objectives of the administration to promote transparency in such transactions as well as to encourage the pooling of resources and expertise between the public and private sector. The passage and adoption of the Guidelines by the NEDA is expected to further a fruitful and viable collaboration between government and the private sector in the attainment of national development objectives.

Written byLiza Michelle E. Ramos

SYCIP SALAZAR HERNANDEZ AND GATMAITANSSHG Law Centre, 105 Paseo de RoxasMakati City, Manila, PhilippinesTel: +63-2-817-98-11Fax: +63-2-817-38-96E-mail: [email protected], [email protected]: www.syciplaw.com

The Companies (Amendment) Act 2007 (“CAA”) which came into operation on 15 August 2007, brought some welcomed changes to the Companies Act 1965 (“CA”).

Chief among this is the deletion of Section 132G which generally prevented a company (“Acquirer”) from entering into any arrangement or transaction to acquire the shares or assets of another company (“Target Company”) in which a shareholder or director of the Acquirer or a person connected to such shareholder or director (“Relevant Person(s)’), has a substantial shareholding, unless the arrangement or transaction was entered into 3 years after the Relevant Person(s) fi rst held shares in the Target Company or after the assets were fi rst acquired by the Target Company. Although the intention of Section 132G was to prevent any abuse which may arise due to the Relevant Person(s)’ interest in the Target Company, it also had the effect of stifl ing legitimate transactions since not even the shareholders’ approval in a general meeting could save such transactions.

Notwithstanding the deletion of Section 132G, the safeguards against the abuse which Section 132G was aimed at can be found in other provisions in the CA such as Sections 131 and 132C. Section 131 requires a director of a company who is interested in a contract or proposed contract with the company, to disclose his interest. This could arguably include a situation where the director has a substantial shareholding in the other contracting corporation. Section 131A (which was incorporated by the CAA), further requires an interested director to abstain from voting on such contract or proposed contract. Section 132C

MALAYSIA

Developments in Companies Law

26



requires the company’s approval in a general meeting for arrangements or transactions involving the acquisition of an undertaking or property of a substantial value by the company or the disposal of a substantial portion of the company’s undertaking or property.

With these changes, the minority shareholders’ interest is still protected without unduly hindering the company’s ability to undertake legitimate transactions.

Written by Ng Pek Wan

Ng Pek WanSenior Associate of Corporate & Commercial PracticeTel: + 603 -2050 1888DID: + 603 -2050 1968Fax: +603- 2031 [email protected]

Singapore Exchange Limited (SGX) on April 18 announced the offi cial of its Beijing representative offi ce, which helps to attract more China listing and increase the profi le of SGX.

Having a physical presence in the country will help to meet the goal of enhancing the ability to meet the funding needs of Chinese companies. The Chairman of SGX, Mr J Y Pillay, believes that this representative offi ce will contribute to the continued strengthening of ties between SGX and the regulatory authorities as well as the business community in China, leading to reciprocal benefi t.

The new representative offi ce is located in the Excel Centre, in Beijing’s fi nancial district. The new offi ce is headed by Mr Lloyd Loh, who has been the point man for the SGX’s business in China since 2006. His objectives as

SINGAPORE

Singapore Exchange opens Beijing

representative offi ce

the chief representative will be to gain a better understanding of Chinese investors’ needs, such as those of QDII funds, and to deepen the SGX’s appreciation of the Chinese capital market and fund-raising needs of Chinese enterprises. For more details of the new offi ce, please visit the SGX website (www.sgx.com).

The market of PRC is today one of the world’s most important markets for all countries, and it will continue to provide listing opportunities. The China Securities Regulatory Commission ruled in July last year to allow overseas exchanges to set up representative offi ces in China, but the SGX has been actively marketing itself to Chinese companies since the early 1990s. Many Chinese companies expanding beyond their domestic market have chosen Singapore as their springboard to the region by listing on the Singapore exchange. As of 31 March 2008, SGX has a total of 141 China companies which represent 13 per cent of the total number of the exchange listed with a total market capitalisation of S$45.1 billion. The list includes Yanlord Land Group, a developer of high-end residential properties in China, and CapitaRetail China Trust, the world’s largest China real estate investment trust.

Written by Ms Eng Hui Ting & Ms Chen Shu

Ms Eng Hui TingCorporate Finance ExecutivePh: (65) 6322-2237Fax: (65) 6534-0833E-mail: [email protected]

and

Ms Chen ShuLegal Executive, Corporate PracticePh: (65) 6322-2230Fax: (65) 6534-0833E-mail: [email protected]

Loo & Partners88 Amoy Street, Level ThreeSingapore 069907

India is in the fi nal phase of compliance to the obligations under the WTO treaty on Trade Related Aspects of Intellectual Property Rights (TRIPS) and recently implemented the guidelines for border protection for infringing goods under “Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007”. While the mandatory obligations under Articles 51 to 60 of the TRIPS dealing with border measures are restricted to Copyright and Trade Marks infringement only, the said Rules deal with Patents, Designs and Geographical Indications violations as well, in conformity with the practice prevailing in some other countries, notably EU countries.

The said Rules, inter alia, provide for

(i) the fi ling of a notice by the right holder;

(ii) registration of said notice by the Customs;

(iii) a time limit for right holders to join proceedings;

(iv) a single point for registration of the notice fi led by the right holder;

(v) adequate protection to the rightful importer;

(vi) adequate protection to the Customs for bonafi de act;

(vii) suo-moto action by the Customs in specifi ed circumstances;

(viii) disposal of the confi scated goods.(ix) no action against goods of non

commercial nature contained in personal baggage or sent in small consignments intended for personal use of the importer.

The right holders are required to give a notice for registration to any one of the Commissioners of Customs at the ports where counterfeit goods are likely to be

INDIA

Customs recordation of Intellectual Property

Rights in India



imported infringing the IPR in respect of any trademark, copyright, patent, design or geographical indication. The grant of registration by Customs is subject to the execution of a bond, along with surety and security by the right holder undertaking to protect the importer, consignee, the owner of the goods and the competent authorities against all liabilities and to bear the costs towards destruction, demurrage and detention charges incurred till the time of destruction or the disposal of the infringing goods. The registration is also subject to execution of an indemnity bond by the right holder indemnifying the Customs authorities against all liabilities and expenses on account of suspension of the release of allegedly infringing goods.

Registration of an IP Right may be granted for a minimum period of one year unless the right holder wants the same for a lesser period and for a maximum of fi ve years; lapse whereupon a fresh registration may be obtained.

With the above, India is fi nally meeting its obligations under the TRIPS Agreement and also ensuring to provide a conducive environment for protection of Intellectual Property Rights.

Written by Sumita Singh

Singh & AssociatesN-30, Malviya Nagar New Delhi-110017INDIAPhone: +91-11-26680927, +91-11-26687993, +91-11-26680331Fax: +91-11-26682883website: www.singhassociates.in

28

FEATURE | ALB 50 >>


AUSTRALIA

CHINA

HONG KONG

INDIA

JAPAN

KOREA

NEW ZEALAND

SINGAPORE

UK

US

28

Were Frank Sinatra still alive, it is doubtful that he would have chosen to sing about 2007 as having been

“a very good year”. To be fair, it was no annus horribilis. Yet last year was also the fi rst time in recent memory when the world saw wobbles in the global economy in the form of the sub-prime mortgage meltdown in the US, rising oil prices out of the Middle East, and in countries such as Australia the distant but increasingly real spectre of ‘stagfl ation’ – that unenviable vicious cycle of rises in infl ation, interest rates and unemployment.

Against this backdrop, then, it is fascinating to watch the maturation of Asia’s legal and fi nancial markets which have so far escaped the worst impacts of the global credit crunch. According to a report by Merrill Lynch’s TJ Bond, Asian markets, and especially those of China, are likely to remain largely unaffected, thanks in no small part to their happy isolation from more turbulent credit markets. Only 4% of outstanding global credit is accounted for in Asia, the report notes: “Compared to the US, we think Asia stands at very different points in its investment, credit and housing cycles.

The market for domestic credit is not globalised, and not subject to contagion as the US credit cycle turns down.” While down considerably from its 5,000-plus highs, the Shanghai Stock Market Index is still well up from the beginning of 2007.

Likewise, while the recent earthquake in China’s Sichuan province was a human tragedy on a massive scale, economists and bankers do not see the event having any major long-term effect on the Chinese economy. The area where the quake took place is not a manufacturing centre and did not have a major impact on the country’s transportation network, although Merrill Lynch did note that some supply shortages might cause temporary regional infl ation spikes.

Despite all this, not everyone is sanguine about the prospect that the very dynamic, very good times will

ALB makes every effort to ensure fi rms likely to appear in the ALB 50 are contacted. Firms were requested to provide accurate data promptly. The arrows in the ranking column show numerical changes compared to last year but in no way indicate a qualitative change.

China remains the keystone of the region, but dynamic younger players are nipping at its heels

THE ALB

ASIA’S LARGEST LAW FIRMS

ASIA’S 50 LARGEST FIRMS BY COUNTRY ►

FEATURE | ALB 50 >>


FEATURE | ALB 50 >>

ALB 50: ASIA’S LARGEST FIRMS ►Rank Firm Total lawyers

& partners*Country of origin

Managing partner Total lawyers*

Total partners*

Offi ces in Asia

Total offi ces worldwide

1 Minter Ellison 1,100 Australia Multiple 802 298 3 13

2 Baker & McKenzie 1,075 US David Jacobs 760 315 14 70

3 Mallesons Stephen Jaques 1,059 Australia Multiple 289 19 3 9

4 Allens Arthur Robinson 891 Australia Jim Dunstan 705 186 10 15

5 Clayton Utz 867 Australia Multiple 643 224 6 6

6 Freehills 843 Australia John Curtis, John Dick 627 216 8 8

7 DLA Phillips Fox 779 Australia/NZ Alastair Da Costa 619 160 14 64

8 Blake Dawson 768 Australia N/A 590 178 2 8

9 King & Wood 650 China Wang Junfeng 500 150 13 15

10 Da Cheng Law Offi ces 552 China Wang Zhongde 331 221 14 14

11 Corrs Chambers Westgarth 524 Australia John Denton 408 116 5 5

12 Deacons 472 Hong Kong Don Boyd 262 210 5 11

13 Amarchand & Mangaldas & Suresh A Shroff & Co

430 India Shardul Shroff 390 40 5 5

14 Beijing Deheng 406 China Wang Li 332 74 13 13

15 Nishimura & Asahi 395 Japan Akira Kosugi 318 77 1 1

16 Kim & Chang 380 Korea Young Moo Kim 260 120 4 4

17 Grandall Legal Group 372 China Lv Hongbing 279 93 9 9

18 Mayer Brown JSM 370 US Elain Lo 300 70 7 21

19 FoxMandal Little (FML) 366 India Som Mandal 315 51 10 10

20 Jun He 336 China Xiao Wei 262 74 5 6

21 Mori Hamada & Matsumoto 323 Japan Multiple 250 73 3 3

22 Anderson Mori & Tomotsune 320 Japan Multiple 256 64 2 2

23 Linklaters 308 UK Giles White 260 48 6 30

24 Nagashima Ohno & Tsunematsu 305 Japan Kenichi Fujinawa 244 61 1 1

25 Bae, Kim & Lee LLC 290 Korea YS Oh 229 61 4 4

26 Middletons 289 Australia Nick Nichola 230 59 2 2

27 Freshfi elds 277 UK Multiple 253 24 6 27

28 HWL Ebsworth Lawyers 263 Australia Juan Martinez 165 98 4 4

29 Gadens 256 Australia Multiple 256 112 7 7

30 Allen & Gledhill 250 Singapore Lucien Wong 147 103 1 1

31 Guang He 249 China Luan Shaohu 184 65 2 3

32 Allen & Overy LLP 247 UK Brian Harrison 190 57 6 28

33 WongPartnership LLP 240 Singapore Dilhan Pillay Sandrasegara 176 64 4 4

34 Lee & Ko 237 Korea Yong Suk Yoon 154 83 3 3

35 Hunt & Hunt 229 Australia Maureen Peatman 156 73 11 11

36 Bell Gully 223 New Zealand Roger Partridge 180 43 2 2

37 Herbert Smith 219 UK Ashley Alder 182 37 8 12

38 Zhong Lun 217 China Zhang Xue-Bing 135 82 5 5

39 Jones Day 216 US Multiple 159 57 7 30

40 Morrison & Foerster LLP 212 US Multiple 165 47 5 17

41 Chapman Tripp 211 New Zealand Andrew Poole, Mark Reese 160 51 3 3

41 Dibbs Abbott Stillman 211 Australia Alan McArthur, Duncan Hart 141 70 5 5

43 Paul, Hastings, Janofsky & Walker 201 US Multiple 158 43 4 18

44 Maddocks 192 Australia David Rennick** 142 50 2 2

45 Yoon Yang Kin Shin & Yu 181 Korea Multiple 119 62 1 1

45 Luthra & Luthra 181 India Rajiv K Luthra 155 26 3 3

47 Henry Davis York 178 Australia Stephen Purcell 130 48 1 1

48 McCullough Robertson 170 Australia Brett Heading, David Goener 135 35 2 2

48 Shin & Kim 170 Korea Doo-Sik Kim 125 45 1 1

50 Tahota 162 China Cheng Shoutai 140 22 4 4* Numbers in Asia ** From 1 July

30

FEATURE | ALB 50 >>


CHINA ►Rank Firm Total lawyers

& partnersManaging partner Total lawyers Total partners Offi ces

1 King & Wood 650 Wang Junfeng 500 150 13

2 Da Cheng Law Offi ces 552 Wang Zhongde 331 221 15

3 Beijing Deheng 406 Wang Li 332 74 10

4 Grandall Legal Group 372 Multiple 279 93 9

5 Jun He 336 Xiao Wei 262 74 5

6 AllBright 257 Shi Huanzhang 195 62 4

7 Guang He 249 Tong Xin 184 65 2

8 Zhong Lun 217 Zhang Xue-Bing 135 82 5

9 Jingtian & Gongcheng 174 Zhang Xusheng 123 51 3

10 Tahota 162 Cheng Shoutai 140 22 4

continue to roll for law fi rms operating in China and Asia, as a consequence of both the global economic turmoil eventually bleeding into the Asian economies and the natural maturing of the Chinese legal market.

“The market in China is going to become increasingly competitive and an increasing number of fi rms are going to attempt to make a go of it over here,” predicts David Jacobs, Asia-Pacifi c regional chairman of Baker & McKenzie.

“But if there’s a global economic slowdown then that’s going to affect law fi rms simply because there’ll be fewer deals and more fi rms competing for them.”

Any slowdown in work will likely pluck the low hanging fruit of late arrivals fi rst, suggests Robert Lewis, managing partner of UK-based Lovells’ Beijing offi ce. “A lot of fi rms coming from places such as the US have come in riding the crest of a very good wave in their home markets.

“Now with many of these fi rms, especially those from the US, fi nding themselves affected, this slowdown – if and when it comes – means it’s possible that in 2009 and 2010 we’ll see fi rms revisit their level of investment, possibly leading to some retrenchment as they fi nd their initial investment is unsustainable in terms of getting an offi ce in China up and running and moving independently.”

All this, he suggests, is part of a natural maturing of the Chinese legal market which will make it increasingly diffi cult for new entrants to catch up with established players.

The other major challenge for law fi rms of all stripes, whether fi rmly established or just opening in China (and in a number of other Asian jurisdictions such as Singapore, whose recent deregulation of the legal market has sparked a new wave of competition and talent wars), is fi nding qualifi ed staff who can produce quality work in a bilingual, bicultural environment and ensure a quality product that enhances, rather than detracts from, a consistent client experience.

While many local Chinese fi rms have experienced meteoric growth, anecdotal evidence suggests that this growth has lately been accompanied by a concern that some fi rms have “grown too fast” and that work product has, as a result, suffered.

“For us as a foreign fi rm, the talent pool is still very limited because everyone is looking for essentially the same candidate,” says Lovells’ Lewis, referencing the dream lawyer who is “bilingual, bicultural, and can do deals in and out of China”.

“The challenge for some of the largest China fi rms is that they’ve grown very very quickly and in this market where there isn’t a lot of ready-made talent, obviously there aren’t a lot of people in that category. But I do feel that over the past few years we haven’t only remained in a competitive position on the hiring front but that the talent pool has expanded a bit.”

Entangling alliancesNearly a quarter century after the words were spoken, it is hard to believe that in 1984 then Australian prime

AUSTRALIA/NEW ZEALAND

INTERNATIONAL

ASIA

ASIA’S 50 LARGEST FIRMS BY SECTOR ►

FEATURE | ALB 50 >>


JAPAN ►Rank Firm Total lawyers


1 Nishimura & Asahi 395 Akira Kosugi 318 77 1

2 Mori Hamada & Matsumoto 323 Multiple 250 73 3

3 Anderson Mori & Tomotsune 320 Multiple 256 64 2

4 Nagashima Ohno & Tsunematsu 305 Kenichi Fujinawa 244 61 1

HONG KONG ►Rank Firm Total lawyers


1 Deacons 177 Lindsay Esler 113 74 11

2 Woo Kwan Lee & Lo 77 William CY Kwan 47 30 4

3 Wilkinson & Grist 47 N/A 25 22 2

4 Gallant YT Ho & Co 40 Amanda Liu 23 17 4

5 Robertsons 25 Christopher Gordon 15 10 2

6 Arculli Fong & Ng 24 Ronald Arculli 11 13 1

7 Stevenson Wong & Co 20 N/A 11 9 2

8 Tanner De Witt 19 N/A 13 6 1

9 Hampton Winter & Glynn 18 N/A 11 7 1

10 Boase Cohen & Collins 15 Colin Cohen 8 7 1

11 So Keung Yip & Sin 13 N/A 7 6 2

32

FEATURE | ALB 50 >>


minister Bob Hawke found himself in political strife after he declared that his country’s future security and prosperity depended upon Australia becoming “fi rmly enmeshed with the progress of China, South East Asia and the Pacifi c region”. The liberalisation of economies from China right through Vietnam, Indonesia and India, and the interconnected resource and consumer spending booms such reforms have touched off, have made such an economic enmeshment not only a reality but a necessity.

Such enmeshment is occurring more and more in the legal industry as well, and is likely to continue through 2008 and beyond as Australian, British and American law fi rms team up with local Asian counterparts to create strategic alliances of one sort or another. Last year, the exclusive alliance between DLA Piper and Australian fi rm Phillips Fox made headlines; lately, such deals have been picking up pace. Recently signed alliances have seen

Sydney-based Gilbert + Tobin team up with Chinese giant King & Wood at the end of last year – a move which was in many ways the formalisation of a relationship that had dated back to at least 2005 when the two fi rms worked on several competition and telecommunications projects together – and UK-based Lovells build the Sino-Global Legal Alliance with nine leading independent Chinese law fi rms.

As Danny Gilbert, managing partner of Gilbert + Tobin, told ALB soon after inking his fi rm’s deal with King & Wood (which itself teamed up with Japanese fi rm Miyake Yamazaki in 2005): “For them to entertain relationships with one of the major global fi rms, I think would cause them some tension because global fi rms have their own strategies about establishing the dominance of their own brand.”

To put it another way, legal alliances can be compared to those between airlines, with regional carriers able

to grow their own traffi c by teaming up with non-competitors who can feed passengers, or clients, into other markets. And while in the long run the best of these alliances will be those which bring together complementary, rather than competing, skill sets, in the shorter and more medium term, such groupings will likely have the further effect of tying up and solidifying the Chinese market.

Go (south and) west, young man!But while China certainly is, and will remain, the dominant player in the Asian legal market for a long time, the rest of the region is also poised for growth. But as that market matures, law fi rms which have already established themselves in that country are looking to consolidate their positions in Asia by growing elsewhere in the region, while many newcomers are attracted by the dynamism and fl uidity which exists in India and South East Asia.

KOREA ►Rank Firm Total lawyers


1 Kim & Chang 380 Young Moo Kim 260 120 4

2 Bae, Kim & Lee LLC 290 YS Oh 229 61 4

3 Lee & Ko 237 Yong Suk Yoon 154 83 3

4 Yoon Yang Kim Shin & Yu 181 Several 119 62 1

5 Shin & Kim 170 Doo-Sik Kim 125 45 1

THAILAND ►Rank Firm Total lawyers


1 Siam Premier 60 Phisud Dejakaisaya 44 16 1

2 Tilleke & Gibbins 58 Multiple 45 13 4

3 Chandler & Thong-Ek 33 Albert T Chandler 24 9 1

4 Kanung & Partners 26 Pricha Songsamphan 22 24 1

5 Blumenthal Richter & Sumet 21 Andreas Richter 17 4 1

TAIWAN ►Rank Firm Total lawyers


1 Lee & Li 141 CV Chen 118 23 5

2 Formosa Transnational 57 Ya-Fen Lin 39 18 2

3 Formosan Brothers 46 Several 28 18 1

4 LCS & Partners 40 Rich Lin 27 13 1

5 Tsar & Tsai 38 Jackie S J Lin 23 15 1

FEATURE | ALB 50 >>


PHILIPPINES ►Rank Firm Total lawyers


1 SyCip Salazar Hernandez & Gatmaitan 122 Llewelyn L Llanillo 81 41 4

2 Angara Abello Concepcion Regala & Cruz 111 Eusebio V Tan 76 35 3

3 Romulo Mabanta 74 N/A 26 48 2

4 Picazo Buyco Tan Fidler & Santos 56 Antonio A Picazo 36 20 1

5 Villaraza & Angangco 61 Multiple 40 21 1

6 Quisumbing Torres 52 Ricardo Castro Jr 34 18 1

7 Sigulon Reyna Montecillo & Ongsiako 47 Multiple 20 27 1

INDONESIA ►Rank Firm Total lawyers


1 Hadiputranto, Hadinoto & Partners 67 Sri Indrastuti (Tuti) 53 14 1

2 Soewito Suhardiman Eddymurthy & Kardono

51 Dyah Soewito 42 9 1

3 Ali Budiardjo Nugroho Reksodiputro 43 Mardjono Reksodiputro 30 13 2

4 Makarim & Taira S 41 N/A 36 5 1

5 Lubis Ganie Surowidjojo 39 Multiple 35 4 1

6 Mochtar Karuwin & Komar 32 N/A 25 7 1

7 Soemadipradja & Taher 24 Rahmat Soemadipradja 19 5 1

34

FEATURE | ALB 50 >>


Illustrating the money fl ows through India’s legal community, FoxMandal Little, India’s largest entry to this year’s ALB 50, recently announced dramatic salary increases across the board for its lawyers. Associates and senior associates will receive an increase of between 50% and 100%, while partners have seen an increment of between 30% and 60%. Salaries for newly qualifi ed lawyers, meanwhile, have gone up by 45–50%.

Meanwhile, a confl uence of factors – from continued liberalisation in Vietnam, which has in the very recent past been the scene of a number of equitisation deals as the government in Hanoi seeks to divest itself of centralised control and ownership of the economy, to resource and manufacturing booms (complemented by increasing political stability) in nations like Indonesia – have made these countries attractive centres for dealmaking fi rms from Europe, the UK and Australia.

September’s sale of a 10% stake in Bao Viet, Vietnam’s leading (and state-owned) insurance fi rm marked not only

the biggest M&A deal in the country’s history but has opened the fl oodgates to a tranche of other work. A report released in May by the Australian Strategic Policy Institute noted that while Indonesia has enjoyed impressive and sustained economic growth over the past several years, that growth is more impressive in that it takes place against a backdrop of decreasing government debt and relatively stable infl ation.

Even smaller nations such as Cambodia – which since 2000 has experienced an average 9.6% growth rate and last year saw foreign direct investment of US$600m – are attracting major players such as Allens Arthur Robinson, which has had a presence in that nation for over a decade and today has four lawyers on the ground there, including one new partner freshly minted as this magazine went to press.

South East Asia is particularly poised for growth, says Allens Arthur Robinson’s Jim Dunstan, executive partner in charge of the fi rm’s Asian operations. “China is still vast and,

because of its size and the amount of money involved, that’s going to be the natural target for really big work. But Indonesia, in particular, we think is a very exciting market going forward, with its large and growing resources practice, as are Vietnam and Cambodia, where large resource transactions are also starting to happen.”

Says Dunstan: “I think South East Asia is really starting to come into its own after a diffi cult period.” ALB

INDIA ►Rank Firm Total lawyers


1 Amarchand & Mangaldas & Suresh A Shroff & Co

430 Shardul Shroff 390 40 5

2 FoxMandal Little (FML) 366 Som Mandal 315 51 10

3 Luthra & Luthra 181 Rajiv K Luthra 155 26 3

4 Khaitan & Co 157 Multiple 127 30 4

5 J Sagar & Associates 137 Bergis Desai 111 26 5

MALAYSIA ►Rank Firm Total lawyers


1 Zaid Ibrahim & Co 135 Chew Seng Kok 94 41 9

2 Shearn Delamore & Co 94 Wong Sai Fong 53 41 2

3 Shook Lin & Bok 91 Too Ying Heap 63 28 1

4 Skrine 75 Lee Tat Boon 43 32 1

5 Zul Rafi que & Partners 63 Dato' Zulkifl y Rafi que 34 29 1

“The market in China is going to become increasingly competitive and an increasing number of fi rms are going to attempt to make a go of it over here”

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Firm makes signifi cant commitment to the Middle East Region with a second Middle East offi ceWongPartnership LLP, one of the law fi rms in Singapore, has opened a new overseas offi ce in Abu Dhabi making it its second Middle East branch in the fl ourishing Gulf Cooperation Council (GCC) region. As one of the most prominent Asian law fi rms, WongPartnership has continually pursued global opportunities, fi rmly establishing its footprint overseas. The Abu Dhabi offi ce is the Firm’s third overseas offi ce after its Qatar offi ce which opened in May 2007, and Shanghai offi ce, established in 2004.

With over US$2 trillion worth of projects in the pipeline, the oil-rich GCC consists of some of the world’s fastest-growing economies. Recognising the tremendous growth potential in this region and the affl uence of Abu Dhabi, the richest city in the world, WongPartnership has established the Abu Dhabi offi ce as the centre of its Middle East operations.

WongPartnership, fi rst established in 1992, has rapidly expanded to become one of the largest law fi rms in Singapore, seeing a several-fold increase from 11 lawyers to over 230 lawyers within a short span of 16 years. WongPartnership has been consistently recommended by esteemed research publications and journals such as the International Financial Law Review 1000 – The Guide to the World’s Leading Financial Law Firms, Chambers Global – The World’s Leading Lawyers for Business and The Asia Pacifi c Legal 500 as a top Singapore law fi rm across all practice areas. WongPartnership has also won several awards for having been involved in the top deals in Singapore and the region, in the areas of capital markets, mergers and acquisitions (M&A), structured fi nancing and securitisation and REITs, amongst others. In 2007, WongPartnership swept three Asian Legal Business South East Asia Deals of the Year

Awards, including winning the award for its involvement in the Singapore Deal of the Year.

WongPartnership’s establishing of multi-jurisdictional operations is a natural step given that much of its work involves a cross-border element and close to 30% of its lawyers are non-Singaporeans, including lawyers from the People’s Republic of China, Malaysia, India, Brunei, Japan, Vietnam, Indonesia and Lebanon.

Explaining WongPartnership’s strategy for its Middle East Practice, Managing Partner Dilhan Pillay Sandrasegara said, “While the Singapore market is undoubtedly still a very important one for us, the legal landscape has changed signifi cantly and we are no longer confi ned by national boundaries and must expand overseas to serve our clients’ needs even better and also to tap into a pool of potential clients in the Middle East for their outbound business objectives in the key markets in which we operate. Whether in the Middle East or from our Singapore and China offi ces, we are ably positioned to assist our clients worldwide across the fi elds of capital markets, funds formation, M&A, real estate fi nancing transactions and infrastructure, projects & construction work.”

With its Middle East offi ces, WongPartnership offers legal services to both the Middle Eastern companies looking to make investments in South East Asia, China and India, and to global and regional corporations in their investments in the Middle East. Ng Eng Leng, a key senior M&A Partner, has relocated to the Abu Dhabi offi ce to spearhead the development of the Firm’s M&A and transactional platform in the Middle East, highlighting the Firm’s commitment to establishing itself in the thriving Gulf States. Ziad Touma, who most recently worked at the leading UAE fi rm of Habib Al Mulla and is an experienced commercial and real estate lawyer has also been brought into the Firm’s Middle East team, bringing on board his fl uency in the Arabic, French and English

languages and years of working experience in the Middle East.

Pooling together their experience and breadth of legal skills, the core team of Partners involved in the Middle East Practice comprises Ng Eng Leng, Ziad Touma and Carol Anne Tan in the areas of corporate and commercial transactions, M&A and real estate, and Tan Chee Meng, Senior Counsel and Paul Sandosham in the area of infrastructure, projects and construction. The team is further augmented by the involvement of the Firm’s Founder, Wong Meng Meng, Senior Counsel who has over 35 years of experience and whose principal focus is the development of the Firm’s Middle East platform with the core team. Drawing from the expertise of over 230 lawyers experienced in local and cross-border work spanning Singapore, South East Asia, China, India and the Middle East, WongPartnership’s Middle East Practice is well placed to serve clients with global and regional interests, in all fi elds of law and across a broad range of industries.

Paul Sandosham, Head of WongPartnership’s Middle East Practice says, “With the opening of offi ces in the Middle East, WongPartnership will be on the ground in the Middle East which further strengthens our ability to assist clients from Singapore, Malaysia, China, India and the region, as they grow their business in the bustling Middle East.”

Leading Singapore Law Firm expands in the Middle East with a new offi ce in Abu Dhabi

Firm Profi le WongPartnership

Wong Meng Meng, Senior Counsel; Ng Eng Leng; Ziadad Touma; Tan Chee Meng, Senior Counsel; Paul Sandosham

38

FEATURE | offshore law fi rms >>


Historically, the word ‘offshore’ brought one concept to mind: tax advantages. Offshore jurisdictions typically offer

low, or sometimes zero, taxation platforms for companies that choose to incorporate there.

The business caseDue to the trend of using a vehicle incorporated in certain offshore jurisdictions to list a business on a foreign exchange, for many companies operating within emerging markets ‘offshore’ now means ‘access to investors’. This has resulted in boom times for offshore law fi rms, and much of the work is coming from China.

Explains a partner with a Beijing-based PRC law fi rm: “Chinese state-owned enterprises are able to access domestic bank loans with ease. For privately owned companies, however, these loans are not as easy to obtain. As a result, private companies must look to the public markets or private equity to access the capital they need in order to grow.” For many reasons, they look to foreign public markets.

“Tax advantages are a given, but tax alone isn’t a suffi cient reason to list offshore. You need to fi nd a jurisdiction accepted by the capital markets,” says Christopher Bickley, a partner based in the Hong Kong offi ce of offshore fi rm Conyers Dill & Pearman.

Foreign investors want to invest using exchanges they know and feel comfortable with. The London, New York and Hong Kong markets in particular offer political and economic stability, and established legal and regulatory systems. Comfort is also important to underwriters and ratings agencies involved in the listing process.

Practical requirements dictate other important considerations. A foreign listing can be completed more quickly using an offshore vehicle rather than a PRC company.

Regulators in offshore jurisdictions are very responsive, in some cases meeting every day to consider and respond to issues. PRC lawyers believe that a foreign listing offers greater safety if the listed company plans on a secondary offering or a refi nancing in the future. On some exchanges and using certain jurisdictions, shares can be listed in an uncertifi cated form, while others offer access to well-regarded settlement and clearing systems such as CREST.

A foreign listing can bring exposure to the globalised business world and help a company develop a platform for international expansion. Other business issues may make the fl exibility and control offered by offshore jurisdictions more attractive. In contrast, PRC law may render rights desired by investors – such as

shareholder, management, voting or preemptive rights – unenforceable. Similarly, JVs cannot be listed on PRC exchanges, and neither can different classes of shares, eg, preference shares. Compared to the legal framework offered by offshore jurisdictions and foreign exchanges, PRC company law is, in Bickley’s words, “not as fl exible and user friendly”.

Finding your audienceTailoring a listing to appeal to an appropriate investor base is well illustrated by the admission of Beijing-based China Boqi Environmental Solutions Technology to the Tokyo Stock Exchange in August 2007. Advised by Guantao Law Firm, China Boqi was the fi rst Mainland China-based company to go public on the Tokyo bourse’s fi rst section.

The technology at the core of the company was developed in Japan and, due to both Japanese investors being familiar with it and the company’s desire to cooperate with Japanese technology companies, Tokyo was a natural market.

The company’s stock soared 61% in its fi rst day of trading. China Boqi used a Cayman Islands-domiciled company as the listing vehicle, and Guantao used Conyers Dill & Pearman for advice and services in respect of the corporate structure.

The world’s appetite for emerging market investment opportunities remains strong, despite volatility in the capital markets. IPOs and secondary listings by Chinese companies on foreign exchanges have been meeting some of the demand. Key to these transactions are the boutique offshore law fi rms that provide access to key offshore jurisdictions used to facilitate foreign listings. Merran Magill reports

Listing offshore



The Tokyo Stock Exchange is just one foreign exchange that hopes to attract more Chinese companies. As noted by Greg Knowles, a partner in the Hong Kong offi ce of Caymans fi rm Maples & Calder, the Tokyo exchange’s Mother’s Index, a secondary board, has generated some interest for Asian companies, with Maples & Calder advising several Cayman-incorporated companies looking to list there.

New provisions may affect trendAt the time of China Boqi’s listing in Tokyo, neither the creation of the Caymans holding company nor the listing required approval from China’s securities regulator. However, a PRC lawyer interviewed by ALB believes the process would not be as straightforward if the same transaction were being considered today.

This is due to the promulgation of the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued by China’s Ministry of Commerce (MOFCOM) and fi ve other ministries, which came into effect on 8 September 2006.

These provisions permit a share exchange between a PRC company and an offshore company (a key part of establishing the listing vehicle), but make it diffi cult for the offshore vehicle to list on a foreign exchange. In addition to other approvals, the provisions require the listing company to receive pre-approval for the foreign listing from China’s securities regulator. Further, the pre-approval period is a relatively short 12 months.

If the offshore company fails to complete its listing within that time, the pre-approval expires. Given the time these transactions take to complete and the delays often caused by market conditions, this time period is considered by Chinese lawyers as extremely short.

The rationale behind the recent rule change is being hotly debated by PRC lawyers. Suggested reasons range from a heavy-handed attempt to bolster the size and liquidity of China’s domestic exchanges through to a desire to meet international standards and better understand the source of foreign investment in China within the context

of the recent increase in infl ow of foreign capital.

Regardless of the policy behind the new provisions, Bickley predicts that the change in the rules will have an impact on the ability of PRC companies to list overseas but notes that the slowdown has not yet been felt: “If the PRC company’s shares are not already located in an offshore entity, the process is going to be more diffi cult.”

Meanwhile, one PRC lawyer who spoke to ALB believes that Chinese companies are waiting to see how the rules play out. “It’s a quiet period, but it doesn’t mean that PRC companies will give up pursuing an offshore listing,” they say, conceding that because of the restrictions, the time-consuming nature of an offshore listing and the likelihood that any pre-approval period will expire before the listing is completed, one outcome may be that fewer PRC companies will seek a foreign listing.

A domestic listing of a PRC company may prove easier and more appropriate once demand improves and onshore exchanges offer a more attractive price/earnings multiples. “China is like any other emerging market” says Marc Yates, an Ogier partner based in Jersey. “They really want to build their own structure and get it recognised, but the reality is that it takes time.”

Which offshore jurisdiction?The differing opinions held by offshore law fi rms about which offshore jurisdictions are preferred by Chinese companies tend to refl ect each fi rm’s strengths, location, history and marketing strategy. However, the differences between each jurisdiction

“If the PRC company’s shares aren’t already located in an offshore entity, the process is going to be more diffi cult”

CHRISTOPHER BICKLEY, CONYERS DILL & PEARMAN

OFFSHORE FIRMS – WHO, WHERE ►AND HOW BIG

Name: ApplebyLocations: Bermuda, BVI, Cayman, Jersey, Mauritius, London, Hong KongTotal fee earners: 211Web address: www.applebyglobal.com

Name: Bedell CristinLocations: Jersey, Guernsey, London, Dublin, GenevaTotal fee earners: 74Web address: www.bedellcristin.com

Name: CainsLocations: Isle of Man, London, SingaporeTotal fee earners: 35Web address: www.cains.co.im

Name: Carey OlsenLocations: Guernsey, Jersey, LondonTotal fee earners: 142Web address: www.careyolsen.com

Name: Collas DayLocations: GuernseyTotal fee earners: 42Web address: www.collasday.com

Name: Conyers Dill & PearmanLocations: Anguilla, Bermuda, BVI, Cayman, Dubai, Hong Kong, London, Moscow, SingaporeTotal fee earners: 129Web address: www.cdp.bm

Name: HarneysLocations: BVI, Anguilla, London, Hong KongTotal fee earners: 55Web address: www.harneys.com

Name: Maples & CalderLocations: BVI, Cayman, Dubai, Jersey, Ireland, Hong Kong, LondonTotal fee earners: 218Web address: www.maplesandcalder.com

Name: Mourant du Feu & JeuneLocations: Cayman, Guernsey, Jersey, London, New YorkTotal fee earners: 132Web address: www.mourant.com

Name: OgierLocations: BVI, Cayman, Jersey, Guernsey, Ireland, Hong Kong, London, Montevideo, New ZealandTotal fee earners: 200Web address: www.ogier.com

Name: OzannesLocations: Guernsey, JerseyTotal fee earners: 44Web address: www.ozannes.com

Name: WalkersLocations: Cayman Islands, British Virgin Islands, London, Jersey, Hong Kong, DubaiTotal fee earners: 151Web address: www.walkers.com.ky

40



members, 20% of which are either domiciled or have their main business operations outside of the UK. Some 48 Chinese companies are listed on AIM.

Nominated Advisors, or NOMADs, are responsible for ensuring that companies are suitable for admission and must continue to monitor regulatory compliance. According to a study by the LSE in 2007, 9.6% of AIM companies were incorporated in the Caymans, 9.6% in BVI and 7.8% in Bermuda. Similar numbers of Jersey, Guernsey and Isle of Man companies are listed on AIM.

Several PRC lawyers stated a tendency for PRC companies to look to the AIM market. Companies choosing to list shares on AIM typically use Jersey or Guernsey structures, since BVI and Cayman companies can only list GDRs. In the experience of John Rainer, a Mourant du Feu & Jeune partner based in Jersey, Jersey, Guernsey and Cayman are the best jurisdictions in which to locate a listing vehicle for a London listing.

There is consensus that the London market also appeals to Indian companies, which have a reputation of using Isle of Man companies as listing vehicles. “Several Indian companies started the trend and others have adopted the same structure. We noticed this trend at an early stage” says Mike Edwards, an Isle of Man partner at Cains. Edwards observes that the “appeal of AIM is the massive pool of liquidity. Access to capital through London is huge. Even in these turbulent times, there is huge interest in AIM.”

Mourant recently advised on the fi rst listing of a Malaysian company on AIM – Peninsular Gold Limited, a Jersey-incorporated company. In January 2008, meanwhile, Carey Olsen advised on the AIM listing of China Eastsea Business Software Ltd, an IT outsourcing service provider for the petrochemical and petroleum industries. Harneys acted on 10 AIM listings last year, including the US$368m AIM fl otation of Canton Property Investment Limited, as well as two listings on the main market.

In addition, the LSE’s new secondary market – the Specialised Fund Market – aims to target hedge funds, feeder funds and private equity vehicles. Jason Romer, a Guernsey partner with

Collas Day, believes that the SFM will handle listings in a more “fund-friendly manner” than would AIM, which tends to attract operating companies.

To that end, several admission requirements have been relaxed, relying in part on the fact that investors should be confi dent that the listed funds are suffi ciently regulated by their home jurisdictions.

are many, and geography and time zones do matter.

Depending on the particular circumstances and objectives of the business seeking a foreign listing, there will be a “best fi t” in terms of foreign exchange and offshore vehicle. Chinese companies must rely on their domestic legal, tax and accounting advisors to help them identify the best offshore jurisdiction through which to access their preferred exchange.

Globally, the competition between exchanges to attract listings is fi erce, particularly between those in the major fi nancial centres – London, New York and Hong Kong. NASDAQ, the New York Stock Exchange (NYSE) and the Singapore Stock Exchange (SGX) have opened offi ces in Beijing to better compete against the Hong Kong Stock Exchange (HKEX), refl ecting China as a major source of new listings.

Yates for one, however, does not expect to see a big change in the main exchanges used. “A major shift away from the status quo is unlikely … ultimately it’s [dependent on] where your investors are,” he says.

London

NewYork

London: LSE, AIM and SFMThe Alternative Investment Market (AIM) is a junior market of the London Stock Exchange (LSE) and the most common London exchange for offshore listings. AIM now has over 1,600

New York: NYSE and NASDAQMarket participants cite several concerns related to listing in the US, eg, costs associated with Sarbannes-Oxley compliance and the threat of shareholder class actions. However, the prestige and the robust corporate governance offered by a US listing remains attractive to Asian companies.

As to which offshore jurisdictions are preferred, Yates of Ogier, which has a substantial presence in each of the four main offshore jurisdictions (Jersey, Cayman, Guernsey and BVI) says the Asia market is more familiar with BVI and Cayman companies. He says: “It’s a quirk of history, arising from the demands of the colonial Hong Kong market for an offshore solution, the ease of incorporation and the familiarity among the US market. Much replicated, this created a dominant standard across the region.”

Bickley, on the other hand, sees more Bermuda and Cayman companies

42



Seventy-fi ve percent of the companies admitted to the HKSE are offshore companies. “It’s a well-travelled path”, says Bickley. “Investors are familiar with the Hong Kong market.”

Michael Gagie, a partner in the Hong Kong offi ce of BVI-headquartered fi rm Harneys, notes that, until recently, BVI companies were not approved for listings in Hong Kong.

Traditionally, Bermuda and Cayman companies were the listing vehicles, although BVI companies were often part of the corporate structure. HKSE has special rules for offshore companies that require, among other things, extra provisions to be included in incorporation documents to bring them up to the standard accepted by the HKSE. Another heavily oversubscribed IPO was the US$140m listing of Tianjin Port Development Holdings Limited on HKSE, on which Applebys advised.

In the past, NASDAQ was the preferred exchange for China-based technology companies, but a major shift began to occur in 2006 as the NYSE and HKSE began to aggressively court Chinese companies. The decision by B2B portal alibaba.com to list in Hong Kong rather than on NASDAQ was something of a watershed.

The company believed it could achieve a higher valuation because Hong Kong was closer to the operation and investors there better understood Alibaba’s business model. The company raised US$2.7bn and the listing was 251% oversubscribed.

Singapore: SGX and SesdaqForeign listings account for about one-third of listings on SGX and its junior Sesdaq board, by number and market capitalisation. Forty-eight percent of the foreign listings are by Chinese companies. SGX senior executive vice-president and head of markets Gan Seow Ann reported that in 2007 new

foreign listings accounted for about 70% of the total number of listings on SGX. SGX hopes that by 2012 more than half of its listings will be foreign companies.

One of the largest recent deals for Cains was the listing of Genting International, the fi rst Isle of Man company to list in Singapore. The region is a focus for Cains, which recently opened a Singapore offi ce. “We hope to be able to replicate the success we have had on AIM,” says the fi rm’s Mike Edwards.

Convergence in the offshore market and the futureYates of Ogier says that his fi rm’s strategy is based on the convergence that they see happening within the offshore world. As the benefi ts of each jurisdiction become more homogeneous, “the driver for determining where a structure is located will depend on client factors: convenience, location – of both the business operations and management – and location of their investor base,” he says.

Offshore fi rms that focus on only one jurisdiction recognise the need to broaden their scope. Collas Day, in particular, with its focus on the UK capital markets, is looking to build in London, Jersey and more broadly offshore and beyond to the emerging markets.

Offshore fi rms, given their size and the friendly competition that exists among them, are reluctant to reveal fi nancial information. However, all fi rms contacted for this overview reported revenue growth,

listing on NASDAQ and the NYSE but also sometimes BVI companies.

As of April 2008, the NYSE Group (which now includes Euronext exchanges) has 52 companies from Greater China listed, including 42 from Mainland China, fi ve from Hong Kong, and fi ve from Taiwan.

The total market capitalisation of the 42 NYSE-listed Mainland Chinese companies was US$1.5trn. There are approximately 46 companies from Greater China listed on NASDAQ, the second-largest overseas market for the exchange.

Hong Kong: HKSEHKSE has become a natural choice for Chinese companies, particularly for SOEs. Increasingly, companies that list on the H-Share market are doing so in connection with an A-share listing on the Shanghai Stock Exchange.

Hong Kong

Singapore

Cont p46

Regulators in offshore jurisdictions are very responsive, in some cases meeting every day to consider and respond to issues. PRC lawyers believe that a foreign listing offers greater safety if the listed company plans on a secondary offering or a refi nancing in the future

44





The Cayman Islands unit trust continues to be the vehicle of choice for funds aimed at the Japanese market, primarily for tax and regulatory

reasons. In the following, I will consider some of the commonly asked questions that clients and professionals alike have in relation to unit trust structures.

The following note is necessarily general in nature and specifi c legal advice should always be sought on particular transactions.

Does the trustee need to be a Cayman Islands licensed trust company?In most cases the trustee of a unit trust is not required to be a Cayman Islands licensed trust company. The relatively rare exception is in respect of unit trusts which hold a mutual fund licence and in such cases the trustee must be a trust company licensed under the Bank and Trust Companies Law (2007 Revision).

Do I need to be concerned about the Retail Mutual Funds (Japan) Regulations (2007 Revision) (“Regulations”) if I am only targeting institutional investors in Japan?The short answer is no. The Regulations apply to retail mutual funds, defi ned as being mutual funds which are licensed pursuant to section 4(1)(a) of the Mutual Funds Law whose units have been or are intended to be offered to the public in Japan.

Are there any differences between a sub fund and a series trust?The term “sub fund” is generally used to refer to a separate portfolio within one unit trust. However, the term, “sub fund” is not a term of art and it is often used interchangeably with the term “series trust””.

In a standard unit trust structure, all the assets of the unit trust are available to satisfy the debts and liabilities of the trustee in its capacity as the

trustee of the trust. However, clients generally require the unit trust to contain separate portfolios or sub funds within the unit trust so that an investor subscribing for, say, Class A units will be benefi cially entitled only to assets in the portfolio or sub fund referable to the Class A units.

In order to give effect to the concept of sub funds, the trust deed or the declaration of trust will as a matter of contract seek to “ring fence” the liabilities of each of the sub funds by the use of limited recourse language so once the assets of a sub fund are exhausted then the assets of another sub fund cannot be used to discharge the outstanding liabilities. This approach to limiting the liability of each sub fund to the assets of that sub fund is of course only contractually binding on the contracting parties, third parties will rarely agree to be similarly bound. So while the trustee and the unitholders are bound by the terms of the trust, a third party creditor will generally have recourse to all the trust property irrespective of its classifi cation.

The term “series trust” is generally used to describe each separate trust within an “umbrella” unit trust platform.

While a trust is not as a matter of law a separate legal entity, each series trust within the platform is regarded as distinct from the other and once the assets of one series trust are exhausted the assets of the remaining series trust or series trusts cannot generally be used to discharge any outstanding indebtedness unless there is specifi c agreement to the contrary.

The series trust structure is therefore a straightforward way of segregating the assets and liabilities of different portfolios.

Will the Financial Instruments and Exchange Law of Japan (the “FIEL”) have an impact on the popularity of Cayman Islands unit trusts?The FIEL took effect on 30 September 2007 as an amendment to the existing Securities and

Exchange Law of Japan and related laws. All marketing and placement activities for units in offshore unit trusts must now be made within the new framework of the FIEL and therefore Japanese counsel should be consulted to ensure compliance with the FIEL.

We understand that the relevant licensing and oversight requirements imposed by the Japanese regulators for units in offshore unit trusts are now more onerous than for interests in offshore limited partnership. It remains to be seen therefore whether this will have any impact on the popularity of Cayman Islands unit trusts with Japanese investors.

Walkers are a Cayman Islands law fi rm and all issues in relation to the FIEL must be referred to Japanese counsel.

Carol V. Hall Partner

WALKERS Suite 1609-1610, Chater House8 Connaught Road, Central Hong Kong Tel: 852 2596 3317 (Direct) / 852 2284 4566 (Main) Fax: 852 2284 4560 Email: [email protected] Website: www.walkersglobal.com

Cayman Islands Unit Trusts– Some Commonly Asked Questions

Firm Profi le Walkers

Carol V. Hall


46



particularly in relation to work from emerging markets. Cains revealed that its revenues had increased by 33% over the last three years, and profi tability was up 37%, due in large part to the growth it is experiencing in advising on international AIM admissions. Mike Gagin of Harneys said that in revenue terms the fi rm as a whole had had its “best year ever”, the Hong Kong offi ce’s revenue almost doubling.

Cains’ growth, meanwhile, is also coming from the east, mainly the emerging markets of India, Kazakhstan and China, which is the rationale behind their recent opening of an offi ce in Singapore. Says partner Michael Edwards: “We realised that you can’t build an Asian practice from Europe. We looked at various locations, including Dubai and Shanghai, but chose Singapore because it’s increasingly being used as a hub for South East Asia and it has a very close relationship with India.”

Any effects of the new Chinese laws

are yet to be felt. Market volatility, on the other hand, is already making an impact. Hugh O’Loughlin at Walkers has seen a huge amount of listing activity in the last 12 months, although a few transactions have been delayed.

Bickley observes: “This year there has been a strong deal fl ow, but not like last year, which was very hectic. People are taking a bit more time to get their deals done and to get the timing right.”

Knowles says his fi rm has a steady fl ow of work for listings on AIM, HK and NYSE, but that there is “no doubt that some people are holding off until later in the year”. Recent instructions on the proposed listing of a Malaysian biofuels business on AIM have been aborted due to market conditions, “like many others”

noted John Rainer of Mourant.It may be that strong domestic

PRC markets become another threat to offshore business. The realities of the greater transparency and accountability that comes with an offshore listing, including possible personal liability of directors and offi cers, in addition to the new regulatory hurdles, may make a domestic listing more attractive. This concern was underlined by Yates: “The issue for PRC companies [when listing abroad] is the adoption of the necessary corporate governance regime and the rules that they have to comply with. In most cases it’s a step up … Some companies may not be ready for that level of regulation and scrutiny.” ALB

For many companies operating within emerging markets, ‘offshore’ now means ‘access to investors’

From p42


SPECIAL REPORT | China >>

ALB

The Chinese legal industry has delivered another year of laudable performance. Leading commercial fi rms in Beijing, Shanghai and Guangzhou have gone from strength to strength, as revenues, number of lawyers and fee rates continue to rise. China remains a good choice for international investors, and the infl ux of foreign fi rms coming to China is seemingly unstoppable.

ALB takes a closer look at the development of the legal industry in a number of leading economic centres in China

The year 2008 will go down in history as the year the Beijing Olympic

Games symbolised the rise of China. It will also be seen as the year when “the quantitative changes of the Beijing legal profession transform[ed] into qualitative changes”.

Jiang Jiang, a partner with Hylands, is one of the lawyers using “qualitative changes” to describe the development of Beijing fi rms. Hylands was founded in early 2007 based on the merger of Hao Tian and Li Wen & Partners, two fi rms with strengths in different practices. Jiang notes that the merger of equals is a pattern that is emerging in the evolving Beijing legal services market.

“The increased size of a fi rm can defi nitely add competitive advantages

when bidding for large-scale transactions. But, more importantly, the merger of fi rms with different specialisations can expand practice areas and add specialised capabilities,” says Jiang.

Hylands, the newly created force in Beijing’s legal services market, now has 26 partners and more than 100 lawyers across offi ces in Beijing, Shanghai and Nanjing.

“The capability to provide the full spectrum of legal services for businesses by specialised practice groups is what has made Beijing fi rms the most sought-after legal advisors across the country, especially when companies face sophisticated and large-ticket legal issues,” Jiang says.

Wang Ling of King & Wood agrees with the concept of “qualitative changes”, saying the traditional geographical advantage of Beijing fi rms is no longer the major determinant of clients’ decisions to bring Beijing fi rms on board in important projects and deals.

“In the past, Beijing fi rms had an advantage in being chosen for some record-breaking transactions due to their proximity to industry regulators, lawmakers and government offi ces,” says Wang. “Today, although the geographical advantage still exists to an extent, Beijing fi rms’ biggest advantages have changed to the know-how and experience they’ve accumulated over 15 years, and the proven track-record and solid portfolio of landmark transactions.”

CHINA

LIGHTNING GROWTH OF PRC FIRMS ►Firm Head offi ce Revenue

growth rate in 2007

Dacheng Beijing 108%

Jincheng & Tongda

Beijing 99%

Zhonglun Beijing 51%

Zhenghan Shanghai 51%

Brighteous Hangzhou 50%

Guantao Beijing 41%

Fangda Partners

Shanghai 40%

Alpha & Leader Guangzhou 38%

Grandall Legal Group

N/A 37%

Zhonglun W & D

Beijing 35%

Source: Fast 10, ALB China Issue 5.1

Beijing: home to top talent and top fi rms

2008



sustains growth momentum

BEIJING AND SHANGHAI IN COMPARISON ►Firm origin No. of fi rms:

BeijingNo. of fi rms: Shanghai

PRC 1,100 759

US 37 32

Hong Kong 16 16

UK 11 15

Japan 6 8

Singapore 2 7

Australia 4 6

Germany 2 6

France 4 5

Korea 3 1

Other 6 8

Source: Ministry of Justice, as at 30 July 2007

As a result of the “qualitative advantages”, PRC counsel in high-profi le listings, M&A deals and international commercial dispute resolution are mostly Beijing fi rms.

Having similar advantages to those that private practice fi rms had in the past decade, in-house departments in Beijing are widely considered to be more sophisticated and larger than in-house departments in other parts of the country, with Shanghai possibly the closest rival.

“The majority of large SOEs and top 100 companies are based in Beijing, as well as the high-profi le general counsel and CLOs,” says Liu Hongqiang, the China representative of the Association of Corporate Counsel (ACC) and the general counsel of Beijing-headquartered central SOE, the China Electronic System Engineering Corporation.

“In-house practitioners in Beijing are usually more sophisticated and

functional than those in other cities. Of course, in Shanghai there are many good general counsel in multinational companies.” Based on an overall analysis, Liu says, ACC has decided to locate its China headquarters in Beijing where the global organisation can best facilitate its members in China.

Knowing how to instruct external counsel and how to be selective, in-house departments in Beijing have been helping to enhance the service quality of Beijing fi rms. At the same time, their rapid business development has caused a surge in demand for legal services, and pushed their external counsel to acquire more cutting-edge practices and services.

“The past year has been a year of great success for our clients, and there have been many interesting and challenging transactions for us to deliver outcomes on,” says Zhang Xuebing, the managing partner of Zhong Lun.

It is unarguable that the average charge-out rate of Beijing fi rms is usually higher than the average rate in other cities, but it is not stopping companies from using Beijing fi rms.

“Most in-house counsel are very willing to pay because of the expectation of having a good result when cooperating with external counsel,” says Liu.

Wang Lihua, managing partner of Beijing fi rm Tian Yuan, backs up Liu’s claim that the charge-out rate of Beijing fi rms is usually higher than in other cities. However, the effi ciency and quality of work can add value to clients’ businesses and eventually justify the total cost. “To a large extent, increasingly selective clients with quality-driven approaches have been pushing the Beijing legal industry forward,” says Wang.

BEIJING

“Today, although the Beijing geographical advantage still exists to an extent, Beijing fi rms’ biggest advantages have changed to the know-how and experience accumulated over 15 years, and the proven track-record and solid portfolio of landmark transactions”

WANG LING, KING & WOOD



Despite the turmoil in the global markets and a looming recession

in the US, law fi rms in Shanghai are profi ting from the spike in corporate activity. Home to more than 3,500 banks and the country’s largest stock exchange, Shanghai has been fi rmly put on the map as one of China’s main economic powerhouses. Its confi dence and success rests on two pillars: banking and fi nance.

In 2007, the PRC banking industry experienced much reform and restructuring, and became more open to foreign investors. Many Shanghai fi rms have built on their relationships with domestic and international banking clients, and have closely followed the development of business in traditional and emerging product lines.

Jun He Law Offi ces’ Shanghai offi ce has reinforced its leadership in the banking sector by representing major banks in fi nancing transactions totalling more than US$30bn, including acquisition fi nance, project fi nance, structured fi nance, asset fi nance and trade fi nance transactions.

“Jun He’s Shanghai offi ce has achieved another banner year, especially in the banking area. Although tight monetary policy will continue in 2008, the pipeline of lending and fi nancing deals will remain strong,” says George Wang, partner with Jun He.

As more foreign banks become locally incorporated, their demand for PRC legal services will continue to grow. “All the new laws, particularly the new property law and bankruptcy law, will have a signifi cant infl uence on both international and local fi nancial

institutions,” says Charles Qin, founding partner of banking & fi nance boutique fi rm Llinks Law Offi ces. “Increasingly, they’ll need local counsel to advise them on regulatory and compliance reviews, and on their consultation with the government authorities on general and specifi c issues.”

Another trend witnessed by fi nance specialists is the rise of the funds management industry in Shanghai. In recent years, Jun He and Llinks have advised foreign and local banks and insurance companies on establishing joint venture and domestic funds management companies (FMCs), and have acted on FMC investments at home and overseas.

“With more QDII and QFII licences being approved and the investment quota expanding, the funds management industry is a fast-emerging and cutting-edge practice area for Shanghai fi rms,” says Qin. “The amended Partnership Enterprise Law allows fund managers to adopt a more fl exible investment structure and helps the industry to grow in strength and sophistication.”

Currently there are 60 FMCs, half of which are joint ventures with foreign fi nancial institutions. Twenty have secured their QDII qualifi cations.

Shanghai Yuan Tai’s funds practice has a particular focus on QDII. The fi rm enjoys a large share of the market; it has advised China Southern Fund and ICBC-Credit Suisse AMC on their fi rst QDII product launches and is currently advising 10 other leading domestic and joint venture FMCs on their QDII applications. “Despite the volatility in the world market, the pace of growth

of QDII funds won’t be hampered. The QDII scheme is the government’s long-term investment strategy, so there’ll be more opportunities for dedicated funds management law fi rms to participate in this visionary outbound investment program,” says Hubert Tse, managing director of Yuan Tai and head of the fi rm’s international business group.

In addition, the three sovereign wealth funds (SWFs) – China Investment Corporation, National Social Security Fund and China-Africa Development Fund – are reportedly planning to outsource a combined US$320bn to foreign asset managers over the next three years, according to a report by Z-Ben Advisors, experts on China’s investment management industry. Law fi rms in Shanghai are well placed to represent international and local fund managers in the outsourcing process.

The symbolic Jin Mao Tower in Pudong fi nancial district will soon be eclipsed by a new building nearby – the Shanghai World Financial Centre. The 101-storey, 492 metre-high building will be the tallest building in Asia and a new symbol of Shanghai’s rise to prominence as Asia’s international fi nancial centre.

“All the new laws and regulations will have a signifi cant infl uence

on both international and local fi nancial institutions. Increasingly, [these institutions] will need local counsel to advise them on regulatory and compliance reviews, and on their consultation with government authorities”

CHARLES QIN, LLINKS

SHANGHAI

Shanghai: bucking the global trend

SPECIAL REPORT | china >>


Firm Profi le Paul Weiss

51

If someone could bottle Jeanette Chan’s energy, they would not only make a fortune many times over, they would put out of business every barista from Seattle

to Sydney. Because Jeanette Chan, who heads up Paul Weiss’s China Practice Group as well as the fi rm’s Asia Communications and Technology Practice Group, is speaking to ALB from her Hong Kong offi ce, where she has just stepped off a plane from New York City, and sounds as if she has just completed nothing more arduous than a leisurely Sunday morning bike ride – rather than a fl ight notorious among business travellers as the longest non-stop trip today’s airframe technology allows.

Known as a serious rainmaker within the fi rm and, as this magazine once described her, a “household name” in the Asian deal-making community, Chan has proudly led her fi rm from strength to strength in the highly competitive and fast changing fi eld of technology, media and telecommunications. While Chan’s infectious enthusiasm for her work is part of the equation behind Paul Weiss’s capability in this fi eld, the unique way the fi rm organises itself goes a long way towards explaining its success. Working across borders and across disciplines, Paul Weiss’s TMT attorneys do not sit in their silos but rather work actively on a spectrum of deals in a variety of places at any given time.

“We have practice space, not offi ce space”, explains Chan. “Our [TMT] practice runs out of different offi ces, something which is different from other fi rms and yet makes our expertise more coherent throughout the practice group.” It is this organisational trick which allows the fi rm to work on major TMT deals across mainland China, Hong Kong and Taiwan – a multi-jurisdictional empire with a

TMT is dynamite for Paul Weisssometimes-tricky political environment – and service major clients such as AmericaOnline, Microsoft and Motorola. Chan and her fi rm have worked on a number of deals, such as Lenovo’s acquisition of IBM’s personal computer business and work surrounding the sale of broadband internet cable in Taiwan. As well, Paul Weiss has become a leader in handling private equity deals in the region long before the term catapulted from the business pages to the front pages.

This long experience (dating back at least to the early 1990s) in private equity and other matters across Greater China has blessed Paul Weiss with other advantages as well. With what might be called a “honeybee approach” to TMT work throughout the region, Chan and her team are able to cross-pollinate deals across different jurisdictions in a way other fi rms cannot, making honey for themselves and their clients along the way. This activity has made Paul Weiss particularly strong at navigating the complex and often-changing thicket of regulation surrounding TMT across mainland China, Hong Kong and Taiwan, and has enabled the fi rm to provide a value added service to clients.

“Just before our meeting I was on the phone to a client in Los Angeles who is working on a lot of projects in China centered around high-tech infrastructure, and he like every client asked if we got involved with the business side,” says Chan.

“And of course I said yes, although lawyers usually don’t, but because we know the market so well and know the regulators so well, we fi nd ourselves looking at business plans and assumptions and models. We are in a really unique position to ask questions about these things and give very practical advice”.

Paul, Weiss Rifkind, Wharton & Garrison Unit 3601, Fortune Plaza Offi ce Tower ANo. 7 Dong Sanhuan ZhongluChao Yang District, Beijing 100020PRC

Jeanette K. Chan, partner Email: [email protected] Ph: (8621) 5828-6300 or (852) 2536-9933

Jeanette K. Chan,Paul Weiss




It has often been said that Guangzhou, the third most active commercial

centre in China, is overshadowed by Beijing and Shanghai as a legal centre. In addition, it has had to contend with strong competition from fi rms in neighbouring Shenzhen.

However, an increasing number of local fi rms are adopting strategies to further develop their practices. Also, they are looking beyond their local area to the possibilities of international practice.

The optimism of Guangzhou lawyers is well founded, as seen in the continuing growth of the Canton Fair (the Chinese Import and Export Commodities Fair), the largest trade fair in China. In the spring of 2007, the 101st fair saw the participation of 314 different companies from 36 countries.

While Shanghai is busy upgrading its city infrastructure for the 2010 World Expo, Guangzhou, to be the host city of the 16th Asian Games in 2010, is

spending approximately US$26.5bn to improve its infrastructure, build an athletes’ village and a new railway station, and complete the second phase of the new Baiyun International Airport. As the projects progress, law fi rms whose practices include project fi nance, construction and real estate are benefi ting from the infl ux of work.

And the most exciting development is yet to come. The Guangzhou government is changing the basic operations of the city’s foreign investment intakes and its economic development. The 2007 Guangzhou Foreign Trade White Paper sets out the changeover from a labour-driven economic growth to one that is based on technological developments. Investment in the automotive, petrochemical and electronic information industries will be encouraged.

These fundamental changes will create opportunities for business law fi rms targeting the mid to high end of the value chain.

“Compared to fi rms in Beijing and Shanghai, Guangzhou fi rms have fewer opportunities to develop a sophisticated cross-border transaction practice,” Sino-West Law Associates’ managing partner Gordon Lin says. “However, it’s relatively easy for a fi rm to succeed in Guangzhou, as long as it’s able to do its best with the opportunities that are present.”

With location advantages, Guangzhou fi rms can slice through the competition in the greater Pearl River Delta (PRD) region. “If a deal doesn’t require central government’s approval, clients in the PRD region will most likely hire a local fi rm from the provincial capital city to be their legal advisor,” says Lin.

Guangda Law Firm, winner of Guangdong Law Firm of the Year at the ALB China Law Awards in 2007 and 2008, had a record year with revenue growth of 30% in 2007.

When asked about plans for the future, executive partner of Guangda Pete Zhang says the fi rm will retain its primary focus on Guangdong province, because it has seen the immense potential outside the traditional litigation work. “There’s no doubt at all that lawyers’ role in litigation has been

Guangzhou: remaining in the top three

“The function of lawyers in corporate and investment areas is only being gradually understood and accepted by local entrepreneurs and by the government. It will take some time for the idea of using lawyers for non-contentious matters to reach the same level as it is now in Beijing, Shanghai and the Yangtze River Delta”

PETE ZHANG, GUANGDA

GUANGZHOU

well established and understood by people in Guangzhou,” says Zhang.

“The function of lawyers in corporate and investment areas, however, is only being gradually understood and accepted by local entrepreneurs and by the government,” he continues.

“It will take some time for the idea of using lawyers for non-contentious matters to reach the same level as it is now in Beijing, Shanghai and the Yangtze River Delta. But that’s exactly what we should focus on, because it will be the main driver of our fi rm’s future growth. Guangdong’s economy is strong enough to foster a much larger and deeper legal services market.”



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There has not been further liberalisation in China’s legal service

market for a number of years, but new licences allowing representative offi ces to set up in China are being granted to foreign and Hong Kong fi rms each month.

“All international fi rms with offi ces overseas will look to China as a very important part of their international

plan and will want to take advantage of the growth. So foreign fi rms are still coming in and the ones doing well here are trying to expand,” says John Grobowski, former co-managing partner at Baker McKenzie’s Shanghai offi ce who has joined Faegre & Benson as the head of the fi rm’s Shanghai offi ce.

However, as the market is getting more crowded and competitive, managing

“All international fi rms with offi ces overseas will look to China as a very important part of their international plan and will want to take advantage of the growth. So foreign fi rms are still coming and the ones doing well here are trying to expand”

JOHN GROBOWSKI, FAEGRE & BENSON

INTERNATIONAL FIRMS

partners of international fi rms’ China offi ces fi nd it is increasingly challenging to make the cut. “It’s a market that’s rapidly becoming more sophisticated, more diversifi ed and more competitive. The challenge for all law fi rms, both local and foreign, increasingly will be to acquire and project an identity that differentiates them from their peers,” says Cutler Elliot, the resident partner in charge of Akin Gump’s Beijing offi ce.

The entrance of international fi rms is ostensibly welcomed by general counsel in China. “Under our company’s global strategy, our need for international legal services and foreign lawyers is growing signifi cantly,” says Qiao Hai of Beijing-headquartered Udifa. “For responsive, cost-effective services and familiarity with the local market, we prefer to work with fi rms that have an offi ce in Beijing.”

More importantly, general counsel also appreciate the fact that increased competition can have a positive impact on local professional standards. ALB

International fi rms shake up the market

FEATURE | China Law Awards coverage >>


ALB, in conjunction with repeat title sponsor Omega, are proud to announce the winners of the 2008 China Law Awards, where the best of the best in the business were feted at the Westin Shanghai Hotel on 25 April

ALBThe thrill of victory…

ALB magazine is thrilled to announce the results of the fourth annual ALB China Law Awards, which were

celebrated on 25 April at Shanghai’s Westin Hotel, where the cream of the crop of the mainland legal and dealmaking community gathered to honour the best work produced by their profession over the course of 2007.

The results of this year’s awards refl ected the changing nature of the Chinese legal market, which is on the one hand maturing and consolidating, and on the other opening a wealth of opportunities for niche players to gain a foothold in a number of specialist areas. Judges had their work cut out for them as well: not only were a record number of fi rms involved in this year’s awards, but there were a record number (36) of categories as well, thanks to the creation of a number of awards to recognise legal excellence in China’s regional centres.

Among the big winners this year was Haiwen & Partners, which went home with six trophies on the night, thanks largely to its work in such groundbreaking deals as the historic Alibaba.com IPO, which not only took Equity Market Deal of the Year but was named Deal of the Year as well, Chinese legal giant King & Wood, which took home fi ve trophies, and Jun He, which was close on its heels with three – including the coveted Beijing Firm of the Year and China Firm of the Year awards.

FIRMS OF THE YEARBanking Jun He

China Firm Jun He

Dispute Resolution King & Wood

Insolvency & Restructuring Dacheng

Insurance AllBright

Intellectual Property Liu Shen & Associates

International Firm Lovells

Managing Partner Wang Zhongde (Dacheng)

Offshore Appleby

Shipping Wang Jing & Co

Tax & Trusts Grandall Legal Group

Beijing Firm Jun He

Guangzhou Firm Guangda Partners

Hong Kong Firm Deacons

Jiangsu Firm FD Yongheng

North-East China Firm Deheng Law Firm

Shenzhen Firm Sincere Partners

Tianjin Firm Winners (Jinnuo)

West China Firm Tahota (Chengdu)

Zhejiang Firm T & C

Shanghai Firm Grandall Legal Group

DEALS OF THE YEAR Real Estate & Construction Soho China IPO (Zhong

Lun, Haiwen & Partners, Freshfi elds, Conyers Dill & Pearman, Commerce & Finance, Skadden Arps)

Project Finance Fujian Refi ning and Ethylene Project (King & Wood, Latham & Watkins, Haiwen & Partners, Shearman & Sterling, White & Case)

M&A CIC-Morgan Stanley (Sullivan & Cromwell, Davis Polk & Wardell)

IT/Telecommunications Alibaba.com IPO (Fangda Partners, Freshfi elds, Sullivan & Cromwell, Maples & Calder, Haiwen & Partners, Slaughter & May, Simpson Thacher Bartlett)

International Dealmaker Celia Lam (Linklaters)

Energy & Resources China Petrochemical oil refi nery assets acquisition (Guantao, Herbert Smith)

Equity Market CITIC Bank IPO (King & Wood, Skadden Arps, Commerce & Finance, Freshfi elds)

Debt Market Sinopec CB Issue (Herbert Smith, Haiwen & Partners, Skadden Arps, Commerce & Finance, Freshfi elds)

China Dealmaker Bai Yanchun (King & Wood)

China Deal of the Year Alibaba.com IPO (Fangda Partners, Freshfi elds, Sullivan & Cromwell, Maples & Calder, Haiwen & Partners, Slaughter & May, Simpson Thacher Bartlett)

IN-HOUSE TEAMS OF THE YEARBanking & Financial Services

ICBC

China In-House Team ICBC

Chinese Company Sinopec

Foreign Company Microsoft

Investment Bank UBS

FEATURE | China Law Awards coverage >>


Grandall Legal Group, meanwhile, was named Shanghai Firm of the Year, while Dacheng’s Wang Zhongde was named Managing Partner of the Year, in no small part for his leadership of his fi rm in a year when they opened fi ve new offi ces and saw revenue more than double. Meanwhile, in the In-House categories, which recognise the special work of in-house counsels, ICBC was the big winner on the night, with judges keen to recognise the work the banking giant’s legal team, led by Zhang Wei, performed during 2007 which included not one but two major overseas M&A transactions.

ALB magazine would like to once again extend its heartiest congratulations to all the winners, as well as thank its panel of judges and the hundreds of legal professionals, bankers and in-house counsel who participated in our research and whose continued dedication ensures that these awards provide a vehicle for the Chinese legal industry to speak with one voice. ALB

THE BIG WINNERSHaiwen & Partners 6

King & Wood 5

Jun He 3

Commerce & Finance 3

Fangda Partners 3

Dacheng 2

Grandall 2

58

FEATURE | law fi rm associations >>


BANGLADESH ►Lex Mundi Amir & Amir Meritas n/aMSI Global Alliance n/aTerraLex Amir & Amir

CHINA ►Lex Mundi Jun He Law Offi ceMeritas Grandfi eld Law Offi cesMSI Global Alliance Lehman Lee & XuTerraLex Hylands Law Firm; Liu, Shen

& Associates; AllBrightHONG KONG ►

Lex Mundi (currently recruiting)Meritas Gallant Y.T. Ho & Co.MSI Global Alliance ONC LawyersTerraLex Boughton Peterson

Yang Anderson

TRALIA AUSTRALIA ►►Lex Mundi ex Mu Clayton UtzMeritas Various (one fi rm per state)MSI Global Alliance Various (one fi rm per state)TerraLex Middletons

INDIA ►Lex Mundi Amarchand & Mangaldas &

Suresh A. Shroff & Co.SMeritas Khaitan & CoCMSI Global Alliance Chandan Associates;

Rajinder Narain & Co; Surana & Surana International Consultants Private

TerraLex n/a

INDONESIA I DONESIA►►ex Mundi Le Mu Ali Budiardjo, Nugroho, ardjo, Nug odAli i oardjo, Nug

ReksodiputrodipR troMeritas itas Hanafi ah Ponggawa nggawaanafi ah P nggawa

& PartnersMSI Global Alliance Global Aa l n/aTerraLex x Kartini Muljadi & RekanRuljana

MALAYSIA ►Lex Mundi SkrineMeritas Zain & CoMSI Global Alliance Chooi & CompanyTerraLex Azmi & Associates

PHILIPPINES ►Lex Mundi Romulo MabantaMeritas ACCRAMSI Global Alliance n/aTerraLex ACCRA

SRI LANKA ►Lex Mundi F. J. & G. De SaramMeritas n/aMSI Global Alliance John Wilson PartnersTerraLex n/a

SINGAPORE ►Lex Mundi (currently recruiting)Meritas Joyce A. Tan & PartnersMSI Global Alliance Low Yeap Toh & GoonTerraLex Kelvin Chia Partnership

THAILAND►Lex Mundi Tilleke & GibbinsnsTillekMeritas Russin & VecchiussinMSI Global Alliance an Hutter & Dhira Ltdtter & TerraLex KSeri Manop & Doyleri Man leMa



Cross-border M&As in Asia are on the rise. As emerging markets continue to develop, not only do more opportunities

for investments and takeovers present themselves, but local corporations also gain enough confi dence to test the international waters.

“Companies today are increasingly seeking targets in more far-fl ung destinations,” conclude the researchers of the Economist Intelligence Unit in a survey into global M&A activity, held in January. “The rapid development of some countries in Asia, the Middle East and Latin America has created a whole host of new opportunities for acquirers in these regions, while at the same time turning local companies into acquirers in their own right.”

Several countries in particular have come under the spotlight, with Vietnam, Korea and Thailand becoming increasingly attractive destinations. Their renewed interest is part of a global trend. The Economist’s survey asked 670 executives worldwide which region they considered as the most attractive destination for M&A, and 57% mentioned China, India and South East Asia as their preferred destination over the next 18 months.

The attractiveness of the Australian resource sector and its nexus with Asian development is of course

well known. Western Australia, for example, has seen Chinese corporations hunting for mining and natural resources companies to secure the continuous supply of minerals. There is also anecdotal evidence that Japanese corporations have ramped up their investments in construction projects in recent months, especially in Queensland.

Joining forcesFor law fi rms that do not have an extensive network of international offi ces, the question is how they can tap into this source of cross-border advisory work, without having to set up costly new offi ces.

Teaming up with an international player is one approach, but such opportunities are rare. Meanwhile, there is another alternative – membership of a global alliance.

James Mendelssohn, CEO of MSI Global Alliance, says he has seen an increase in applications for membership over 2007. “We received 250 cold applications in 2007 – those are applications from law fi rms that we had never heard of before.”

And where globalisation is the name of the game, it is not hard to see why independent fi rms are scrambling to join an alliance. “The key advantage for today’s independent law fi rm is

As more Asian economies reach a level of maturity that enables local corporations to look for investments beyond their national borders, global law fi rm associations are doubling their efforts in this region to make sure their members secure a piece of the advisory pie

KOREA ►Lex Mundi Hwang Mok ParkMeritas Lee & KoMSI Global Alliance n/aTerraLex Yoon Yang Kim Shin & Yu

NEW ZEALAND ►Lex Mundi Simpson GriersonsonMeritas Martelli McKegg Wells WWg

& CormackMSI Global Alliance Wynyard WoodTerraLex n/a

JAPAN ►Lex Mundi Nishimura & AsahiMeritas Kojima Law Offi cesMSI Global Alliance Kojima Law Offi cesTerraLex Yuasa and Hara; Kikkawa

Law Offi ces

TAIWAN ►Lex Mundi Tsar & Tsai Law Firm&Meritas Russin & Vecchi cMSI Global Alliance M n n/aTerraLex r Pamir Law GroupL

Joining the alliance

60



GLOBAL ALLIANCES: ►QUICK FACTS ON THE MAIN PLAYERS

Lex MundiEstablished 1989• 160 member fi rms in 99 countries• Members are prominent local law fi rms recognised • for the breadth and depth of their legal expertise and their reputations in their jurisdictionsAll members are full-service commercial law fi rms•

MeritasEstablished 1990• 170 member fi rms in 60 countries• Firms practise in all business areas, both • transactional and litigation

MSI Global AllianceEstablished 1990• Over 250 independent member fi rms in • 100 countriesMembership includes accounting fi rms • Caters for full-service, commercial fi rms which are • independent and medium sized in their market and focused on one specifi c geographic region

TerraLex158 fi rms in 100 countries• Members are full-service law fi rms. Occasionally • has two fi rms with different practice profi les in same marketTypically has only single member in each market, • however some jurisdictions may have multiple distinct markets

that it can service and retain larger clients that have international business interests, without going through the pain of a merger or being swallowed up by a larger fi rm,” says Mendelssohn. “Without membership of an organisation such as MSI Global Alliance, the fi rm may have lost its most important clients to larger national or international law fi rms.”

And that is the key point. Much of the increase in interest stems from the realisation that law fi rms need to have an international network to not only attract new clients, but also retain existing clients. This, says Mendelssohn, applies especially to mid-sized law fi rms. “Clients say that they want to stay with these fi rms because they enjoy the personalised service, but they need international representation. The benefi t of joining an alliance isn’t just about waiting for a phone call and signing up a big new client from Hong Kong; it’s also about retaining existing clients.”

The other advantage of membership, says Mendelssohn, is the kudos which

accompanies it. “So for an independent fi rm, promoting one’s status as a carefully selected, exclusive member of one of the more high profi le associations is an increasingly important business development resource; MSI members are regularly winning work from nationally or internationally focused companies that would previously have been the exclusive domain of the big fi rms.”

MSI is also looking to build stronger ties with the Asia-Pacifi c region, in particular greater China. Three months ago, it welcomed a new Hong Kong member, Or Ng & Chan, to its ranks. It has also scheduled a meeting of member fi rms in Beijing for October.

No guaranteesDespite the seemingly growing interest from law fi rms to join alliances, the options are often limited, especially when seeking memberships with some of the more established alliances. Most alliances allow only one member per jurisdiction, in order to provide members with exclusivity.

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HOW MEMBERSHIP OF A GLOBAL ALLIANCE CAN WORK ►EXAMPLE ONEA Japanese staffi ng company employed the services of a TerraLex member fi rm when it decided to go ahead with a major acquisition of a well-known provider of corporate training, recruiting and offi ce outsourcing in the UK. The transaction involved participants in three major time zones (Japan, Europe and the US). The team cooperation between member fi rms in the US and the UK enabled the transaction to be completed in just one week from the date when the green light was given for implementing the deal.

EXAMPLE TWONew Years Eve, December 2006: A TerraLex representative from Stoel Rives in Boise, Idaho, received an urgent message from his client, whose auditors had identifi ed an important legal question that needed to be answered by midnight. The matter involved a Chinese trust, a transfer of stock from Singapore to Mauritius, and questions arising under Singapore corporate law. Through TerraLex connections in Taiwan and Singapore, the question was resolved less than six hours after it was raised. A huge potential tax liability was avoided, to the client’s immense relief. Interestingly, the matter had also been referred to a large international law fi rm, which had been unable to assist at such short notice.

“We’re a fairly mature network and therefore don’t allow many new members,” says Carl Anduri, president of Lex Mundi, a well known global alliance of full-service fi rms. Anduri says the alliance receives regular enquiries from law fi rms wanting to join the association. Only occasionally new positions become available. Lex Mundi reviews its members every eight years and has expelled law

fi rms from the network in the past for allowing their quality standards to slip. “Membership isn’t guaranteed,” Anduri says.

Member servicesThere are also a number of more practical benefi ts of joining an association. Members of Lex Mundi, for example, can contact each other for up to 30 minutes of free legal

advice. All associations provide a host of seminars and professional development opportunities – along with the chance to build those all-important international contacts.

Other services are perhaps less commercially oriented. Pro bono work is an important part of any fi rm’s profi le and global associations can help members gain access to pro bono opportunities.

Lex Mundi, for example, has a Pro Bono Foundation which is focused on providing pro bono assistance to what it describes as “social entrepreneurs” or change makers – people who use an entrepreneurial approach to solve social problems on a local or global scale.

Examples of work that members have been involved in include defending the developer of a bamboo gasifi er to produce environmentally clean electricity from administrative action, and providing legal assistance to Kiva Microfunds, a US-based organisation that facilitates microlending to economically disadvantaged people worldwide. ALB

PRIVATE PRACTICE IN-HOUSE

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

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

HONG KONG OFFICE

SINGAPORE OFFICE.

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

FUNDS – HONG KONG

Global leader in the funds arena, this leading international law firm seeks a dynamic mid/senior level lawyer. Impressive client base - you will have direct access to leading financial services institutions. Chinese language skills preferred. (PT1867) 4 YRS+ PQE

COPORATE – HONG KONG

Join a leading practice within a leading international UK law firm. Access to high profile work within a supportive team. You must have broad corporate experience inclusive of M&A and PE work. Exceptional career development opportunity. (PT1868) 2-5 YRS+ PQE

US SECURITIES – SHANGHAI

International firm seeks skilled associate with mix of M&A, FDI and securities listings experience to join their practice. Friendly team and US rates salary package. PRC lawyer with international law firm experience to qualify. (PT1870) 4 YRS+ PQE

PARTNER – CORPORATE TRANSACTIONS – SHANGHAI

Top ranking global US firm seeks talented partner or counsel with international experience to lead its PRC practice and provide advice to blue-chip clients on a range of corporate transactions. Genuine equity partnership on offer. (PT1863) 8 YRS+ PQE

COMMERCIAL LITIGATION / IP – BEIJING

Leading UK firm with impressive litigation team requires lawyer skilled in both litigation and IP to act as a crucial link in their expanding commercial practice in China. High degree of autonomy and career progression. (PT1862) 3-5 YRS PQE

CORPORATE – TOKYO

High Profile US law firm requires Corporate lawyer to join its leading team. Broad variety of work on offer. Friendly working environment and first class training. Japanese language skills are not required. Attractive remuneration package. (PT1873) 3-5 YRS PQE

GENERAL COUNSEL – HONG KONG

A senior lawyer is required by this global manufacturing group to take the lead in advising on commercial, corporate finance, intellectual property and litigation matters. Competitive Remuneration. (IS963) 10 YRS+ PQE

REGIONAL COMPLIANCE DIRECTOR – HONG KONG

The asset management arm of this leading investment institution is looking for a compliance professional to take up this leadership position. You should have relevant experience, gained at a bank or fund. Superb career prospects. (IS965) 6 YRS+ PQE

INVESTMENT FUNDS – HONG KONG

This global futures fund provider invites a sharp and dynamic lawyer. You will advise a wide range of financial intermediaries, institutions and qualified investors throughout Asia. Experience in compliance matters is essential. (IS962) 5 YRS+ PQE

SECURITIES / INVESTMENTS – HONG KONG

Elite global financial services group seeks a Regional Counsel to handle the legal and compliance functions with respect to its fund matters in Asia. Relevant securities knowledge is essential. Superb package. (IS968) 7 YRS+ PQE

PRIVATE EQUITY / INVESTMENTS – HONG KONG

A private equity lawyer is required by this global institution to advise the investment business. Experience in private equity and M&A transactions and fluency in English is required. Rare in-house prospect for career development. (IS955) 6 YRS+ PQE

FUNDS / INVESTMENTS – HONG KONG

Investment giant seeks a funds lawyer. You will provide legal advice and support for this conglomerate’s businesses in Asia. Experience at an international law firm or funds house is a must. English is essential. Lucrative package on offer. (IS970) 4 YRS+ PQE

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8.6_la_alb_hk hi-res.pdf 5/22/08 10:50:15 AM

PSD GroupHong Kong: 5107 Central Plaza, No. 18 Harbour Road, Wanchai, Hong Kong

General Line: +852 2531 2200

Singapore : 77 Robinson Road, #14-02 Robinson 77, Singapore 068896General Line: +65 6738 3088

S i n g a p o r e • H o n g K o n g • S h a n g h a i • D u b a i • L o n d o n • P a r i s • M u n i c h • F r a n k f u r t

http://asia.psdgroup.comPSD is part of the OPD Group & listed on LSE

IN-HOUSESenior Legal Counsel – Hong KongA leading international media company is currently looking for anin-house senior legal counsel with 6-10 years' PQE. The ideal candidatewill have solid corporate/corporate finance, M&A and PRC-relatedexperience. Candidates who have experience in advising on mediaand telecoms related transaction experience will have a distinctadvantage. Fluent English and full set of Chinese language skills areessential. Interesting working environment.

ISDA Documentation Specialist – Hong KongThis European bank is looking to grow its derivatives' support team.As an ISDA Documentation Specialist, you will work closely with thederivatives' legal team. You will be responsible for drafting and negotiatinga wide range of master agreements. Individuals with a legal or paralegalbackground without ISDA experience will be considered. Terrificopportunity to specialise in an area of the law which is interesting andin high demand in the global financial markets.

Funds Lawyer – Hong Kong/SingaporeOur client is amongst the top tier investment banks globally. Its assetmanagement division is seeking to add an additional mid-ranking tosenior funds lawyer to its expanding team in Asia. Work experiencein a reputable law firm or financial institution of international exposurein structuring, distribution, management and investment of retail andinstitutional funds would be ideal. Transactional experience in privateequity, real estate and M&A would be helpful as well. Candidates withexperience in investment-linked products from insurance companieswill also be considered, as well as more junior candidates (for anotherrole within the same team).

IP (Patent) Specialist – Hong Kong/ChinaMNC is looking for a Brand Protection Manager who will be largelyresponsible for the company's counterfeit prevention efforts. Theseefforts are focussed on policy implementation through to investigationand enforcement of the company's IP rights. You will work closely withexternal counsel, private investigators and law enforcement. The roleis a regional one and travelling to China will be required. A backgroundin engineering/manufacturing and IP law is clearly an asset. Mandarina must.

Compliance, Hedge Fund – Hong KongOur client is one of the world's biggest hedge funds. A complianceprofessional well-versed with policy-making and implementation issought as a new addition to the existing legal team currently composedof 20 legal and compliance professionals. If you are tired of traditionalbanks, this would be an exciting opportunity that comes with a greatpackage.

PRIVATE PRACTICECorporate Finance Lawyer – Hong Kong/SingaporeTop international law firm is seeking to expand its corporate financeteam. Candidates with between 3-8 years’ PQE and an excellent trackrecord with international firms are invited to apply. The successfulcandidate should ideally have strong equity capital markets experience,in particular, transactional experience in cross border/China IPOs.Attractive salary and top potential for private practice careeradvancement.

Senior Corporate Lawyer – ShanghaiMagic Circle firm seeks a high quality PRC practice lawyer with solidinternational experience to join its PRC practice group in Shanghai.Must have at least 4 years’ PQE in extensive M&A, FDI, IPO and generalcorporate transactions. Fluent Mandarin and written Chinese are amust. Excellent career path plus competitive package.

Employment Lawyer – PRCUS law firm well-established in the region is seeking a senior employmentand labour lawyer to join its world-renowned employment team. Youshould have minimum 6 years' PQE and be familiar with PRCemployment and labour law. Based in Shanghai, you will be leadinga team of local PRC lawyers. Partnership role depending on your levelof experience.

US Capital Markets Lawyer – Hong KongTop US firm is seeking a mid-ranking capital markets lawyer to join itsestablished team in HK. JD preferred and Chinese language skills ideal.Excellent remuneration and interesting transactions on offer.

Litigation Partner – Hong KongWall Street Firm is looking to build a solid litigation practice. You shouldnot only have at least 7 years' PQE in litigation but also a book ofbusiness. Senior associates with great entrepreneurial skills will alsobe considered.

Please contact Eunice Chiu – Director, Head of Legal Practice, Asia at +852 2531 2209, Mb: +852 6077 1707 oremail [email protected]

72

Sign off >>


The United Nations and Allen & Overy have come up as winners in the popularity stakes

for students interested in a career in law. The survey, taken out by market research

company Trendence, marked Clifford Chance as the second most popular law fi rm – ranked joint sixth alongside the Government Legal Service – along with Linklaters, which was the only other law fi rm to make the top 10.

According to the 1,500 students interviewed for The Graduate Recruitment Review Law Edition 2008, bad work-life balance (45%), lack of diversity (25%) and a narrow range of work experience (20%) are putting students off from applying to law fi rms.

Money, however, featured at the bottom of the list, with just over 8% of students putting low salaries down as their reason for not wanting to work for law fi rms.

UN and A&O prove most popular with students

MOST POPULAR EMPLOYERS – ►ALL UNIVERSITIES

Ranking Company

1 United Nations

2 Allen & Overy

3 International Court of Justice

4 Crown Prosecution Service

5 Civil Service

6 Government Legal Service

6 Clifford Chance

8 Linklaters

9 Amnesty International

10 PricewaterhouseCoopers

While the South China Morning Post (SCMP) has for years

exercised admirable restraint and conservatism in the face of the front-page gore fests and sensationalist revelations of some of its competitors, the grand old dame of Hong Kong journalism does occasionally trip up.

Such as on 20 May, when it tried to neatly sidestep the judiciary and send poor old Carlson Tong Ka-Shing, joint chairman of KPMG China, directly to jail without passing go.

Reporting on the recent change in the chair of the HKSE’s listing committee, the SCMP wrote:

“The stock exchange yesterday announced the appointment of William McAfee, managing director of GE Asia Pacifi c Capital Technology Fund and Asia Pacifi c Capital (HK), as chairman of the listing committee for one year. He replaces Carlson Tong Ka-shing who has been jailed for six years.”

What the SCMP of course meant to say was:

“He replaces Carlson Tong Ka-Shing, who has served the maximum term of six years.”

The SCMP apologised and issued a clarifi cation the next day.

ALB’s 2007 China Dealmaker of the Year and Freshfi elds China managing partner Teresa Ko, who was named one of the deputies of the committee, will be pleased not to be making regular visits to Stanley Prison for advice from the former chairman.

Careers service TheLadders.co.uk recently polled 250 lawyers on a topic slightly off centre – colleague pet hates and

fi lthy habits.According to the report, stealing a colleague’s food (100%), and

fl ossing teeth with a paperclip and picking of noses (95%) came in as the most hated habits of staff, followed by bad hygiene, foul breath and dirty clothes. These were followed by:• bad language (86%)• eating smelly food (79%)• loud talking (78%)• leaving the offi ce without telling colleagues (75%)• drinking at lunchtime (73%)

A few past pet peeves that used to make the ranking are now acceptable it seems, with personal instant messaging at work, gossiping and the making of personal calls all coming in below the 70% mark.

Dirty habits

IT mastermind E James Perullo is not one to shy away from a few hard

yards. At 42 years of age, he decided to switch careers to law.

Realising it would be no easy task, he decided to keep his day job – and build an evening-hours law fi rm on the side.

Branded and trademarked as After-Hours Law, Perullo’s fi rm – Bay State Legal Services – is built on convenience for clients and is a collection of 14 lawyers and four paralegals who meet clients at the downtown Boston offi ce Monday through Friday between 6pm and 10pm.

Committee ship-shape or listing badly?

Source: The Graduate Recruitment Review Law Edition 2008

Asian Legal Business Jun 2008

Documents

Transcript of Asian Legal Business Jun 2008