BOUNCING BACK IPO market to recover in 2017

OLD MEETS NEW Offshore law firms tap into Islamic finance boom

BUILDING BATTLES As construction booms in Asia, so do disputes

THE CLASS OF 2017

MCI (P) 060/02/2017 issn 0219 – 6875 KDN PPS 1867/10/2015(025606) Photos from Hong Kong Anti-Corruption Forum 2016

SAVE THE DATE FOR THIS NOT-TO-BE MISSED ANTI-CORRUPTION FORUM

Asian Legal Business is proud to present the BENEFITS OF ATTENDING: Hong Kong Anti-Corruption Forum on 23 March • Keynote address by Judge from the High Court 2017. This annual forum gathers legal experts, in- of Hong Kong house compliance professionals and government • Key insight into the latest anti-corruption and leaders together to discuss pertinent issues, anti-bribery issues from Hong Kong and the corruption investigations and enforcement trends Greater China region across Hong Kong and the Greater China. • Network with senior in-house counsels, lawyers and business leaders who are on top of their Hear about recent anti-graft initiatives, explore game GUEST OF HONOUR: various measures and practical solutions to • In-depth workshops focusing on the latest The Honourable Mr Justice mitigate corruption risks and delve deep into key legal issues presented by top domestic and Kevin Zervos, SC concerns which legal/compliance professionals international law firms VIP networking luncheon Judge need to address to successfully safeguard and refreshments High Court of Hong Kong corporate reputations and businesses. • Speaker notes and materials provided

AGENDA AT A GLANCE: • Latest Developments in Hong Kong Anti- To register for this event, go to: Corruption Legislations and Enforcement www.regonline.com/hkanticorruption2017 Trends • Improving Third Party Risks Mitigation and For more information about this event, go to: Compliance through Enhancing Due Diligence www.legalbusinessonline.com/conferences/ for Anti-Bribery and Anti-Corruption hk-anticorruption-2017 • Achieving Internal Compliance through KEYNOTE SPEAKER: Effective Anti-Bribery & Corruption Programmes CONTACT FOR SPEAKING OPPORTUNITIES: William Tam, SC • Cross-Border M&A Transactions - Anti- Willy Leonardi Deputy Director of Public Prosecutions, Head of the Corruption Measures and Pitfalls to Avoid +65 6870 3102 Commercial Crime Sub- • Enhancing Data Security and Privacy Against [email protected] Division, Prosecutions Division Cross-Border Corruption and Bribery Risks Department of Justice • Combating Against Corruption and Bribery CONTACT FOR SPONSORSHIP OPPORTUNITIES: Crimes in Hong Kong and the Greater China Amantha Chia • Preventing Internal Fraud through Know-Your- +65 6870 3917 Customer (KYC) and AML Compliance [email protected]

WORKSHOP SPONSOR ASSOCIATE SPONSOR SUPPORTING ORGANISATION SUPPPORTING MEDIA PARTNER PROUDLY PRESENTED BY CONTENTS FEBRUARY 2017

36 An Indonesian flag is seen near a construction site in Jakarta, Indonesia. REUTERS/Darren Whiteside

COVER STORY FEATURES BRIEFS 16 12 centres (OFCs) becoming a key 3 Firms To Watch 2017 The year of the are increasingly in provider. However, The Briefing This year’s edition of rebound demand to help investors face a ALB’s annual Firms To Following a weak structure sharia- challenging legal and 4 Watch list showcases 2016, the Asia-Pacific compliant products. regulatory landscape Q&A a diverse mix of law IPO market is set to Unsurprisingly, that lawyers are firms, including an bounce back this year. offshore law firms helping them 4 Indonesian firm ALB asks lawyers in are seeing a need navigate. Asia Deals specialising in aviation key markets to predict for Islamic finance- work, a Malaysian firm trends they expect to related services grow 42 6 shining in matrimonial see in that space. as well. Construction and Appointments law, and a Japanese conflict law firm offering 24 36 As construction booms 7 a counter to the Old rules, new Friend in need in the Asian region, Startup Talk traditional law firm opportunities Indonesia’s massive so do construction- models. As the global Islamic infrastructure dreams related disputes. ALB BY RANAJIT DAM finance market grows today depend heavily speaks to experts at an impressive on outside finance, about how these can pace, offshore and Japan is fast be mitigated

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 1 HELLO, TOMORROW. Each year, the February issue has become one of the most exciting ones put by ALB simply because of how it offers a glimpse into the future of Asia’s legal industry. Since we first began our Firms to Watch feature in February 2015, interest in it has skyrocketed. From an initial class of 10 firms in the first year, we are featuring an expanded list of 15 in this edition, and it has been hard to leave out the ones that didn’t make the cut. And given that some have been more enthusiastic than others – Indonesian firms, for example, make up more than a quarter of the PUBLISHER Amantha Chia entries on this list – it is tempting to believe that we could [email protected] start a segment by region – if not by country – in the future. What the list does reflect, though, is an important shift MANAGING EDITOR in Asia’s legal industry. It wasn’t too long ago that larger Ranajit Dam [email protected] firms dominated the landscape; indeed in some countries, that is still the case. But Asia is a region buzzing with the ASSOCIATE EDITORS hum of entrepreneurship, and even the legal sector has Eileen Ang heeded the call. For a number of reasons – be it the ability [email protected] to choose clients and the kind of work, or the need to Raj Gunashekar diverge from a traditional law firm model – younger lawyers [email protected]

are getting out there and setting up shop. And clients are SENIOR DESIGNER responding: Indeed, with more personalised service from John Agra RANAJIT DAM smaller outfits, not to mention more competitive fees, [email protected] Managing Editor, what’s not to like? Asian Legal Business TRAFFIC / CIRCULATION MANAGER Where is all this fragmentation headed? Could it be but Rozidah Jambari Thomson Reuters a temporary trend, at the end of which we see consolidation, [email protected] and the industry returning to its old ways? Or is this trend permanent, and the larger firms are finding their hitherto ACCOUNT MANAGERS Shyanne Chen impregnable fortresses increasingly vulnerable? With Advertising Sales Manager (India, everything else going on in the legal industry, it would Indonesia, Malaysia, Singapore) not be difficult to imagine the latter. In which case, the (65) 6870 3253 [email protected] incumbents must stand warned – if you haven’t started worrying yet, maybe now is a good time. As for the small Henry Cheng Account Manager (Hong Kong, Korea) law firms rearing their heads and making their presence (852) 2847 2016 felt, including the 15 on this list, they might just be what [email protected] tomorrow looks like. Amy Sim Sales Manager (Japan, Singapore, Taiwan) (65) 6870 3348 [email protected]

Sardor Yangibayev Sales Executive (Philippines, Singapore, Thailand, Vietnam) (65) 6870 3190 [email protected]

SENIOR EVENTS MANAGER Julian Chiew [email protected]

Asian Legal Business is available by subscription. Please visit www.legalbusinessonline.com for details. SENIOR AWARDS AND Asian Legal Business has an audited average circulation of 11,402 as of 30 September 2016.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 OPERATIONS MANAGER accept no responsibility for loss. Tracy Li MCI (P) 060/02/2017 [email protected] issn 0219 – 6875 KDN PPS 1867/10/2015(025606)

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2 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM THE BRIEFIBRIEFSNG: YOUR MONTHLY NEED-TO-KNOW

The Russia office of Dentons has developed the concept for the first draft law on robotics in that country. Commissioned by Grishin Robotics, DENTONS the document looks to trigger a discussion on the INSURANCE LAW FIRMS IN GLOBAL ALLIANCE comprehensive legislative regulation of robotics. Four law firms from different parts of the world DRAFTS According to the law have banded together to form an alliance focusing firm, while there obvious on insurance. The new entity, Legalign Global 60% - The proportion of legal prospects for using robots departments in corporations that includes the UK-headquartered DAC Beachcroft, as autonomous human are currently using an alternative which has offices in cities like Auckland, Wellington LAW agents, these also gives rise legal service provider (ALSP) in and Singapore; Australia’s Wotton + Kearney; to a number of challenges. at least one service category, German law firm BLD Bach Langheid Dallmayr; The primary objective of according to the Thomson and Wilson Elser Moskowitz Edelman & Dicker from the concept draft law is to Reuters Legal Executive the U.S. While the four founding members offer FOR start a discussion on how Institute. The number is 51 more than just insurance advice, Legalign will focus to regulate robots in order percent for law firms. A further on the practice areas of insurance/reinsurance 21 percent of law firms and 14 to prepare for the spread of percent of corporations plan to coverage, insurance/reinsurance defence and ROBOTS emerging tech in daily life. use an ALSP in the next year. insurance regulatory and compliance.

Average annual salary of recent graduates of Cornell Law School, which ranked first in Social Finance’s (SoFi) ‘Top Law Programs - Highest Salary’ list of U.S. educational institutions. Brigham Young University was found to have the best salary-to-debt ratio, while Florida Coastal School of Law came at the bottom of that list.

Cyril Amarchand “While every sovereign nation has Mangaldas has signed the right to secure its borders, an agreement with Canada’s Kira Systems, any specific enforcement efforts a machine learning must avoid sweeping bans based software provider, possibly becoming on religion or national origin.” the first law firm in Linda A. Klein, American Bar Association president, India to embrace on Donald Trump’s immigration ban artificial intelligence. Kira is expected to help the firm provide 45% - POTENTIALLY THE PROPORTION OF LAWYERS certain services more ROAMING COURTHOUSE CORRIDORS IN INDIA WHO ARE efficiently, quickly and FAKE, ACCORDING TO A VERIFICATION DRIVE CONDUCTED accurately to clients. BY THE COUNTRY’S BAR COUNCIL.

LEGALBUSINESSONLINE.COM ASIANASIAN LEGAL BUSINESSBUSINESS – FEBRUARY 2017 3 BRIEFS compares favourably to the ten concentrating our resource in areas fee-earners we had immediately where we see profitable growth. MANAGING PARTNER Q&A: INCE before the departures. No one has Incisive Law has enhanced and left the team at large since, which consolidated its shipping litigation demonstrates that we have a core team to better support our clients. of extremely committed people We have future-proofed the Ince ‘WE NOW HAVE A DYNAMIC who have worked hard together Law Alliance by moving away from to make a success of the business one to multiple rainmakers, who and their careers. Together with all work together for the good AND FRIENDLY TEAM’ our alliance partners at Incisive of the alliance. Since November, Law, we now have a dynamic and they have acted on a number of friendly team who fit in well with high profile matters, including the our inclusive and collegiate culture. arrest of Hanjin New York following The financial year 2015/16 was a difficult a collision in Singapore waters, one for Ince & Co. Globally, it announced a 4 How would you describe the which was investigated by the Ince percent drop in revenue – which followed an 8 strategy behind the various hires? casualty team; and setting aside percent fall in 2014/15 – while the Singapore What do they add to the office, the arrest of the vessel CS Stealth, office saw a number of high-profile departures. individually and collectively? on which Incisive Law successfully These included Martin David, Ince’s former The new hires are very much in line obtained damages for wrongful Asia-Pacific energy head who moved to Baker with Ince & Co’s global strategy of arrest for our clients. & McKenzie.Wong & Leow, as well as then- Incisive Law has also hired managing partner Richard Lovell, and Mohan two directors with experience in Subbaraman, head of Ince’s local alliance firm, insolvency matters. The Swiber who both left for Reed Smith. “We have future-proofed judicial management and the Fast forward to today, and the picture looks the Ince Law Alliance by Hanjin insolvency have kept them much rosier. Globally, the firm expects to see a moving away from one extremely busy, so the decision to 15 percent year-on-year increase in turnover for to multiple rainmakers, push forward in this area is already 2016/17, and the Singapore office has become paying off. profitable. In the past three months, Ince Law who all work together On the Ince side of the alliance, Alliance – the Singapore joint law venture for the good of the we have strengthened our finance between Ince & Co and local firm Incisive Law alliance.” — John Simpson capability by promoting one of our – has hired a director from Allen & Gledhill and senior lawyers to the partnership. a partner from Oon & Bazul. And managing The finance team has been partner John Simpson, who succeeded Lovell involved in a number of high-profile in 2015, tells ALB that the mood is “excellent.” transactions, including the $360 million financing for the purchase How is the current mood at the Singapore of two LNG new buildings by SPVs office? owned by BW Pavilion. The Ince The mood in the office is excellent; our finance team will also be joined lawyers are busy and we are making a profit. by a senior lawyer with in-depth Our Singapore office now comprises 13 fee- experience in FPSO and port and earners, and another will join in February. This infrastructure projects on Feb. 1

$22 BLN $600 MLN $1.3 BLN $830 MLN SpiceJet’s purchase of PTT’s purchase of a five-year Kohlberg Kravis Roberts’ Golden Meditech’s sale of its MAX 737 aircraft from Boeing oil-backed loan with buyout of Hitachi Koki stake in China Cord Blood Deal Type: M&A PetroEcuador Deal Type: M&A Deal Type: M&A Firms: Kaye Scholer; Link Legal Deal Type: Loan Firms: Simpson Thacher & Firms: Shearman & Sterling; ASIA India Law Services Firms: Ashurst; Hogan Lovells Bartlett; Mori Hamada & Zhong Lun Jurisdictions: India, U.S. Jurisdictions: Thailand, Matsumoto; Nishimura & Asahi Jurisdictions: Hong Kong, DEALS Ecuador Jurisdictions: Japan, U.S. China

4 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM BRIEFS to enhance our asset and project have committed staff who have finance offering. full transparency of their career Finally, we have expanded progression and the value they HONG KONG REGULATOR SUES the Ince disputes team with a bring to our clients, their peers STANCHART, UBS, OTHERS OVER partner hire to enhance our ability and the business at large. This has CHINA FORESTRY IPO to represent international trade allowed us all to concentrate on clients, with a particular emphasis our clients and to ensure that we on the Chinese market. deliver the best possible service to This growth will complement them, which is the only way that we our existing shipping and oil and gas will continue to be successful. disputes team, which is currently The camaraderie of the office dealing with some high-profile is one of the best things to come offshore oil and gas construction out of the challenges of last year. and shipbuilding arbitrations. After 17 years at the firm, initiating change was not the easy choice, but You’ve been managing partner for our new culture is something that REUTERS/Bobby Yip about a year now. What has the rarely goes unnoticed. While it was stint so far been like? a challenging first six months at Hong Kong’s securities regulator has filed a suit The first few months were a steep the helm, there’s not a lot I would against Standard Chartered Plc, UBS Group AG learning curve, and I’m grateful have done differently. Personally and four other parties over the 2009 IPO of for the support of my partners, in and professionally, I’ve grown a timber company China Forestry Holdings Co particular Martin Brown [business great deal, and I am grateful for the Ltd, according to court documents. and finance head, Singapore opportunity to do so. In all honesty, The Securities and Futures Commission office]. I concentrated on retaining the challenges made me even more (SFC) is seeking unspecified damages for “market misconduct” over the IPO prospectus our team of talented staff and determined to succeed. of China Forestry filed in November 2009, as lawyers by sharing with them my well as the company’s 2009 annual report, its vision for our office and clearly What is your strategy for the 2009 annual results and the results for the first defining the role I saw [for each of Singapore office in 2017 and six months of 2010, according to the documents them]. Possibly most importantly, beyond? filed with Hong Kong’s High Court on Jan. 16. Martin Brown and I committed to After consolidating our business The SFC also sued China Forestry itself, transparency within the Singapore during the first half of the financial the company’s two co-founders Li Kwok Cheong and Li Han Chun, and KPMG, which was China office as well as reopening the year (and investing in a number Forestry’s auditor, the court documents show. communication channel between of strategic hires), our aim is Standard Chartered and UBS separately Singapore and our HQ in London. to increase the transactional disclosed late last year that the SFC was probing The support from my London and capabilities of the Singapore their role as sponsors of unnamed IPOs and that Asian counterparts continues office in line with our global the regulator’s actions could result in financial to be more strategic and more strategy. We have also expanded consequences. forthcoming. our international trade disputes China Forestry raised $216 million in the 2009 IPO, but its shares have been suspended By continually investing offering in Singapore, which helps since January 2011 and the company is now in in delivering the vision we set us to broaden our range of services liquidation and in the process of getting delisted out in the early days, we have within the industries in which we after the company’s auditor said it had found strengthened our team and now specialise. possible accounting irregularities.

$819 MLN $5.2 BLN $545 MLN $1.6 BLN Sanpower Group’s acquisition Takeda Pharmaceutical’s Funding for Kalsel coal-fired Brookfield Infrastructure’s acquisition of of Dendreon unit takeover of Ariad power plant in Indonesia Reliance Communications’ mobile towers Deal Type: M&A Pharmaceuticals Deal Type: Project Finance business Firms: DLA Piper; Hogan Deal Type: M&A Firms: Shearman & Sterling; Deal Type: M&A Lovells Firms: Cleary Gottlieb Steen & Milbank, Tweed, Hadley & Firms: J. Sagar Associates, Herbert Smith Jurisdictions: China, Canada, Hamilton; Paul, Weiss, Rifkind, McCloy Freehills, Shardul Amarchand Mangaldas & Co U.S. Wharton & Garrison Jurisdictions: Indonesia, Jurisdictions: India, Canada Jurisdictions: Japan, U.S. Singapore

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 5 BRIEFS APPOINTMENTS

NATHAN BUSH GEOFFREY CHAN NORMAN HO Leaving: O’Melveny & Leaving: Ropes & Gray Leaving: Dentons Rodyk Myers Joining: Skadden, Arps, Joining: Rajah & Tann Joining: DLA Piper Slate, Meagher & Flom Practice: Corporate real Practice: Investigations Practice: Funds estate SINGAPORE CLEARS PATH FOR and antitrust Location: Hong Kong Location: Singapore THIRD-PARTY FUNDING Location: Singapore

Singapore’s parliament has passed two separate bills – the Civil Law (Amendment) Bill 2016 and the Civil Law (Third-Party Funding) Regulations 2016, clearing the way for third- party funding (TPF) in certain areas of dispute resolution. This latest move is expected to consolidate Singapore’s position as a leading centre for dispute resolution in the region. TPF is expected to allow parties to a dispute to mitigate the risks MASAKAZU IWAKURA BRIAN LAW EDWIN LUK Leaving: Nishimura & Leaving: Wong & Leaving: Orrick, of litigation, manage cash-flow and pursue Asahi Partners Herrington & Sutcliffe meritorious claims that they might not be able Joining: TMI Associates Joining: Harry Elias Joining: Morgan Lewis to pursue without sufficient funding. Practice: Corporate Partnership & Bockius M&A Practice: Intellectual Practice: Capital The Civil Law (Amendment) Bill 2016 will Location: Tokyo property Markets allow third-party funding in certain categories of Location: Singapore Location: Hong Kong dispute resolution proceedings, while the Civil Law (Third-Party Funding) Regulations 2016 lay out the categories of dispute resolution in which third-party funding is allowed, including international arbitration proceedings, and court and mediation proceedings. It also sets the qualifications needed to qualify as a third- party funder. Senior Minister of State for Law Indranee Rajah was quoted as saying in local media that TPF would “offer businesses an additional financing and risk management tool when engaged in the relevant categories of ROBERT WOLL MARK WONG INKA KIRANA Leaving: Deacons Leaving: Rajah & Tann Firm: AKSET proceedings. This includes the financing of valid Joining: Mayer Brown Joining: Duane Morris & Promotion: Partner claims which they may otherwise not pursue due JSM Selvam Practice: Real estate to financial constraints. Businesses that seek to Practice: Corporate and Practice: Corporate and Location: Jakarta access third-party funding will typically have to Securities Energy undergo a rigorous process of claim assessment Location: Hong Kong Location: Singapore by the chosen funder.”

6 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM SPONSORED ARTICLE

Third Party Funding in International Arbitration: Developments in Singapore and Hong Kong

On 10 January 2017, the Parliament of Singapore Compared to the rather light-touch approach of passed the Civil Law (Amendment) Bill No. the Singapore Bill, the Hong Kong Bill is strikingly 38/2016 for Third Party Funding for Arbitration dense. The bill ensures that third party funding of and Related Proceedings (the “Singapore Bill”). arbitration is no longer prohibited by the common The very next day, Hong Kong Legislative Council law doctrines of champerty and maintenance. In proceeded to the second reading of the Arbitration this context, arbitration includes arbitration- and Mediation Legislation (Third Party Funding) related court proceedings, proceedings before an (Amendment) Bill 2016 (the “Hong Kong Bill”), emergency arbitrator and mediation proceedings. which should be adopted later this year. The Hong Kong Bill also applies to services rendered in Hong Kong for arbitration seated Acknowledging the fact that third party funding outside Hong Kong. has become an increasingly popular and important instrument for users of international An innovative feature of the Hong Kong Bill is arbitration, Singapore and Hong Kong have taken the creation of a non-binding code of practice steps towards formally permitting the use of third containing standards and practice for an initial party funding for international arbitration in order three-year period. The standards include capital to strengthen their positions as leading dispute adequacy requirements, provisions on conflicts of resolution centres, not only in Asia but worldwide. DR. CHRISTOPHER BOOG interest, confidentiality and privilege, disclosure, Originally intended for impecunious parties who Managing Director/Partner liability for adverse costs, grounds for termination would otherwise be unable to bring their claims [email protected] and a complaints procedure. Failure to comply in arbitration, third party funding is now often with a provision of the code will not, of itself, used as a financial and risk management tool to “render any person liable to any judicial or other manage cash flow and externalize the financial proceedings”. However, it may be taken into burden, and the risks associated therewith, account by any court or arbitral tribunal if it is of time-consuming and costly arbitration relevant to a question being decided. proceedings. Contrary to the Singapore Bill, the Hong Kong Bill The funding of litigation by parties unrelated to requires funded parties to disclose the existence the dispute has traditionally been forbidden in or ending of a third party funding contract (but Singapore and Hong Kong by the longstanding not its content) as well as the identity of their doctrines of maintenance and champerty. While funder at the outset of the proceedings. It also their overall aims are similar, i.e. permitting expressly permits the communication to the third party funding for arbitration and related funder of information about the proceedings and proceedings, the proposed legislations differ in the award. their form and content. In sum, notwithstanding their similar objectives, The Singapore Bill abolishes the common law Singapore and Hong Kong have chosen different torts of champerty and maintenance. Third party paths to orchestrate the regulation of third funding contracts concluded with “qualifying JULIE RANEDA party funding in international arbitration in their Third-Party Funders” for certain “prescribed Counsel respective jurisdictions. The actual conditions dispute resolution proceedings” are no longer [email protected] of the implementation of the new regulations illegal. While not defined, it is understood that remain to be seen. In any event, the above the dispute resolution proceedings envisaged developments are welcome news for the arbitral under the new bill include international community, in particular users of international arbitration proceedings and related court and a court or tribunal for relief from such sanctions, arbitration in Asia. They offer businesses an mediation proceedings, leaving the door open to in case the disqualification was accidental or alternative source of financing and a way to the possibility of third party funding for domestic inadvertent or if it is just and equitable to grant manage the financial risk of legal proceedings, arbitration and litigation in the future. relief on other grounds. and bring the leading Asian seats of arbitration in line with other leading seats around the globe. To qualify as a Third-Party Funder in Singapore, Finally, related amendments are made to the funder’s principal business must be Singapore’s Legal Profession (Professional litigation funding. It must have access to funds Conduct) Rules. They confirm that lawyers are readily available to fund the dispute resolution entitled to introduce or refer a Third-Party Funder Schellenberg Wittmer Pte Ltd / proceedings pursuant to a third party funding to their clients, provided that the lawyer does not Attorneys at Law agreement. The Singapore Bill imposes sanctions derive any direct financial benefit therefrom. They 6 Battery Road, #37-02, Singapore 049909 on funders who cease to comply with those can also draft and advise on third party funding T: (65) 6580 2240 requirements, preventing them from enforcing agreements and act for their clients in any dispute F: (65) 6580 2241 their rights. In this case, the funders can apply to arising out of the funding arrangement. W: www.swlegal.sg

LEGALBUSINESSONLINE.COM ASIANASIAN LEGAL BUSINESSBUSINESS – FEBRUARY 2017 7 BRIEFS GE ROLLS OUT INNOVATIVE TOOL STARTUP TALK FOR SELECTING OUTSIDE COUNSEL LEGALDESK.COM YEAR OF FOUNDING: General Electric (GE) has created an intranet website aimed 2014 at gathering information and reports to enable company lawyers to HEADQUARTERS: effectively assess and choose outside counsel. Over 800 in-house lawyers can access the internal site – called Bengaluru, India GE Select Connect – so they can check a pool of ”preferred providers” and evaluate the outside counsels’ track record with GE, according to FOUNDERS: a report from Bloomberg. Krupesh Bhat & Ashok Kadsur This tool showcases over 200 of GE’s outside law firms, which have Facebook-like profiles that detail basic firm details, feedback WHAT IT DOES: from GE lawyers, diversity staffing levels, hourly fees as well as A do-it-yourself (DIY) legal drafting platform that helps discounts the company has received. individuals draft legal agreements using its system at its heart. LegalDesk now provides a suite of legal- To provide feedback, the tool allows GE lawyers to choose from a related services. smiley face, a sad face and a neutral face – reflecting their experience with the outside counsel, Bloomberg said. Lawyers can also use a CAPITAL RAISED TILL DATE: word bank to further describe their level of satisfaction, with positive Currently in a bootstrapping phase and exploring options ranging from “efficiency” and “expertise” and negative fundraising options with investors options including ”too expensive” and ”poor judgment.” The outside firms have inked an agreement with GE about their KEY CLIENTS: negotiated rates and other benefits over a specific timeframe. A B2C startup, it receives more than 120,000 visitors a month and claims to have more than 30,000 customers

HOW THE IDEA CAME ABOUT: When Bhat moved back to India after having spent MORGAN LEWIS MAKES a decade in the U.S., he was surprised at the low MAJOR CHINA PLAY WITH level of technology adoption in the Indian legal and ORRICK SWOOP government sectors. He perceived a large gap where technology could play a significant role in solving those Morgan Lewis & Bockius has problems. Along with his classmate Ashok Kadsur, he declared its intention of becoming founded LegalDesk. a serious player in the Greater China space after snapping up nine THE JOURNEY SO FAR: partners from Orrick, Herrington & The company started with a DIY system to draft legal Sutcliffe, and announcing plans for agreements and evolved into a complete legal platform a Hong Kong office. that customers can use to draft, opt for stamp paper The nine-partner team is led services and electronically sign their documents. It by Edwin Luk, formerly the global Additionally, Morgan Lewis also connects legal service providers with customers. head of Orrick’s capital markets will soon be filing an application LegalDesk is also actively working with the Indian group, and Maurice Hoo, who was to become a registered foreign law government to simplify some documentation the global practice group co-leader firm in Hong Kong, and will seek procedures such as notarisations and registrations. of the M&A and PE practice group approval along with the newly at his former firm. founded local law firm Luk and The other seven partners are Partners, which set up by Luk and Ning Zhang (Beijing and Hong others. Kong), June Chan (Hong Kong), The firm also plans to add “IF YOU’RE LOOKING FOR A ONE-STOP- Keith Cheung (Hong Kong), Connie 40 more fee-earners to its existing SHOP PORTAL FOR ALL YOUR LEGAL Cheung (Hong Kong), Louise Liu 30-lawyer team in China. Morgan (Hong Kong), Billy Wong (Hong Lewis opened in Shanghai office in DOCUMENTATION NEEDS, THESE GUYS Kong) and Mathew Lewis (Beijing September last year after poaching DO A FAIR JOB.” – LEGALDESK USER and Shanghai). from Dentons’ branch there.

8 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM SPONSORED ARTICLE

Time lines in the new Indian Arbitration law

India has finally brought in various means, the tribunal can dispense with changes to its arbitration law, Arbitration all the technical formalities and adopt a & Conciliation Act, 1996 by introducing an procedure which ensures an expeditious amending Act, Arbitration & Conciliation disposal of the case. (Amendment) Act 2015. All of us are aware that India is a signatory to New York In addition to that, India has the largest convention on enforcement of Foreign number of Adhoc arbitrations, since even awards and the arbitration law of India now institutional arbitration is not very is similar to the UNCITRAL Model law. popular in India. In Adhoc arbitrations, But the major challenges for the parties the powers to appoint an arbitrator lies arbitrating in Indian seats are the prolonged with either the High Court in Domestic litigations in the supervising courts and the arbitrations and with the Supreme Court prolonged arbitration proceedings. Many in case of International Commercial of us are aware that the supervising Courts arbitrations. But the appointment of in India were taking years for disposing arbitrator application had to wait for years of, each of the applications filed before to get concluded by the courts. Hence the them, which frustrated the arbitrating amendment Act has fixed a time limit of 60 parties. More over the arbitration panels days to make an appointment of arbitrator were taking years to finally decide each if by the Court, from the date of service of the applications & claims of the parties. In notice to the respondent. The above said view of the above said situation, the law amendment has brought in efficiency in makers of India realized that specifying the S RAVI SHANKAR appointment of arbitrators by the courts. time lines to complete important stages Managing Partner of the arbitration can alone, improve the [email protected] In addition to the above said time lines, efficiency of the arbitration process in India. specification of fees for arbitrators based Hence the amending Act brought in various on the value of the dispute by the Act by time lines and the author is dealing with introducing Fourth schedule, mandatory a few of them which have impact over the Over and above the 18 months’ period to disclosure relating to the relationship of “India seated International Arbitrations” complete an arbitration, only the supervising arbitrator with the parties and their counsel, and “Enforcement of awards relating to court has the power to extend the period Regime of Costs etc., have improved the international arbitrations”. and extend the mandate of the arbitration efficiency of arbitration system in India. tribunal. While extending the period to Hence parties to Arbitrations seated in The above said amending Act inserted a complete the arbitration, the court has India, can handle the arbitrations as new section “29.A Time Limit for Arbitral powers to remove or replace one or more effectively as any other developed foreign award” and made arbitrators responsible for arbitrators based on the evidence. If the country. Due to the reduced scope of completing the arbitration within the time supervising court concludes that the delay public policy the interference by courts in limit and pronounce the final arbitration in completion of the arbitration proceedings the arbitration awards have been largely award. As per the above said Section, all is delayed because of the conduct of one or reduced. Since Indian Courts are fast in arbitrations seated in India (including more parties, then the court has powers dealing with applications seeking interim ICC, SIAC, KLRCA, IDAC India or any other to impose costs on the delaying party. orders, the non-inclusion of Emergency institution administered international or Even though many arbitrators and lawyers arbitrator provision in the amendment act, domestic arbitrations) which commenced criticize this section and corresponding time has not affected much. Hence Indian seats on or after 23rd October 2015 have to lines as not practical, this amendment has of arbitrations are becoming more attractive be completed and the final award be brought in a lot of positive changes in the there days. pronounced within a maximum period of arbitration scenario of the country. 12 months, from the date of formation of the arbitration tribunal. Hence arbitration The said Amendment has introduced Fast tribunal must plan the time lines of the track procedure in arbitration and has Law Senate arbitration, within the said 12 months’ reduced the time limit for completion of B3/73, Safdarjung Enclave, LGF, New Delhi period otherwise he will lose the mandate the fast track arbitration proceedings from 110029 India to continue as an arbitrator. In case there are one year to six months. In many arbitration 403, Tardeo AC Market, Tardeo Road, genuine and valid reasons for the delay both cases, the issues can be decided based Mumbai 400034 India the parties to the arbitration, can by consent on the documentary evidence without T: (91) 11 26102873 extend the 12 months’ period by a maximum the requirement of examination of oral E: [email protected] of 6 months. witnesses and other oral hearings. That W: www.lawsenate.com

LEGALBUSINESSONLINE.COM ASIANASIAN LEGAL BUSINESSBUSINESS – FEBRUARY 2017 9 BRIEFS

REGIONAL UPDATE: SINGAPORE

MAS PROPOSES AMENDMENTS TO THE COMPETENCY REQUIREMENTS FOR APPOINTED REPRESENTATIVES UNDER THE SECURITIES AND FUTURES ACT AND FINANCIAL ADVISERS ACT

Laborers walk to work through a field in Special Economic Zone (SEZ) at Capital market intermediaries and financial advisers are expected Chandaka industrial area on the outskirts of of Bhubaneswar, capital of to uphold high professional standards while dealing with clients, the eastern Indian state of Odisha. REUTERS/Stringer and their appointed representatives are in turn expected to be competent, fit and proper in providing financial services.

In December 2016, the Monetary Authority of Singapore (“MAS”) issued a consultation paper proposing amendments to the competency requirements for representatives who conduct regulated activities under the Securities and Futures Act (Chapter IN LIBERALISATION PUSH, INDIA MAY 289) (the “SFA”) and the Financial Advisers Act (Chapter 110) (the “FAA”). Appointed representatives are required to meet requirements set out in notices issued by MAS under the SFA or under the FAA. FACE FINAL LAW FIRM HURDLE The amendments relate to the Capital Markets and Financial Advisory Services Examination (“CMFAS”) requirements, as well as Continuing Professional Development (“CPD”) training, and India’s law firms might be the last obstacle to the are being proposed by MAS with the following principles and government’s plans to liberalise its legal industry, after considerations: the country’s most prominent law firm association sought (i) raising the competency of appointed representatives; responses from members to a recent government plan to (ii) building a culture of high ethical standards in the financial industry; and (iii) offering greater customisation and flexibility to appointed representatives to allow foreign law firms to operate within special economic fulfil their competency requirements. zones (SEZs). MAS proposes introducing ethics and skills content into the CMFAS curriculum, Last month, the government amended a rule that in addition to the current modules on rules and regulations as well as product would allow foreign law firms to operate from SEZs. knowledge. Appointed representatives will be tested on their understanding of ethical principles and responses to ambiguous situations which present potential “Some of the services of foreign lawyers that are outside conflicts of interest. They will also be required to acquire basic skills to perform their the purview of Indian regulators include advice on foreign respective roles effectively, and the additional skill contents will equip them with understanding of their regulatory obligations. law and foreign-law related transactional advisory and International arbitration,” said Manoj Kumar, founder of MAS has also proposed for the customisation and streamlining of content of the CMFAS modules so as to match the appointed representatives’ job requirements, law firm Hammurabi & Solomon. rather than by the regulated activity which they will be conducting under the SFA “The government of India has expanded the and/or FAA. MAS further proposes streamlining securities and derivatives exchange rules content in the CMFAS curriculum, so that they are principle-based in order definition of ‘services’ in the context of SEZs to include to give appointed representatives who conducts the same regulated activity but foreign lawyers, thereby permitting foreign lawyers to set trades on a number of exchanges the flexibility to do so without taking additional examinations. up offices [in those],” added Kumar, who is helping draft guidelines for the liberalisation of the legal sector. Further, in line with the expanded scope of coverage of the SFA in 2015 to regulate over-the-counter (“OTC”) derivatives contracts and other amendments to the SFA, In response, the Society of Indian Law Firms, which the CMFAS product knowledge module will be amended to cover new contents comprises the country’s 100 largest law firms, has sent on commodity, credit, spot foreign exchange and rate-based derivative contracts for appointed representatives dealing in capital markets products in respect of a questionnaire to its members seeking their response to exchange-traded and/or OTC derivatives contracts. MAS has also introduced this “sudden and significant development,” according to combined product modules for appointed representatives who wish to deal in multiple products such that they will be required to sit for fewer examinations. media reports. The questions included whether such a notification The proposed CMFAS framework will be applicable to appointed representatives who are appointed after the date of implementation of the new framework. Existing could be issued by the Department of Commerce in the appointed representatives will only need to take the revised CMFAS if they undertake first place; whether the Bar Council of India had given its new or additional regulated activities, or if there is a change in the scope of their regulated activities arising from any SFA amendments. approval and who would monitor the foreign law firms; and whether foreign law firms could practice throughout Ms. Candice Yong Ms. Choo Song Ping Legal Associate (Corporate Practice) Legal Associate (Corporate Practice) India from the SEZ, the Economic Times said. Law firms T: (65) 6322 2230 T: (65) 6322 2207 were required to give their responses by Jan. 25. F: (65) 6534 0833 F: (65) 6534 0833 E: [email protected] E: [email protected] Kumar said he expected the liberalisation process to proceed rapidly, with foreign law firms able to open offices Loo & Partners LLP in India this year. 143 Cecil Street, Level Ten, GB Building, Singapore 069542 www.loopartners.com.sg

10 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM SPONSORED ARTICLE

2017: transaction year for infrastructure provision projects in Indonesia

Infrastructure investment in Indonesia is always interested include but may not be limited to Land open for wide opportunities. In reference to Acquisition, Government Guarantee and Support, the National Planning Board (Bappenas), it is Return on Investment (through Tariff or Availability estimated that developing proper infrastructure Payment), Selection of Investors, Risk Transfer requires at least USD 366.7 billion from 2015 to Mechanism, and the limitations that investors 2019. 63% of this amount will be sourced from cannot do. state, regional and SOE budget, and the remaining 37% will be covered by private investors. Yet, On the legal aspects, DKNS Lawyers has hands- infrastructure provisions are exposed to various on experience in assisting clients in PPP project challenges such as regulatory, human capacity, initiatives and indeed advise on the above features. bueraucracy and so on. Taking these issues into DKNS Lawyers also consist of lawyers who were consideration, the Government of Indonesia involved in drafting PR 38/2015 and experienced (GoI) along with other stakeholders have done DONKE DAVID in a number of important sectors such as so many initiatives such as preparing projects in RIDHON KAHFI HARRISON transportation and energy. Hence, DKNS Lawyers various sectors to enable these projects ready to Partner International Advisor will be please in taking up your queries concerning be transacted in 2017. [email protected] [email protected] your investment plans in Indonesian infrastructure provision especially through PPP. Also DKNS has The most challenging infrastructure provision is various exposures in other legal aspects and will through private participation initiative scheme or be delighted to serve you. For more information what is called by Public Private Partnership (PPP). of PPP projects in Indonesia which open up wide about our line of services, kindly visit our website Although it is challenging, the opportunities are opportunities for investors and other stakeholders. on www.dknslawyers.com apparent. According to the Presidential Regulation No.38 of 2015 on PPP (PR 38/2015), there are Investing in PPP projects in Indonesia requires the at least 19 infrastructure sectors where private investors to pay attention to several aspects such investors can invest their money in. According to as technical, financial, environmental and legal. In DK & Situmorang Lawyers Bappenas, there are 16 PPP projects are finishing particular to the legal aspects, investing in such Wisma Bakrie 2, 12th Floor, Jl. HR. Rasuna Said their final preparation and ready to offer expectedly projects shall consider numerous laws/regulations Kav. B-2, Jakarta 12940 - Indonesia this year, 5 are tendered soon, 6 have reached namely PPP regulations, regional regulations, T: (62) 21 2513401, 2513402 financial close and 12 under construction. Hence, sectoral regulations and inter-sectoral regulations. F: (62) 21 2513403 it may be considered that this year will be the rise Some important features that investors may be E: [email protected]

SURVEY: AWARENESS OF SINGAPORE GOVERNING LAW ON THE RISE ACROSS REGION

Singapore is the venue New York law came in third included commercial law of choice for dispute resolution with 7 percent, while Hong “Fifty-two percent of practitioners, in-house for more than half of Kong law had 3 percent. counsel who handle cross- commercial law practitioners Those who selected participants chose border transactions in and in-house counsel who Singapore law listed its Singapore as a Singapore as well as public deal with cross-border “established legal system preferred venue for sector legal professionals in transactions in Singapore and the certainty of law” as dispute resolution, the city-state and around the and the region, according to a significant reasons for their compared with 22 region. recent survey commissioned choice. percent who picked The findings also showed by the Singapore Academy of The report also indicated that 74 percent of respondents Law. that 52 percent of participants Hong Kong.” believed that their cross- The survey also found chose Singapore as a border business in Asia had that “awareness of choosing preferred venue for dispute gone up in recent years. Singapore law as governing resolution, compared with For dispute resolution, 71 law for cross-border 22 percent who picked percent said their preferred transactions” is on the rise, Hong Kong. Respondents method was arbitration, with a quarter of respondents cited Singapore’s proximity, followed by litigation (24 selecting it as their preferred efficiency and neutrality/ percent) and mediation (5 choice for law governing fairness as the leading reasons percent). Enforceability, contracts. However English for their choice. confidentiality and fairness law remained the top pick, The 500 respondents stood as leading factors for with 48 choosing the same. to the independent study choosing arbitration.

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 11 CAPITAL MARKETS

The year 2016 was a weak the rapid build-up in corporate listings in the city next year include one for initial public offerings in debt and cushion its slowing those of Lufax and Alibaba’s Ant the Asia-Pacific region, but all signs economy. “With a strong pipeline Financial unit, which was last point to a rebound in the Year of the of companies ready to list and valued at $60 billion. Either of Rooster. Deal flow is expected to investor sentiment unaffected by those IPOs would be the largest get a boost from mainland China’s political shockwaves elsewhere in by a financial technology company recent move to relax approvals the world, we expect Greater China globally, says Reuters. Chinese for IPOs, according to Reuters, as exchanges to remain the world’s startups that have raised billions the country seeks to help control most active markets for IPOs in of dollars and experienced fast 2017,” says Ringo Choi, Asia-Pacific growth over the past several years IPO leader at consulting firm EY. are also lining up IPOs in 2017 or Equity capital market activity 2018. in Asia Pacific dropped in 2016 “Although we have seen the as weak IPO performance curbed increase of the number of A-share demand for new listings in the IPOs, Hong Kong will still maintain region and listed companies its position as the most attractive slashed secondary offerings overseas listing venue for most because of volatile markets. The of the Chinese companies,” says $207.4 billion of equity offerings Tim Wang, co-managing partner THE YEAR were the lowest since the $159 of Clifford Chance’s China offices. billion raised in 2013, according to “Financial institutions will continue preliminary Thomson Reuters data. to lead the league table… and we Nevertheless, Asia Pacific was the will see more small-to-medium epicenter of global IPO activity last sized IPOs, Chinese fintech year, accounting for 54 percent companies will line up for Hong of global capital raised and 60 Kong listings in the next couple of OF THE percent of IPOs by volume, marking years, given their rapid business the region’s third year of successive growth in recent years.” gain in share of global activity by Financial services companies deal number, according to EY. And that dominated Asian equity with investor confidence cautiously offerings in 2016 will continue the creeping back, 2017 could be even trend next year, reports Reuters. better. Likely Hong Kong IPOs include REBOUND Guangzhou Rural Commercial Following a weak 2016, the Asia- Bank’s up to $1.5 billion deal, an up Pacific IPO market is set to bounce HONG KONG to $1 billion IPO from China United back this year. ALB asks lawyers in Insurance Holding Corp and Ping Hong Kong, the world’s top venue An Securities’ up to $1 billion deal. key markets to predict trends they for IPOs for a second straight year, Apart from IPOs, some already- expect to see in that space. is forecast to have about $26 billion listed financial services companies of new listings in 2017, slightly are expected to seek secondary BY RANAJIT DAM, higher than the $25 billion in 2016, offerings in different exchanges WITH ADDITIONAL INPUTS FROM REUTERS according to EY. Potential large to raise money for expansion,

12 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM CAPITAL MARKETS including Chinese brokerage too much power and potentially “Further, the Japanese government Guotai Junan Securities Co Ltd, stymie the IPO market. This has put started to elect the lead managers which plans to raise at least $2 them at odds with asset managers for its sales of Japan Post Holding billion in Hong Kong. and corporate governance activists, shares. If the deal size is the same Of course, the big point of who have come out publicly in as its IPO in 2015, the follow-on discussion at present is a plan to favour of reform. offering may have negative impact reform the city’s listing regulation by on the IPO market this year.” Securities and Futures Commission Suzuki expects pre-IPO (SFC) and Hong Kong Exchanges & JAPAN roadshows and the distribution of Clearing (HKEx). In June last year, pre-deal research report, which the two bodies proposed changes Last year, Japan’s largest IPO was were both made legally possible to Hong Kong’s stock market that of Kyushu Railway, which in 2015, to become increasingly listing regime that are designed to raised around $4 billion as the common. “The Tokyo Stock curb the regulatory powers of the government privatised part of its Exchange (TSE) announced exchange and hand more authority railway system. While it made guidelines for re-listing after MBO to the watchdog, says Reuters. The waves as the first railway listing last year, after considering several proposals aim to address possible since the 1990s, the Kyushu IPO precedents which it thinks were conflicts of interest in the current was dwarfed by the Japan Post IPO inappropriate from the general framework, where HKEX acts as from 2015 that raised $12 billion. investors’ point of view,” he adds. both the profit-driven market Between these two IPOs, however, “The TSE is not expected to change operator and regulator of IPOs. the listings generated considerable the past practice drastically, but However, the proposal was enthusiasm for new issues. And we need to check whether this is mired amid growing controversy analysts say that 2017 might even indeed the case.” last year, pitting the city’s banks and see a hat trick of massive state The Chamber of Hong Kong Listed asset sales, either through a second Companies (CHKLC), who oppose tranche of Japan Post or Tokyo KOREA the changes, against international Metro, whose privatisation has long asset managers, who back the been speculated. South Korea is expected to reform, according to Reuters. The “The IPO market will be have a strong year for new CHKLC and the banking sector generally active this year due to listings, with mobile are pushing back on the reforms, high market price, while this is gaming company which they fear could give the SFC subject to the uncertainty of the Netmarble policies of the new U.S. government Games looking to raise $1.8 and slower growth of China,” says billion and Lotte Group likely Katsumasa Suzuki, a partner reviving the $4.5 billion IPO of with Mori Hamada & Matsumoto. Hotel Lotte, according to Reuters.

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 13 CAPITAL MARKETS

“The SGX introduced rules some years ago benefiting finance advisor Duff & Phelps Singapore. Major expected IPOs mineral, oil and gas companies in their listings and oil and gas this year include that of Singapore industry listings could return in the mid-term once the oil price Telecommunications Ltd’s environment stabilises,” broadband unit NetLink Trust – a deal that could raise about $2.5 — Sharon Lau, Latham & Watkins billion. “SGX will likely see a few jumbo listings, mostly in the REIT and business trust space,” says Sharon Lau, the Singapore office Another anticipated big IPO is growth capabilities of startups, managing partner of Latham & that of Celltrion Healthcare, the those startups are also allowed to Watkins. “As these are yield-driven marketing and sales affiliate of list on Kosdaq.” investments, investor interest is biopharmaceutical giant Celltrion, Lee also expects the Korea expected to remain strong since which has applied to list on the Exchange (KRX) will consider macroeconomic factors remain Kosdaq market, or the Korean making the overall listing uncertain, and the SGX benefits equivalent of Nasdaq in the U.S. requirements more flexible. “We from being an established market Meanwhile, the two affiliates of understand the KRX wants more for such vehicles.” Korea Electric Power Corp. – Korea new technology and biotech Last year, SGX announced a South-East Power Co. and Korea companies on the market, and is plan to allow listings of companies East-West Power Co. – are also making various efforts to open the with different classes of shares expected to list, one in each half of gates to them.” as it looked to attract IPOs. the year. While this is expected to result “It is expected that the Korean in more companies considering IPO market will have another big SINGAPORE Singapore and help distinguish year – the biggest since 2010 – the market from regional peers, when total offering value reached According to a Reuters report, the structures have been criticised 10 trillion won ($860 million) in Singapore is set to be 2017’s by corporate governance activists 2010,” says Jin Kook Lee, a partner hottest spot for IPOs in Southeast as they typically give one set at Yulchon. “Market players are Asia. The Singapore Exchange of shareholders greater voting anticipating about 13 trillion won (SGX) has promoted itself as a rights than others. “The investor to be offered this year. Due to a centre for business trusts and real community is currently waiting to weak global economy and a rather estate investment trusts (REITs), see whether SGX will allow dual- inactive capital market, a number of which offer stable dividends. That class share structures, which has big Korean companies reluctantly has helped it partly make up for a been the subject of significant shelved their listing plans last year. drop in major share sales as large public commentary,” says Lau. We expect to see many of those Chinese firms favour the higher She adds that there is currently companies getting back on track, valuations and liquidity of Hong interest in IPOs from companies in and see the RFPs for underwriters Kong. the consumer sector, particularly and legal counsel being delivered Fundraising via IPOs in in FMCG. “Valuations of existing from other applicants.” Singapore hit $1.7 billion last year, consumer companies globally are In addition, startups have up fivefold from 2015 when it relatively high which could spur on received a shot in the arm, says Lee, slumped to its lowest since 1998, other aspiring listing candidates,” from the Kosdaq’s so-called “Tesla Thomson Reuters data showed. says Lau. “In particular, mass Test.” “This allows start-ups – both “REITs and business trusts market products continue to be from Korea and overseas – which have been the flavour for some relatively stable as they are priced haven’t recorded any profits to be time because they give a steady for consumption from the low to listed, only if they hit the threshold income stream for investors, and middle-income segment of the market cap and show growth typically, the play in Singapore population.” capabilities,” he notes. “Also from has been dividend-focused rather Lau additionally notes that it 2017, if the big investment banks, in than pure capital gains-focused,” will be interesting to see if recent their capacity as lead underwriter, says Srividya Gopalakrishnan, oil production output cuts on will evaluate and recommend the managing director of corporate have any short to mid-term impact

14 ASIAN LEGAL BUSINESSS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM CAPITAL MARKETS on the oil and gas industry. “The listing of mineral, oil and gas (MOG) SGX introduced rules some years corporations, which was issued by INDONESIA ago benefiting mineral, oil and the Securities Commission Malaysia gas companies in their listings and last month. “It imposes additional The jury is out as to the IPO oil and gas industry listings could requirements for MOG corporations prospects for Indonesia in 2017. return in the mid-term once the oil to be eligible for listing on the local Analysts believe a significant price environment stabilises,” she bourse, such as demonstrating fluctuation in the rupiah over the says. adequate MOG assets under their past year could dampen appetite portfolio, as well as introduce new for listings in the country, where funding options,” says Gilbert Gan, fundraising rose more than 50 MALAYSIA partner and head of the Corporate percent to top $1 billion last year. Finance & Securities practice group “The capital markets in Indonesia Last year, just $238 million was at Zaid Ibrahim & Co. are significantly influenced by raised in Kuala Lumpur IPOs, Additionally, the Companies international market conditions, the lowest since 2008, Thomson Act 2016 is expected to come and the political and economic Reuters data shows. This is a into force very soon. “The revised environments at home,” says Putu particularly big comedown for companies legislation makes long- Suryastuti, a partner at Assegaf Malaysia, which was Asia’s IPO awaited major revamps to company Hamzah & Partners (AHP). capital in 2012 with blockbuster law in Malaysia, such as introducing Last year, Indonesia’s Financial listings from Felda Global Ventures a no-par value regime, making Services Authority issued a new Holdings Bhd and IHH Healthcare company constitutions optional, regulation in 2016 on annual Bhd. permitting single shareholder and reporting requirements that “Malaysian political crisis, director companies, and creating stipulates greater disclosure in volatile crude oil prices, Brexit and new insolvent company rescue the annual report. “It is expected the U.S. presidential election are options,” says Gan. that these regulations will help some of the factors that affected According to Ong, the recovery boost investor confidence in the the market in 2016 to the extent in crude oil prices will definitely see Indonesian capital markets,” says that less than 1 billion ringgit was an increase in the number of oil and Suryastuti. raised from the 11 IPOs on Bursa gas – and related – companies She adds that the Malaysia,” says Ong Yee Shin, a going for listing in 2017. “This is infrastructure, property and lawyer with Halim Hong & Quek. because Malaysia is the only net commodities sectors are expected “These factors have caused many oil exporter in Asia and the world’s to star this year. “The infrastructure companies to defer their listing and second-biggest palm oil producer,” sector will continue to be boosted investors are more cautious and he says. “With the greater degree by the government’s focus on waiting for the right opportunity to of predictability in 2017, property overhauling Indonesia’s creaking invest.” development companies going for road, port, airport, power and That said, analysts expect to listing will also be quite promising.” other key infrastructure sectors. see a turnaround this year, with Gan agrees. “Given pent-up IPO Meanwhile, the commodities sector planned listings including those demand and still uncertain outlook will be supported by the rebound of property developer Eco World beyond 2017, corporations may in coal prices,” she says. “As for the International Bhd and fast-food view 2017 a window of opportunity property sector, which has been restaurateur QSR Brands. “[The to list, particularly for small caps,” in the doldrums for at least the year] 2017 will see a different light he says. “We may see delayed IPO last two years, things are likely to for many companies which have proposals in the property, oil and pick up on the back of anticipated differed listing previously, and it gas, and retail sectors launched in inflows under the tax amnesty is highly likely that they will revive 2017. The recent announcements of program.” their listing plans since all the chain listing proposals by market uncertainties have to a great extent heavyweights [such as] Sime Darby been eliminated,” says Ong. “This and UMW suggest demergers may will definitely give a boost to the be a new IPO theme.” confidence of the investors and improve the market condition.” Key developments in the space include the new framework for

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 15 COVER STORY

This year’s edition of ALB’s annual Firms To Watch list showcases a diverse mix of law firms, including an Indonesian firm specialising in aviation work, a Malaysian firm shining in matrimonial law, and a Japanese law firm offering a counter to the traditional law firm models. The firms are listed in alphabetical order.

BY RANAJIT DAM

2 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM COVER STORY Credit for this wider perspective goes to new recruit Ade Bungsu Setiarini, Masan Group, Vietnam’s largest A&CO who joined from Soemadipradja & private consumer product group, on its FOUNDED: 2013 Taher early last year. Suratman adds business and product entry strategy in OFFICE LOCATION: JAKARTA, INDONESIA that two areas that A&CO is targeting Thailand and joint venture with a large PARTNERS: 3 today are IT and telecom. “We feel that Thai beverage group; representing a nowadays, the information technology Japanese multinational as claimant in and telecommunications sectors are an International Chamber of Commerce In the four years since growing rapidly and play an important (ICC) arbitration proceeding seated its founding, A&CO role in the world. We will strive to have in Thailand; and advising the a large has grown from a expertise in these fields,” he adds. investment fund on its Thailand entry two-lawyer outfit to strategy and the regulatory aspect nine fee-earners, and relating to power and renewable energy expanded its focus projects. from intellectual property to corporate/ APISITH & ALLIANCE Apisith & Alliance’s trade and commercial work, as well as litigation. IP FOUNDED: 2002 customs practice has also been busy, still remains a key area of its focus – in OFFICE LOCATION: BANGKOK, THAILAND with the firm representing foreign and the past two years, the firm helped file PARTNERS: 5 domestic clients on 15 trade remedy about a hundred trademark applications investigations, mostly antidumping from multinational companies. However, cases against steel imports. Apisith in the past year, the firm also acted in a Apisith & Alliance, John Sutham, the firm’s managing high-profile bankruptcy case involving the only Thai firm on partner, attributes its success to more than $2 million, and acted in six this list, is growing the “consistent high quality of our civil lawsuits before various courts in fast. In the past advice, our practicality, our super-fast Indonesia. The change in approach is year, it added five responsiveness,” among other. These obviously helping – A&CO has registered fee-earners, or a have resulted in not just clients giving a 50 percent increase in revenue each headcount increase of a quarter, while their trust and confidence to Apisith & year since it was established. “The it has consistently seen double-digit Alliance, but also other firms referring change from being an IP-based firm revenue growth year-on-year since work. The firm continues to receive to one offering wider legal services has 2013. In 2016, the firm had a number instructions from the two largest been one of the main drivers behind our of work highlights, including advising Japanese law firms, notwithstanding growth,” says Ardhiyasa Suratman, on two initial public offerings (IPOs) the presence of their offices in A&CO’s managing partner. on Thailand’s SET and MAI; advising Bangkok.

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 17 COVER STORY AQUINAS COLLAS DWIPO LUBIS BASKORO LAW ALLIANCE CRILL & PARTNERS FOUNDED: 2016 YEAR ESTABLISHED IN ASIA: 2011 FOUNDED: 2007 OFFICE LOCATION: SINGAPORE ASIA OFFICE LOCATION: SINGAPORE OFFICE LOCATION: JAKARTA, INDONESIA PARTNERS: 6 PARTNERS IN ASIA: 2 PARTNERS: 3

Aquinas Law Alliance The year 2017 got off High-flying might be among the to a strong start for Indonesian law firm youngest law firms Collas Crill, the only DLBP has seen a on this list, but it’s offshore law firm on significant amount of led by an old hand in this list, as it finalised its growth in the past the form of Aloysius its merger with BVI 12 months coming Wee. Aquinas was born out of the ashes law firm Farara Kerins, thus expanding from its aviation practice. “Our aviation of the legacy Dacheng Wong Alliance, its presence beyond its existing offices practice was traditionally focused on Singapore’s only China-Singapore joint in the Cayman Islands and Channel the financing, sale and lease-back etc. venture law firm, where Wee was the Islands. This followed a merger with of commercial aircraft,” says Haryo managing principal. When that ceased Cayman firm CARD in 2015. Baskoro, the firm’s managing partner. operations, Aquinas was set up to The Singapore office, which hired “Now, we have started to enter into “continue the work.” Stephen Adams as its new managing the field of private jets and other The firm’s principal office is in partner in the second half of 2016, related aviation businesses, such as Singapore, but Aquinas boasts a has done notable work in the past aircraft repossession, licensing of type reach across Southeast Asia through year, including advising an Australian certificates and supplementary type its membership in the ASEAN Legal law firm and an Australian credit certificates and so on.” As such, key Alliance. That organisation, of which fund manager on the Cayman Islands work in the past year has included Wee is president, has members in all aspects of a fund investing in U.S. credit advising Japan’s Igrek Shicata on the ASEAN countries barring Myanmar, instruments; advising Hong Kong-based purchase and financing of an Airbus but that gap is set to be filled this year IP Investment Management, which A320-216; and advising Northern as Aquinas adds an associated office in has invested $1.5 billion in real estate Light Holdings on the purchase and that country. globally, on the establishment of funds financing of an Embraer Legacy 650. The firm also has an in-house India investing in UK residential development As revenue jumped up to 30 percent for practice, comprising two Indian lawyers projects; and advising Green & Smart the year, the firm hired former senior along with a network of Indian firms Holdings on the Jersey law aspects in-house counsel Retno Dini Hastuti to support the India work. And as the of its admission to the London Stock from the Jakarta branch of Bank of former JLV partner of Dacheng, it has a Exchange’s AIM Market. Tokyo Mitsubishi UFJ as of counsel, and network in China as well. Collas Crill has plans to grow in Asia plans to open a new office in Jakarta in terms of growth, the firm plans as well by launching a Hong Kong office. exclusively for its aviation, corporate, to add three more lawyers this year. It is “This will support the continued growth and banking teams. also looking to gain recognition for our of our corporate, commercial and funds As a boutique outfit, the firm’s legal expertise while building on the offering and it will also be a key driver for growth strategy hinges on its client foundation of long-time clients: “We our fiduciary and private client practice focus. “We treat our clients as business are focusing on the growth of ASEAN area, as Asia is widely recognised in the partners and families rather than ‘just’ as the engine of growth as well as industry as the region most favoured for clients,” says Baskoro. “We always try to consolidating on the growth engines of client growth opportunities in this area,” give them insight on possible business China and India.” says Adams. “We are well aware of the opportunities and general market In the next year, it wants to increase opportunities in Asia and the greater conditions. In light of this, we require its capability in the corporate compliance demands on advisers who can provide all lawyers in our firm to understand the area for both private limited and listed multi-jurisdictional services across the industries in which our clients operate, companies. “We are looking towards different areas. Having a foothold in their business models, and players in acquiring a corporate secretarial firm Hong Kong will enhance our practice the industries. These include regulators, or team towards developing this area,” in multiple areas and allow us more companies in same businesses or says the firm. flexibility within this region.” potential customers of our clients.”

18 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM COVER STORY

and tax matters. Some of these says the firm. “We have also seen more GATMAYTAN YAP include advising on the proposed and more referrals from our network redevelopment of Manila’s Ninoy partners in the Rajah & Tann Asia legal PATACSIL GUTIERREZ Aquino International Airport; advising network as well as from other slaw firms on the tender for the development, and companies based overseas. & PROTACIO financing, construction, operation and Partners Jim Gatmaytan (who FOUNDED: 2007 maintenance of an elevated rail transit also acts as managing partner of the OFFICE LOCATION: MANILA, PHILIPPINES system south of Metropolitan Manila; firm) and Norma Patacsil spearhead PARTNERS: 6 representing a client in a multi-billion C&G Law’s corporate and commercial peso arbitration proceeding involving a practice, while Ben Yap and Paolo major mining project in the Philippines; Protacio lead the disputes offering, Established a decade and representing a client in a Singapore and Mark Gutierrez heads tax. The firm ago, C&G Law is International Arbitration Centre (SIAC) is also seeing a bump coming from marking its tenth case against a Philippine counterparty President Rodrigo Duterte’s policies. year in business by involving disputes arising out of their “With the change in administration in joining the Rajah & commercial agreements. the Philippines, there has been growing Tann Asia network, C&G Law says that that it continues interest from companies in China to which should give the firm access to to get a steady stream of work from its investing in the Philippines,” says the legal resources across the region. key clients across different practice firm. “The Philippines also continues to That will mark a natural progression areas. “Happy with the work that we see robust growth, posting the fastest for the swiftly growing firm, which has have delivered in one or more practice growth rate in Asia in the third quarter of expanded five-fold since its founding areas, key clients have been engaging 2016 [6.7 percent] and looking to expand and involved in key deals, disputes us for work in other practice areas,” more than 6 percent until 2018.”

Firm Overview:

Gatmaytan Yap Patacsil Gutierrez & Protacio (C&G Law) is a full- service Philippine law firm of over 35 lawyers specializing in corporate and commercial transactions, litigation and arbitration, taxation as well as labor and employment. C&G Law was established in 2007 by Alfredo Benjamin S. Caguioa, Jaime Renato B. Gatmaytan, Ben Dominic R. Yap, Norma Margarita B. Patacsil, Anthony Mark A. Gutierrez, and Jesus Paolo U. Protacio. Cesar E. Santamaria, Jr., Mary Thel T. Mundin, and Jess Raymund Lopez have since been admitted as partners of the firm.

Tel: +632 894 0377 to 79 / +632 894 4931 to 32 C&G Law was formerly known as Caguioa & Gatmaytan. The change of name was brought about by Mr. Caguioa’s withdrawal Fax: +632 552 1978 Email: [email protected] Website: www.cagatlaw.com from the firm in January 2013 following his appointment as Chief Presidential Legal Counsel and subsequently as Secretary of the Recent Citations: Department of Justice by Philippine President Benigno C. Aquino III. In January 2016, Mr. Caguioa was appointed as a Justice of the Philippine Supreme Court. ¥ Asian Legal Business - Winner (2016): “Construction and Real

Estate Law Firm of the Year” in the Philippine Law Awards C&G Law is a member firm of the Rajah & Tann Asia legal network.

¥ Asian Legal Business - Finalist (2016): “Project Finance Deal of Principal Contacts: Jaime Renato B. Gatmaytan the Year”, “Arbitration Law Firm of the Year”, “Tax and Trusts Law [email protected] Firm of the Year”, “Philippine Deal Firm of the Year” and Managing Partner “Philippine Law Firm of the Year” in the Philippine Law Awards

Ben Dominic R. Yap ¥ Chambers & Partners - Finalist (2016): “Philippines’ Law Firm of [email protected] the Year” in the Chambers Asia-Pacific Awards Partner

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 19

COVER STORY GUIDO HIDAYANTO GULAPA HM CHAN & CO AND PARTNERS LAW OFFICE IN ASSOCIATION WITH TAYLOR WESSING FOUNDED: 2016 FOUNDED: 2015 FOUNDED: 2015 OFFICE LOCATION: JAKARTA, INDONESIA OFFICE LOCATION: MANILA, PHILIPPINES OFFICE LOCATION: HONG KONG PARTNERS: 3 PARTNERS: 1 PARTNERS: 1

GHP started with Named Boutique Established in May two partners, Bonie Law Firm of the Year 2015, HM Chan & Guido and Bintang at the ALB Philippine Co formalised its Hidayanto (currently Law Awards 2016, association with the firm’s managing G-Law was set up in Taylor Wessing in partner less than a September 2015 by July last year, and year ago, but now it has 10 fee-earners Aris L. Gulapa, who had helped build 2016 was a very busy for the firm. It – a testament to just how busy the the PPP practice at C&G Law (which also advised IBI Group Holdings, a building firm has been. Among other things, it made the Firms To Watch list this year). contractor focusing on providing has advised HyOil on the acquisition of G-Law specialises in real estate and renovation services in Hong Kong and Medco’s Bawean Production Sharing construction, particularly infrastructure, Macau, on its listing on the Main Board Contract as well as on the acquisition of representing private bidders and the of the Hong Kong Stock Exchange; a ENI’s Krueng Mane Production Sharing government in flagship infrastructure pear juice manufacturing company Contract; advised Gobi Ventures in the projects. In the past year, it has with its facilities based in Shandong, $2 million financing of Travelio, an represented parties in the $2.4 billion China, on its more than $220 million Indonesian online accommodation and Regional Airports PPP project, and is pre-IPO investment; and a consortium booking site; advised Indonesian-based currently advising the Ayala Group and led by martial arts superstar Jet Li on a IT company PT Aplikanusa Lintasarta its consortium on their pre-qualification proposed HK$1.5 billion subscription of in a major business partnership for the bidding of the $3.8 billion North- shares and takeover of Hong Kong-listed agreement with IBM; and advised South Rail PPP project, the biggest PPP Far East Holdings International Ltd. Goers, an Indonesian-based lifestyle project in the Philippines to date. Since its founding, the firm and event booking app, in the funding While the infrastructure remains the doubled its headcount, going from four round led by Mahaka group. Other key firm’s bread-and-butter work, it is also fee earners in May 2015 to nine as of clients include Exxon Mobil, Lukoil, looking to build up other practice areas December 2016. That said, HM Chan Total Oil, UMW Oil and Gas, KS Drilling, such as IP. The Philippines, however, is believes its small size is an advantage. Japan Drilling Company and the Angel not the end of the firm’s ambitions. This “Clients are increasingly more cost Investor Network Indonesia. GHP is keen year, the firm plans to launch an office conscious, and more tech-savvy than to expand regionally. in New York City with two partners that ever,” says Mark Chan, the firm’s But despite these marquee-name will cater to U.S.-based Filipinos who managing partner. “We focus on adding clients, GHP sees much of its growth need counsel for their Philippine-related value to our clients and pride ourselves coming from smaller players. “With the matters as well as U.S. companies on being able to provide quality growth in SMEs in Indonesia, we are intending to invest in the Philippines or legal service that is better than our able to position ourselves as the go-to the ASEAN region. competitors in larger law firms. There legal services provider that can provide Gulapa says that being a boutique will always be senior representation on quality work on-par with big law firms, firm has its advantages. “The trend is for every client matter and clients can be however at a significantly affordable clients, both big and small, to approach assured that we are contactable at all rate,” says the firm. “This puts us in small, boutique firms because of the times on all forms of communication direct competition with big names over cost efficiency and attention that such from WhatsApp to WeChat. As a team, the thriving Indonesian SME market, firms provide,” he notes. “G-Law intends we are able to adapt to clients’ needs and allows us to provide the industry to remain a boutique firm but with and requests. Hence, by ensuring the with alternative option for law firms. We a big firm mentality — that is, we eye above, we have been able to charge do not shy away from competing against highly complex transactions but remain rates similar to Magic Circle and white- big law firms, as we believe that our attentive to client’s needs without shoe law firms and avoid getting sucked add-value proposition is equally strong, ripping [them] off with whopping legal into a price war with other firms or if not stronger in certain areas.” fees.” having to resort to lowering our fees.”

20 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM COVER STORY

For Muntaz, a good lawyer IMRAN MUNTAZ & CO. understands the laws and regulations, PUTRI NORLISA CHAIR FOUNDED: 2012 a great lawyer comprehends the laws FOUNDED: 2015 OFFICE LOCATION: JAKARTA, INDONESIA and has great communication skills, but OFFICE LOCATION: KUALA LUMPUR, MALAYSIA PARTNERS: 2 an excellent lawyer embraces them all PARTNERS: 3 and, along with enormous commercial knowledge, combines them all into The two-partner one package that can be flexible and PNC Law was IMCO, led by name adapt to client needs. “I believe those set up by three partner Imran aspects [helped] the firm to stand out, ex-Kadir Andri & Muntaz, counts despite [being relatively new],” he says. Partners lawyers: among its clients a “Personally, I have three substantial Putri Norlisa Najib, host of Indonesian [traits that stand] as the firm’s principles: Constance Low, companies, including BW Plantation, commitment, consistency and integrity.” and Adrian Chair, who serves as Media Nusantara Citra, Multi Bahagia, Notable work from the past year has managing partner. The firm focuses on Goku Resources and others. Accroding included representing PT BW Plantation a number of practice areas, including to Muntaz, clients “have been and Tbk (now PT Eagle High Plantation Tbk) banking and finance, corporate- always will be” the main driver for the on the limited public offering phase I to commercial, M&A and projects, energy firm. “Satisfaction from our clients has shareholders in relation to the issuance and infrastructure, capital markets, been motivating us to work harder and of pre-emptive rights in the amount of telecommunications and technology, keep pushing ourselves to the limit to 10.8 trillion rupiah, and representing PT advisory and compliance, and corporate provide the excellent products and Media Nusantara Citra Tbk in obtaining real estate. Notable work in the past year services from the firm,” he says. a loan to the amount of $250 million. has included advising on a franchise

Imran Muntaz Co.

A T T O R N E Y S A T L A W Capital Markets & Securities Energy & Natural Resources

Corporate Commercial / Merger & Acquisitions Real Estate

Banking & Finance IT & Telecommunications

Commercial Dispute Transportation, Shipping & Logistics

Office 8 Building, 35th Floor Zone G, Sudirman Central Business District Lot. 28 Jl. Jend. Sudirman Kav. 52-53, Jakarta 12190, Indonesia Tel + 62 21 29333800 Fax + 62 21 29333801 www.imcolaw.com

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 21 COVER STORY arrangement between FamilyMart and pharmaceutical sector; and a Korean expand into other practice areas at the Maxincome Resources; sale of Bose’s company in a JV dispute. The office is an moment. Rather, we want to expand our manufacturing operations in Malaysia affiliate of Swiss law firm Schellenberg client base for our core practices, such as to Flextronics; Maxis’ acquisition by of Wittmer, which was founded in 2000 corporate and commercial transactional Advanced Wireless Technologies; and and currently has 140 attorneys in work and general litigation by offering others. In 2017, the firm is gearing up Zurich and Geneva. clients a different approach to the for more M&A-related work as well as According to Boog, the Singapore delivery of services and alternative continuing its active role in projects. office was opened as a response to the billing methods.” The firm says it follows three firm’s clients’ business, a large amount of Aside from the steady stream of fundamental tenets that set it apart which had shifted to Asia. “Our strategy notable deals in the past year, SEUM from its competitors in Malaysia. These for growth here is to focus on and draw is one of the first firms in the Korean are business and commercial acumen, from our USP, which is high-quality civil market to offer an “insourcing” service, depth and execution capability as well law dispute resolution advice in the Asia- where it sends attorneys to work on as an “exceptional” value proposition. Pacific region,” he notes. Boog has led client matters on-site for fixed rates. To “PNC Law is about the vision of its the firm’s Asia disputes practice since strengthen its reputation in the startup partners in founding and establishing 2014, becoming managing director of space, it has also into key partnerships a legal practice driven with a clear the Singapore office in 2016. He is also with “third parties that have synergy.” commitment and vision to be the ‘first a vice-chair of the firm’s international These include partnering with co- name for the client’. [We are] armed with arbitration practice and spearheaded working space WeWork to provide office the entrepreneurial drive and enterprise its international arbitration work in the hours and discounted legal services to to empower our clients with the winning region. The other lawyer in the office its members, and with startup database strategy where we will be pushing the is Julie Raneda, a counsel based in website RocketPunch to provide envelope, thinking in advance and Singapore since 2016. content, as well as free consultations. firmly focused on the task ahead so as to help clients reach their goals and strategic and commercial objectives. SEUM LAW SHANG & CO. We recognise that in doing so, this will FOUNDED: 2012 FOUNDED: 2011 also be what is best for PNC Law,” the OFFICE LOCATION: SEOUL, SOUTH KOREA OFFICE LOCATION: KUALA LUMPUR, MALAYSIA firm explains. PARTNERS: 7 PARTNERS: 3

SCHELLENBERG Technology-focused Malaysia’s Shang SEUM, led by & Co. completed WITTMER managing partner its fifth year of YEAR ESTABLISHED IN ASIA: 2014 Hoseok Jung was operations in 2016, ASIA OFFICE LOCATION: SINGAPORE originally founded and it proved to be PARTNERS IN ASIA: 1 to cater to South a good year for the Korea’s rapidly growing startup and firm. Apart from adding a partner, Shang venture capital ecosystem, but has saw a 210 percent increase in revenue – Headed by expanded its focus since then to include an impressive feat given the economic Christopher Boog, criminal defense and inbound cross- downturn. According to the firm, its key the two-fee-earner border work. However, despite these member has been managing partner Singapore office new additions, it still comes across as Chris Chin. “Chris has been leading the of Schellenberg a law firm that is very clear about its firm to achieve big results despite being Wittmer aims to take strengths, and how it wants to grow. relatively small in terms of number of advantage of the city-state’s quickly “Initially, our strategy was to capture a lawyers,” it says. “Under his leadership, evolving dispute resolution scene. very niche market with a practice that the firm has been recognized widely Recent work done by the firm includes previously did not exist in Korea – a especially in matrimonial and family acting for an Indonesian client in an boutique firm specialising in emerging law.” arbitration in the commodities sector; companies and venture capital. Our Key work in the past year included a Hong Kong client in an arbitration in strategy was to grow together with advising local construction company the commodities sector; a Singaporean our clients,” says the firm. “Although on an acquisition worth more than 20 client in a dispute in the mining sector; innovation continues to be a core part million ringgit ($4.5 million); advising a Japanese company in a dispute in the of our strategy, we are not looking to shareholders on distribution of assets

22 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM COVER STORY for a local bricks manufacturer company including partners Eric Marcks and advantage.”First, international firms in worth 12 million ringgit; and a cross- Mangyo Kinoshita, southgate aims to Tokyo continue to increase their billing border parental abduction case that offer clients an alternative to traditional rates across the board to catch up with involved China, Taiwan, Australia and law firm models. It describes itself as “a New York and London rates,” they say. Malaysia.In the next year, the firm boutique law firm devoted to small-cap “These rate hikes make it increasingly plans to expand its presence throughout and mid-cap cross-border M&A and difficult for international firms to handle Malaysia and into Southeast Asia. corporate matters founded by Japanese the cross-border small-cap and mid-cap and U.S. lawyers who have spent their M&A transactions that we are focusing entire careers at international firms.” on.” SOUTHGATE This allows the firm to play in a Secondly, a growing number of FOUNDED: 2016 niche segment of the Tokyo M&A market. Japanese companies are relying on OFFICE LOCATION: TOKYO, JAPAN “New initiatives in the Japanese legal venture capital investments in startups PARTNERS: 2 market are few and far between,” says as a pillar for growth, with a large portion Marcks and Kinoshita. “The Japanese of their venture capital budgets located legal market is conservative, stable in offshore jurisdictions. “We are one of and traditional, and for this reason, the only firms in Tokyo with experience market entry by small firms is viewed as and expertise in overseas VC. As a result, being extremely difficult. southgate has we have received many mandates to already begun challenging the old order represent Japanese investors in their by winning mandates against… firms offshore VC investments – nearly 50 to that are far larger and older than us.” date, which we believe is far more than Founded on the first day of 2016 by According to Marcks and Kinoshita, any other firm in Tokyo,” say Marcks and three former White & Case lawyers, two factors have played to the firm’s Kinoshita.

Guido Hidayanto Partners your trusted legal advisor www.lawghp.com

We listen to you, so we can GHP draws from in-depth understanding of local law precisely craft personalized and commercial practice to provide hands-on advice legal solutions that speaks the language of your business

Equity Tower, Level 49, Sudirman Central Business District Jl. Jend. Sudirman Kav.52-53 Jakarta 12190, Indonesia | +6221 2965 1258 | [email protected]

LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 23 OFFSHORE

One of the more overlooked developments – and opportunities – in global finance in the past two decades has been the quiet rise of Islamic finance. Based upon ethical precepts of Islam as interpreted by Muslim scholars, Islamic finance is steadily growing in appeal, thanks to some 1.6 billion Muslims around the world. In 2009, total global Islamic finance assets were worth around $900 billion, according to data from the International Shari’ah Research Academy for Islamic Finance. By 2015, that figure rose to more than $2.4 trillion. The global Islamic finance market is expected to exceed $3.4 trillion next year and grow to $5 trillion by 2020. As the global Islamic finance market grows To say that there is room for further growth in Islamic finance is an understatement. More than $11 at an impressive pace, offshore financial trillion in wealth is estimated to be held by Muslim centres (OFCs) are increasingly in demand individuals, governments and institutions, over 80 to help structure sharia-compliant products. percent of which have been invested in non-Islamic jurisdictions. Unsurprisingly, offshore law firms are seeing The formalisation of centuries-old sharia law, a need for Islamic finance-related services which governs the ways in which Muslims should grow as well. ethically engage in financial activities, began in earnest in the 1960s with the arrival of the Middle East oil boom. The development of Islamic finance has accelerated BY CHRISTOPHER HORTON in more recent years, with increasingly diverse and EXPERTISE EXPERTISE CONNECTED CONNECTED Bedell Trust is evolving Bedell Trust is evolving

We are building upon our strong Dedicated to enabling our clients heritage, reputation and capabilities. to get the most out of their wealth, We are focusingbuilding uponour expertise our strong and assetsDedicated and time,to enabling we remove our clients complexity cultureheritage, to reputationshape a dynamic and capabilities. new business. andto get uncertainty. the most out of their wealth, We are focusing our expertise and assets and time, we remove complexity cultureWe are a to corporate shape a dynamic and fiduciary new business. services andOne uncertainty.business, aligned behind a single provider, recognised for driving success purpose and a new name: Ocorian. forWe ourare clientsa corporate in corporate, and fiduciary fund, realservices One business, aligned behind a single Visit our website to find out more: estateprovider, and recognised private client for services.driving success purpose and a new name: Ocorian. for our clients in corporate, fund, real ocorian.com Visit our website to find out more: estate and private client services. ocorian.com

Ocorian Limited is regulated by the Jersey Financial Services Commission. Ocorian Fund Services (Jersey) Limited is regulated by the Jersey Financial Services Commission. Ocorian (Luxembourg) S.à r.l is authorised to conduct business by the Ministère des Classes moyennes. Ocorian (UK) Limited is authorised and regulated by the Financial Conduct Authority of the United Kingdom. Ocorian (Mauritius) Limited is regulated by the Financial Services Commission Mauritius. Singapore Trust Company Pte Ltd is regulated by the Monetary Authority of Singapore. Ocorian (Guernsey) Limited (registered Guernsey Ocorian45342) is Limited licensed is and regulated registered by the by Jerseythe Guernsey Financial Financial Services Services Commission. Commission Ocorian under Fund theServices Regulation (Jersey) of LimitedFiduciaries, is regulated Administration by the Jersey Business Financial and Company Services Directors,Commission. etc. Ocorian(Bailiwick (Luxembourg) of Guernsey) S.à Law r.l is2000. authorised Ocorian to (Ireland) conduct Limitedbusiness is by an the authorised Ministère trust des orClasses company moyennes. service Ocorianprovider (UK) in accordance Limited is with authorised Section and 89(6) regulated of the Criminal by the Financial Justice (Money Conduct Laundering Authority andof the Terrorist United Financing)Kingdom. Ocorian Act 2010 (Mauritius) of Ireland. Limited is regulated by the Financial Services Commission Mauritius. Singapore Trust Company Pte Ltd is regulated by the Monetary Authority of Singapore. Ocorian (Guernsey) Limited (registered Guernsey 45342) is licensed and registered by the Guernsey Financial Services Commission under the Regulation of Fiduciaries, Administration Business and Company Directors, etc. (Bailiwick of Guernsey) Law 2000. Ocorian (Ireland) Limited is an authorised trust or company service provider in accordance with Section 89(6) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 of Ireland.

24 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM EXPERTISE EXPERTISE CONNECTED CONNECTED Bedell Trust is evolving Bedell Trust is evolving

We are building upon our strong Dedicated to enabling our clients heritage, reputation and capabilities. to get the most out of their wealth, We are buildingfocusing uponour expertise our strong and assetsDedicated and time,to enabling we remove our clients complexity heritage,culture to reputationshape a dynamic and capabilities. new business. andto get uncertainty. the most out of their wealth, We are focusing our expertise and assets and time, we remove complexity cultureWe are a to corporate shape a dynamic and fiduciary new business. services andOne uncertainty.business, aligned behind a single provider, recognised for driving success purpose and a new name: Ocorian. forWe ourare clientsa corporate in corporate, and fiduciary fund, realservices One business, aligned behind a single Visit our website to find out more: estateprovider, and recognised private client for services.driving success purpose and a new name: Ocorian. for our clients in corporate, fund, real ocorian.com Visit our website to find out more: estate and private client services. ocorian.com

Ocorian Limited is regulated by the Jersey Financial Services Commission. Ocorian Fund Services (Jersey) Limited is regulated by the Jersey Financial Services Commission. Ocorian (Luxembourg) S.à r.l is authorised to conduct business by the Ministère des Classes moyennes. Ocorian (UK) Limited is authorised and regulated by the Financial Conduct Authority of the United Kingdom. Ocorian (Mauritius) Limited is regulated by the Financial Services Commission Mauritius. Singapore Trust Company Pte Ltd is regulated by the Monetary Authority of Singapore. Ocorian (Guernsey) Limited (registered Guernsey Ocorian45342) is Limited licensed is and regulated registered by the by Jerseythe Guernsey Financial Financial Services Services Commission. Commission Ocorian under Fund theServices Regulation (Jersey) of LimitedFiduciaries, is regulated Administration by the Jersey Business Financial and Company Services Directors,Commission. etc. Ocorian(Bailiwick (Luxembourg) of Guernsey) S.à Law r.l is2000. authorised Ocorian to (Ireland) conduct Limitedbusiness is by an the authorised Ministère trust des orClasses company moyennes. service Ocorianprovider (UK) in accordance Limited is with authorised Section and 89(6) regulated of the Criminal by the Financial Justice (Money Conduct Laundering Authority andof the Terrorist United Financing)Kingdom. Ocorian Act 2010 (Mauritius) of Ireland. Limited is regulated by the Financial Services Commission Mauritius. Singapore Trust Company Pte Ltd is regulated by the Monetary Authority of Singapore. Ocorian (Guernsey) Limited (registered Guernsey 45342) is licensed and registered by the Guernsey Financial Services Commission under the Regulation of Fiduciaries, Administration Business and Company Directors, etc. (Bailiwick of Guernsey) Law 2000. Ocorian (Ireland) Limited is an authorised trust or company service provider in accordance with Section 89(6) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 of Ireland. OFFSHORE sophisticated products and services becoming available “As the Islamic finance market grows and matures, in the market. conyersdill.com The often-complicated structuring of sharia- our jurisdictions are being used to facilitate the compliant finance vehicles has raised the appeal of structuring of Islamic finance products and offshore finance centres for Islamic financial institutions transactions such as sukuk, ijara, mudaraba and in recent years. As the offshore finance world has become more involved in Islamic finance, it has been musharaka [as well as] the establishment of sharia introduced to new terms, concepts and opportunities. compliant investment funds including real estate, Perhaps the most well-known among these infrastructure and equities funds.” vehicles is the sukuk, which is similar to a bond. Under sharia law, the Western-style interest-paying format is — Fawaz Elmalki, Conyers Dill & Pearman not allowed. Instead, the party which issues a sukuk sells a certificate to a pool of investors, and in turn uses the proceeds of the sale to buy an asset, which is partially owned by the investors. The sukuk issuer is also contractually bound to repurchase the certificate and legacy of success in launching sharia-compliant sometime in the future at par value. products that reflect the continuing future positive Similar to an instalment leasing agreement, an potential for Islamic finance in the OFCs.” ijara is a transaction involving the leasing of fixed Fawaz Elmalki, director of the Dubai office of assets that return to the lessor after the completion Conyers Dill & Pearman, says that Islamic financing’s of the lease period. The lease resembles an operating recent growth in offshore jurisdictions is driven by a lease, leading to only the partial amortisation of the broadening and increasingly sophisticated investor asset’s value. base in key markets, Trust financing contracts known as mudaraba – particularly in the Gulf often used as a means for funding Islamic banks – can Cooperation Council be used to connect investors with a fund manager or (GCC) states. In addition working partner, known as the mudarib. to this expanding investor Not long ago, these terms were seldom heard in base, the movement of offshore financial centres. But as OFCs have become Islamic finance into the LEGAL more adept at Islamic finance, opportunities for firms $55 BLN mainstream, including in important Western investor capable of providing for the specific needs of Islamic Estimated total markets such as the UK, is finance clients have grown. issuance of sukuk Hong Kong creating momentum for globally in 2016, OFFSHORE’S APPEAL Islamic finance in OFCs, he EXPERTISE according to S&P says. The appeal of offshore to Islamic financial institutions, Global Ratings. as well as individuals and governments, should come Anthony Oakes, a as no surprise. Top OFCs offer a world-class financial partner at Ogier’s Hong ecosystem, clear and strong regulatory regimes, Kong office, led the team protections for both businesses and investors as well that in 2015 worked on Garuda Indonesia’s $500 Top-tier Offshore Legal Expertise and Corporate Services around the Globe as compliance with global standards such as anti- million sukuk. According to Oakes, who also heads terrorism or anti-money-laundering measures. In the firm’s finance practice in Asia, the synergies of Conyers Dill & Pearman is an international law firm advising on the laws of Bermuda, the British Virgin Islands, addition, these jurisdictions provide their services in a OFCs and the special purpose vehicles that are often the Cayman Islands and Mauritius. Through our global network we provide responsive, sophisticated, solution-driven discreet manner, providing clients with anonymity. applied to Islamic finance are boosting demand for advice to clients on corporate, finance, litigation, restructuring and insolvency, and trust and private client matters. “The growth in the utilisation of OFCs as platforms offshore services within the world of Islamic finance. “In Conyers’ affiliate, the Codan group of companies, provides a range of trust, corporate secretarial, accounting for Islamic finance products over the past decade is no many Islamic financing transactions, including sukuk, and management services. coincidence,” says Jeffrey Kirk, managing partner of wakalah and ijara, a special purpose vehicle is used as Appleby’s BVI office. “Whilst the appeal of the OFCs the issuer of the debt securities,” Oakes says. “A special to the architects and underwriters of Islamic finance purpose vehicle set up in an OFC fits the purpose well – For more information, please contact: HONG KONG products has been battered by developments initiated given that the SPV can be set up quickly [and] at little CHRISTOPHER W.H. BICKLEY by the OECD and by global regulatory developments expense. And there are experienced service providers [email protected] over the past few years, the positive environment who can maintain the SPV and provide legal advice and +852 2842 9556 created by the OFCs to enhance Islamic finance remains opinions.” in play. It is this environment, strength of financial Islamic funds, or funds that only invest in industries service professionals resident in those jurisdictions that comply with sharia principles, are a popular form of

26 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM BERMUDA BRITISH VIRGIN ISLANDS CAYMAN ISLANDS DUBAI HONG KONG LONDON MAURITIUS SINGAPORE

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An investor monitors a screen displaying stock information at the Saudi Stock Exchange (Tadawul) in Riyadh, Saudi Arabia. REUTERS/Faisal Al Nasser

“Sukuk provides secure fixed income For listed sukuk issued by Middle East issuers, Elmalki says he continues to see the Caymans as the investments for sharia-compliant preferred jurisdiction for incorporation of the orphan investors and an opportunity for SPV issuer. “This owes in part to the flexibility, robust sharia-compliant and conventional corporate laws and judicial system of the Cayman Islands, including hundreds of years of English case corporations and banks to raise law,” he says. “It also reflects the fact that the Cayman finance. Sharia-compliant investment Islands has a significant track record in this field, and funds also remain popular as a many sukuk issuances are repeat issuances utilising a tried-and-tested structure that is familiar to investors, platform to diversify investments.” issuers, legal counsel and bookrunners alike.” — Tahir Jawed, Maples and Calder Conyers recently advised DP World on the establishment of a $3 billion sukuk program to be listed on NASDAQ Dubai and the London Stock Exchange, using a Cayman Islands issuer. On the banking side, Elmalki says Conyers regularly advises Bermuda, pooled investment, with funds often formed in OFCs for BVI, Caymans and Mauritius companies or parties to similar reasons as for establishing SPVs, Oakes adds. murabaha and ijara facilities in Middle East and North Islamic investors have already developed Africa (MENA) as well as African and Asian transactions, preferences for offshore activity, Elmalki notes, with in addition to London property acquisitions. many of the traditional OFCs proving popular. “Due to Ogier’s Oakes also notes the strong appeal of the their tax neutrality, political stability and modern legal Caymans for Islamic finance. systems, the Cayman Islands, Bermuda, the British Virgin “The special purpose vehicles used as issuer in Islands (BVI) and Mauritius offer flexibility, certainty and sukuk, wakalah and ijara structures tend to be Cayman- a track record that [are] particularly attractive to the exempted companies that are set up as ‘orphan’ SPVs,” Islamic investor base,” he says. he says. “The SPV is referred to as an ‘orphan’ because

28 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM

OFFSHORE ogier.com the beneficial interest in the shares of the SPV, rather capital markets and hence arranging Islamic than being held by a parent company, are held by a financings,” says Oakes. “For example, the Hong Kong trustee.” government issued sukuks in 2014 and 2015.” That trustee is either pursuant to a charitable trust While the cost of arranging an Islamic financing is of Cayman STAR Trust, Oakes says. A STAR Trust is a typically higher, by accessing a wider pool of funds, the trust created pursuant to Cayman statute. Moreover, borrower may be able to achieve a lower interest rate, the Caymans is one of the most popular jurisdictions in he says. Islamic financings also tend to attract more the world for establishing funds, so it is a natural choice publicity, he adds. for setting up Islamic funds, he added. One of the ways in which the Caymans has secured A GROWING RANGE OF PRODUCTS We get straight to the point, a leading role in offshore Islamic finance is by reaching As mentioned above, there are a number of different out to the industry, says sharia-compliant products and modes of financing managing complexity to get to the Tahir Jawed, managing within Islamic finance. There is little doubt that, at least partner of Maples and for the moment, sukuk is the core product in the Islamic Calder’s Dubai office. finance world. essentials. Every piece of work is a “The Cayman Islands “Sukuk provide secure fixed income investments has engaged with the for sharia-compliant investors and an opportunity Islamic finance world to for sharia-compliant and conventional corporations collaboration. We listen actively, asking pass legislation to clarify and banks to raise finance,” says Jawed of Maples the regulatory status of and Calder. “Sharia-compliant investment funds also the right questions, focused on what Islamic finance products, remain popular as a platform to diversify investments.” particularly sukuk, and In recent years, investment funds have also provides an efficient and provided important funding for small and medium really matters. We deliver targeted, economical platform for > $1 TLN business in the Islamic world. A more recent development has been the use of derivatives by sharia investment funds,” Jawed Estimated size of pragmatic advice with absolute clarity. compliant institutions and this has presented another says. global Islamic banking opportunity for the offshore centres as they have long assets as of 2016. DRIVING DEMAND provided a convenient domicile for hedging and netting The Islamic world is large arrangements, Jawed adds. To the point. and diverse, so it should There is, of course, more to Islamic finance than come as no surprise that the sources of demand for just sukuk. And there is plenty of work being done to Islamic finance in OFCs are also quite varied. Just as accommodate demand for all of these products and unsurprising is that a large amount of demand for such services. services comes from the Middle East, the region in the “As the Islamic finance market grows and matures, Islamic world where the largest amounts of wealth our jurisdictions are being used to facilitate the have been concentrated for the longest amount of structuring of Islamic finance products and transactions time. such as sukuk, ijara, mudaraba and musharaka [as well Legal services in “The traditional market of the Middle East remains as] the establishment of sharia-compliant investment British Virgin Islands strong,” says Oakes. “In Asia, Malaysia and Indonesia Cayman Islands have also been good markets.” Guernsey Hong Kong Oliver J. Simpson, an associate at Conyers’ Dubai Jersey office, notes that the Gulf Cooperation Council (GCC) Luxembourg states, particularly the United Arab Emirates and Qatar, “In many Islamic financing transactions, including Shanghai are key markets for offshore sukuk and other Islamic Tokyo SPV entities. sukuk, wakalah and ijara, a special purpose vehicle “This is a reflection in part of their emerging market is used as the issuer of the debt securities. A special status and the diverse investor base for these products,” purpose vehicle set up in an OFC fits the purpose Simpson says. Large Muslim populations are not a prerequisite well – given that the SPV can be set up quickly for Islamic financing, and its special characteristics are [and] at little expense. And there are experienced proving attractive to a growing number of markets with service providers who can maintain the SPV and relatively small Muslim communities. “In Asia, we have seen issuers in non-Islamic provide legal advice and opinions.” countries show an interest in accessing the Islamic — Anthony Oakes, Ogier

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funds including real estate, infrastructure and equities funds,” says Elmalki of Conyers. Listed sukuk – typically issued by an SPV issuer incorporated in the Cayman Islands – remain a mainstay of the Islamic debt capital markets. This is particularly the case where lower oil prices have caused Middle East public companies to look to the capital markets for finance. It may also be because this is increasingly seen as a mainstream product and forms part of the diversified portfolio of many OFFSHORE institutional investors. As elsewhere in finance, things are constantly changing PRESENCE in Islamic finance, and in some cases, individual markets are the drivers of change. “Traditional products – like sukuks – remain popular,” says Ogier’s Oakes. “However, there are new variations of these products, such as, in the Iran market, Intelligent and insightful offshore Islamic securities known as ‘salam sukuk’. The salam contract legal advice and services. is basically a financing contract in sharia and these are being Offshore is our domain. used in corporate fundraisings.” Banks are also developing more sharia-compliant retail and corporate banking and trade finance products, he notes. applebyglobal.com ADAPTING TO MARKET NEEDS Sharia principles may be relatively new to OFCs, but there has been plenty of movement in recent years to accommodate these once-unfamiliar guidelines, with the Caymans leading the way. “In the Cayman Islands, corporate law is famously flexible and business-friendly, enabling companies such as sukuk SPV issuers and others to enshrine the adherence to Sharia principles and investment criteria directly into their constitutional documents,” says Simpson. Courts in the Cayman Islands, Bermuda, the BVI and Mauritius are familiar with handling cases where sharia plays a role, Simpson notes. “This is important, as the courts may be required to uphold a fatwa from a sharia board that a contract complies with sharia,” he says. “These jurisdictions have a legal system based on English common law and have final recourse to the English Privy Council.”

32 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM OFFSHORE

Additionally, Cayman and BVI companies can have framework to transfer assets, create security and an additional name in Arabic, which is also attractive uphold contracts,” he says. “Efficient regulation is also for Islamic parties. important and the Cayman Islands has led the way Oakes notes that the flexibility, efficiency and low by introducing legislation to facilitate certain types of cost of OFCs are helpful in structuring Islamic financing Islamic finance transactions.” transactions. The Cayman Islands has engaged with the Islamic “The legal systems of OFCs are typically based on finance world to pass legislation to clarify the regulatory English law – a trusted and familiar legal system,” he status of Islamic finance products, particularly sukuk, says. “Where the legal systems of OFCs diverge from and provides an efficient and economical platform for English law, the rationale is typically to facilitate and investments funds, adds Jawed. provide confidence around financial transactions.” For example, in OFCs, there is often no restriction on GOING FORWARD a company giving financial assistance for the purposes There is no doubt that Islamic finance will only play a of the acquisition of its own shares. This flexibility and bigger role in OFCs going forward. So in what direction the absence of taxation make the structuring of Islamic do those working in this field see things heading? financing transactions quicker and easier. “The Middle East continues to provide the largest Jawed also cites the appeal of the low cost and market for Islamic finance clients — as wealth and efficiency – and low tax rates – of OFCs as appealing investment activity grows in the region, we anticipate factors for sharia-compliant transactions. In addition, that it will prove an even more important market for the Islamic finance’s focus on assets gives OFCs another offshore finance centres,” says Jawed. “We anticipate advantage. a steady growth in Islamic finance transactions in the “Sharia compliant investments often involve the OFCs as the Islamic finance market continues to grow transfer of assets and the OFCs provide a secure legal and develop. In recent years, we have seen growth in

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LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 33 OFFSHORE

Investment funds, sukuk and France – we will see Islamic banking represent an structures and derivative increasingly important portion of the banking sector. transactions which utilise We note the UK was the first non-Muslim country to OFCs.” issue a sovereign Islamic sukuk and suspect this trend Simpson says he sees will continue.” the establishment of a While the Caymans is expected to maintain its growing number of project- prominent role as an offshore centre for Islamic finance, oriented entities in the Simpson says that Mauritius was moving up in this near term. “Islamic banks sector. “Islamic finance in Mauritius is on the upswing, are typically incorporated $5 TLN with many exciting developments in the Mauritian in their home jurisdictions Estimated size of the financial services sector,” he says. “Mauritius is well- – many are wholly or global Islamic finance known for its numerous double-taxation avoidance partly state-owned,” he market in 2020. agreements with African and Asian countries.” explains. “However, many In 2011, Century Banking Corporation (CBC) was the incorporate offshore first Islamic bank to start operations in this jurisdiction, entities for specific projects which has a significant Muslim population. In 2014, such as sukuk issuances. This trend is likely to continue Habib Bank launched its Islamic banking business as the flexibility, track record and dependability of through a window operation, alongside its existing leading offshore financial centres such as the Cayman banking business. Islands will remain attractive.” Taken together, these observations point to an Demographic trends in countries with non-majority increasingly sophisticated and varied engagement Muslim populations are likely to expand the footprint of between OFCs and Islamic finance. In many ways, this global demand for Sharia-compliant financial products appears likely to create a virtuous cycle, in which greater and transactions, observes Simpson. “We expect that, choice for individuals, companies, Islamic finance with significant Muslim minority populations in certain institutions and governments attracts more money European countries – particularly the United Kingdom from non-Islamic jurisdictions, thus providing greater

34 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM OFFSHORE

“Whilst the appeal of the OFCs... OFCs,” says Oakes. “For example, in 2016, Cayman passed legislation created a new class of Cayman entity has been battered by developments – a limited liability company. It will be interesting to see initiated by the OECD and by global whether LLCs are used in Islamic financing transactions regulatory developments over or as the vehicle for Islamic funds in the future.” This is certainly a possibility. Despite being based the past few years, the positive on ancient principles – some of which date back as far environment created by the OFCs to as the seventh century – Islamic finance is constantly enhance Islamic finance remains in evolving. A recent example of this is the new sharia- compliant gold standard by the Accounting and play.” — Jeffrey Kirk, Appleby Auditing Organization for Islamic Financial Institutions (AAOIFI). The new standard went into effect in December 2016, opening up gold investment beyond coins and bullion via an internationally recognised standard for application to gold savings plans, physically backed incentive to develop new sharia-compliant products gold ETFs, gold mining equities and more. and vehicles to appeal to a growing market. Should those who set guidelines and standards In addition to offshore finance centres changing for Islamic finance continue to take advantage of the to meet the needs of Islamic finance, there are also opportunities within further clarifications which allow questions about whether Islamic finance will potentially the rest of the global finance system, including OFCs, to change in response to OFCs. engage this massive market on a deeper level, it is safe “It will be interesting to see whether the Islamic to say that the golden age of offshore Islamic finance market moves with the developments in the law of the has only just begun.

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LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 35 INDONESIA

Indonesia’s massive infrastructure dreams today depend heavily on outside finance, and Japan is fast becoming a key provider through loans and FRIEND IN NEED investment. However, they face a challenging legal BY RAJ GUNASHEKAR and regulatory landscape

Indonesia is the largest country in investment in the Southeast Asian country port and the Masela gas field, among Southeast Asia in terms of geographical reached a whopping $4.5 billion in total, others. area and population, and it also has the double that of the same period last year. largest economy by far. However, the In terms of infrastructure projects, OBSTACLES GALORE country currently suffers from a chronic Japanese lenders are getting involved in a That said, Japanese investors, much infrastructure deficit. According to a number of Indonesian projects. One is the like other investors in Indonesia, face report from PricewaterhouseCoopers 80 MW Muara Laboh geothermal power a number of challenges. “In terms (PwC), annual infrastructure spending in project in South Solok in West Sumatra, of regulatory difficulties, other than Indonesia is expected to increase to some which recently received a $440 million the set of regulations for toll-road $165 billion per year in 2025. This is seven loan from the Japan Bank for International construction, the regulations for other times more than anticipated infrastructure Cooperation (JBIC) and three of the type of infrastructure are still under way,” spending in the Philippines in 2025, which country’s megabanks. Another project is says the firm Christian Teo & Partners. PwC estimates will amount to $27 billion. the $40 million co-financing for a coal “In addition, the implementation of the The scarcity of infrastructure, given mine in North Kalimantan Province– JBIC regulations is not always a clear-cut issue, the size of Indonesia and its population, provided $24 million of the capital, with given the multiple interpretations by the obviously creates a huge demand for the rest coming from Chiba Bank, Mie relevant authorities, and the lack of proper infrastructure construction, particularly Bank and North Pacific Bank. coordination of the relevant government in the areas out of Java Island, where Japanese Prime Minister Shinzo Abe’s agencies in this regard.” proper infrastructure have not yet been visit to Indonesia yielded several potential Another issue that continues to developed. Thus, the poor quality of the areas of cooperation. These include arise in the infrastructure sector is land existing infrastructure provides room for a railway project linking Jakarta and acquisition. Not all land in Indonesia upgrade and renovation. Surabaya; a loan of 73.9 billion yen ($646 has been registered, and this can create Enter Japan. Japanese investors are million) to help finance port development, difficulties during the acquisition process very keen on Indonesia, as evidenced irrigation facility construction and beach and heighten the risks facing investors. by their spending. Between January protection projects in West Java; and joint These differences can be bridged by and September of last year, Japanese development of the Patimban deep-sea having foreign counsel who are familiar

36 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM

and often this regulatory framework is updated on new developments. For INDONESIA not altogether clear – clients are looking foreign investors from countries where for their lawyers to be able to walk them unwritten rules and common practices do through the framework. Not just the letter not play a significant role, the situation in with both the legal system of the investor’s of the law, but [also] the policy behind it Indonesia may be difficult to understand home jurisdiction and the Indonesian [and] the history of how the regulations and assess,” says Kanya Satwika, an legal system. Such advantages can help have evolved so that clients can then make infrastructure partner with Assegaf to significantly expedite the work. an informed investment decision,” he says. Hamzah & Partners (AHP). These concerns clearly create Secondly, lawyers have the ability uncertainties and challenges for both to provide input and feedback to the SPECIFIC TO JAPAN lawyers and market players. However, Indonesian government on private Japanese investors have had a long history since Indonesia is still a beginner in sector concerns regarding a particular of investing in Indonesia, and are a very infrastructure industry, those difficulties framework, enabling the government to well-respected investor class within the somewhat create good opportunities for consider implementing changes to further Indonesian government institutions. lawyers to add value to the quality and attract investment. Capacity-building In addition to the general challenges, number of infrastructure regulations in activities are also a good opportunity for the obstacles for Japanese investors and place by giving inputs to the regulator lawyers to assist in moving an entire sector other foreign investors are investment based on clients’ experience on the forward. restrictions and licensing-related ground on how to make implementation Moreover, infrastructure projects in issues. The restrictions are in the form of regulations feasible and effective. Indonesia are subject to various ministries of foreign shareholding limitation and According to Luke Devine, a foreign and government institutions and, in most requirement to form a consortium with legal consultant at Hadiputranto, cases, unwritten policies and common local construction companies. There are Hadinoto & Partners, the infrastructure practices play a significant role in a project. also some technical restrictions in the hurdles presents huge opportunities on a “Thus, in addition to the written rules form of minimum capital requirement and number of fronts. and regulations, infrastructure lawyers minimum level of technology and risk to “Firstly, as the infrastructure sectors need to familiarise themselves with be entailed. in Indonesia are very heavily regulated – common practices and keep themselves Japanese investors typically ask for

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38 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM government guarantee, something which is not necessarily requested by investors INDONESIA from other countries. “This is in a way a hurdle for Japanese investors,” notes Christian Teo & Partners, “For foreign investors from only permitted to invest in infrastructure “since such request would in a way make projects in Indonesia through an them less interesting compared to the countries where unwritten Indonesian limited liability company. other investors, especially Chinese rules and common practices Such a company can either be investors, who have been very aggressive do not play a significant established directly by the foreign investor, in pitching for government’s infrastructure or it may acquire an existing Indonesian works in Indonesia.” role, the situation in company. It should be noted that foreign What has made Japanese investors Indonesia may be difficult to investment in most of infrastructure areas particularly successful has been their understand and assess.” is restricted by the Negative Investment ability to mobilise attractive debt List, a government list of business lines financing through Japanese government — Kanya Satwika, Assegaf Hamzah & Partners that are fully open, conditionally open funding institutions, such as JBIC. “This or fully closed to foreign investments. has made the Japanese investors very This means that they are not 100 percent price competitive when bidding for open to foreign investments, so getting an projects,” explains Devine. “However, Indonesian partner is necessary. with the advent of recent additional Asia, the Middle East, the Americas and There are occasional complaints from funding agencies and renewed interest in Europe, which are very keen to support Japanese companies planning to invest in Indonesia from multilateral and bilateral renewable developments and are offering existing projects through the acquisition agencies, this competitive edge has very competitive debt-funding terms. “So of special-purpose companies established started to erode.” the entire landscape has become a lot and operated by Indonesian partners. In the renewable energy sector, for more competitive,” adds Devine. “These complaints sometimes follow example, there is an endless source of With the exception of the upstream on from due diligence findings of flows multilaterals and bilateral agencies from oil and gas industry, foreign investors are of cash for informal payments to the

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LEGALBUSINESSONLINE.COM ASIAN LEGAL BUSINESS – FEBRUARY 2017 39 challenges… so we have been assisting INDONESIA clients to navigate their way through that framework.” Satwika of AHP says that her clients authorities in return for required licenses “It is a major challenge mostly seek advice on what they can and or permits. This is a significant issue for can’t invest in, in light of the Negative Japanese investors as they are required to for Japanese investors Investment List. strictly comply with Japan’s Anti-Bribery to find ways to become “They are also interested in the Act, as well as the FCPA, UK Bribery Act more competitive on safeguards for foreign investors and and other anti-corruption laws around the the rules governing dividend payments. world,” says Satwika. price and on other terms Specifically as regards infrastructure, Also, the enforceability of contracts and conditions, without clients are seeking advice on government and loan security and the required legal sacrificing profitability and incentives, land acquisition procedures and administrative procedures to proceed and general advice on loan security with a project are not always clear or the perception of quality.” and its enforcement, as most, if not all predictable in Indonesia. Therefore, it is — Heru Mardijarto, a partner with infrastructure projects are primarily difficult for Japanese investors to predict Makarim & Taira S financed by banks and financial the necessary time and costs that will be institutions,” she adds. required to complete a project. In addition, Japanese investors TO THE FUTURE often find it difficult to find suitable As Devine observes, “While there are local partners as the Indonesian parties Investors should also manage big plans, the challenge remains with may not be as concerned with legal and their expectations when it comes to the implementation. However, some sectors contractual compliance as they would be. work speed of ministries or government are moving along at a good speed such This, in turn, can cause Japanese investors agencies in Indonesia. This is related to as the power and toll roads sectors. And in maintaining good relations with their actual timeline required for establishing a after many years of slow activity, we are Indonesian JV partners. legal presence in the country, particularly starting to see projects being awarded Finally, competition on price has for licensing procedures, including work in seaports and the water sector. Sectors become much fiercer since the large-scale permits, and the tender process. such as airports still have a long way to entry of infrastructure players from China. Investors also need to be prepared go. But there are plenty of opportunities “Also, investors from China do not always that not everybody in Indonesia can for investors.” insist on as many changes to transaction speak fluent English. As such, certain Given the current condition of documentation, leader to faster closing documents that have to be filed with Indonesia’s infrastructure, the level of times,” says Heru Mardijarto, a partner the government or regulators must be demand in this area is expected to be with Makarim & Taira S. “Therefore it is a written in or translated into Indonesian. high in the next couple of years. It is major challenge for Japanese investors to Indonesian law requires all legal contracts also important to take into account how find ways to become more competitive on involving Indonesian parties be written in urbanisation will impact Indonesia, as price and on other terms and conditions, local language, Bahasa Indonesia. Dual- there will be more urban areas in the without sacrificing profitability and the language contracts are permissible, country in the next 10 to 15 years. perception of quality from which Japanese provided that one of the languages used The government will continue to infrastructure players derive their main in the contract is Indonesian. execute projects that are currently in the competitive advantage.” pipeline, but revisions to planned targets ADVISING CLIENTS may also occur. Case in point: the 35,000 INVESTING PRECAUTIONS President Joko Widodo’s administration MW generating capacity development Prior to taking any step, investors in is constantly looking at ways to make project, which turned out to be overly Indonesia should get all the general the infrastructure sectors attractive for ambitious and has since been reduced to information available on investment from private sector investment. This has led 19,000 MW. the country’s Investment Coordinating to a constant stream of new regulations Satwika says given that the next Board and data on its infrastructure or changes to the existing regulatory general election is set to take place in program from the Public Works Ministry. framework. 2019, it is difficult to predict Indonesia’s Investors should be clear what type of As a result, a number of legal infrastructure outlook beyond that date. activities they are plan to do in Indonesia. challenges against regulatory changes “Nevertheless, given the grossly This will help them identify the relevant are being made through the Indonesian inadequate state of Indonesia’s regulations and restrictions to be applied. courts including the Constitutional Court. infrastructure at the present time, it is In addition, this will be useful in in “Accordingly,” says Devine, “a big part safe to assume that there will be a need preparing the required minimum capital of our practice is advising clients on these for large-scale infrastructure investment and choosing a local partner as early as regulatory changes, and occasionally, for at last the next one or two decades to possible. legal vacuums left by successful court come,” she concludes.

40 ASIAN LEGAL BUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM SPONSORED ARTICLE

INDONESIA – NEW TRADEMARK LAW A blend of harmonization and national heritage protection

Indonesian Intellectual Property Office, There is new provision for generic mark, which is Directorate General of Intellectual Property regulated in article 22. This provision stipulates Rights Office is a government institution under that “Against a registered mark which then the Ministry of Law and Human Rights of becomes generic, anyone can file an application for Republic Indonesia. Trademark law of Indonesia trademark containing such generic name by adding was initially introduced by the Dutch in 1885, other word element as long as there is a distinctive the law was then replaced on 11 October 1961 element”. It is however, no further explanation or with Law No. 21/1961 concerning with company criteria to define how or what elements that make mark and trade mark. It was then replaced on 28 a mark qualified for generic category and who August 1992 with Trademark Law No. 19/1992, determines the generic category of a registered changed in 1997 and then replaced on 1 August mark. Implementation of this provision would be 2001 with Trademark Law No. 15/2001. interesting subject for observation.

After 15 years, Indonesia now has new trademark Another new provision concerns with deletion of law no. 20/2016 to replace the old trademark law a registration if certificate of mark is not collected No. 15/2001. The new trademark law came into by the applicant within 18 months as from the force on 25 November 2016. The new trademark date of issuance. Law is now called “Trademark and Geographical Indication Law”. The purpose of this naming is to A trademark can be deleted at the initiative of emphasize the significant value of protection of the Minister if the mark is identical or similar geographical Indication. In the era of global trade, to geographical indication, traditional cultural in harmony with international conventions and YENNY HALIM expression and national heritage and contravenes treaties which have been ratified by Indonesia, Attorney At Law – IP Consultant the state ideology, law, morality, religion, ethics the role of Mark and Geographical Indication Managing Partner and public order. Deletion can also be requested becomes more important specifically to keep [email protected] by third party who can prove that the mark is not healthy and fair business competition, to provide used for 3 consecutive years as from registration consumer protection and business protection or last use. Cancellation can be filed by a third for micro, small and medium enterprises and party against a mark which does not meet criteria national industry. 3D mark, sound mark and holograms. Currently, for registration within 5 years as from registration Minister Regulation regarding the requirements date, except when the basis of lawsuit is bad faith. The New Trademark Law adopts development and procedure to implement this regulation is of information technology and communication. still being prepared and expected to be issued in In expectation to create deterrent effect, criminal Some regulations are updated and added to the next 2 years. penalty against infringement is increased to a accommodate national and global development, maximum of 5 year imprisonment and/or Rp. to provide better services and legal certainty International Registration under Madrid Protocol 2 billions fine; but if infringement gives impact for industry, trade and investment in facing is regulated in the new trademark law. This will to health, environment and/or life, the sanction development of local, national, regional and benefit local businesses to go International is significantly raised to a maximum of 10 year international economy and technology. E-filing with their brands at lower costs and faster time. imprisonment and/or Rp. 5 billions fine. In this is introduced in this new trademark law and International registration can only be applied new law, infringement of trademark does not its implementation by Indonesian Intellectual by: 1) Indonesian citizen, 2) Indonesian resident, have to be in deliberate/willful. Adopting ‘Legal Property Office was effective on 29 December 3) Indonesian business entities. Applicant of fiction’ principle that assumes everybody knows 2016. International Registration must first file its mark the law, one is obligated to make sure that he is in Indonesia. Currently, Minister Regulation not infringing other party’s intellectual property In general, Trademark Law No. 20/2016 regarding the requirements and procedure to right prior to using a mark. recognizes protection for trade and service implement this regulation is still being prepared marks, adopts first to file principle, priority and expected to be issued in the next 2 years. Transitional provision of this new trademark law right, pre-substantive publication for 2 months, regulates that all applications/trademark case opposition procedure, substantive examination, A mark cannot be registered if it does not filed before 25 November 2016 will be processed appeal against rejection and 6 month grace pass absolute and relative grounds of refusal. according to the old trademark law no. 15/2001. period for renewal. Lawsuits pertaining to trade Rejection based on wellknown mark for dissimilar mark dispute, infringement and cancellation are goods/services will be regulated by Minister filed with the Commercial Court and appealed to Regulation. This Minister Regulation has long the Supreme Court. License Agreement must be been awaited and will be issued soon. So far, ACEMARK Intellectual Property recorded with the trademark Office. court rulings vary when it comes to recognizing Jl. Cikini Raya 58 GH, Jakarta 10330, Indonesia rights of wellknown marks enforced against T: (62) 21 3140017 In addition to marks in 2D, New Trademark Law identical and/or similar mark for different kinds F: (62) 21 3140170 gives protection to non-traditional mark, namely of goods/services. W: www.acemark-ip.com

LEGALBUSINESSONLINE.COM ASIANASIAN LEGAL BUSINESSBUSINESS – FEBRUARY 2017 41 One way to preempt problems might be to use CONSTRUCTION the services of Before Claims Consultants (BCCs), professionals who look to address and avoid conflicts before they even surface. Philip Rompotis, a partner and head of construction and international arbitration at Stephenson Harwood, agrees that conflicts remain a widespread concern. “Some issues in construction projects, such as poorly CONSTRUCTION drafted documentation and poorly drafted claims, remain an issue,” he notes. Although the use of standard contracts in recent years has transformed the industry, the approach has not been totally effective. Rompotis noted that AND CONFLICT complacency is an issue in Asia, where employers use and re-use standard contracts without committing the resources required to ensure that a contract is As construction booms in the Asian specifically tailored to the current project to minimise region, so do construction-related errors and ambiguities. disputes. ALB speaks to experts BETTER THAN CURE about how these can be avoided or That said, parties are unsurprisingly keen to sidestep mitigated, at the very least conflicts emanating from construction projects, and so looking at different ways to address issues as early as possible. “There’s definitely an increasing trend of BY HAKY MOON In Asia’s fast-developing countries, construction contractors bring proactive in avoiding conflict,” says projects are carried out at an astonishing speed, with Jon Prudhoe, a managing director within the global buildings appearing seemingly overnight. At the same construction practice at Navigant, an expert services time, however, construction disputes are becoming firm. prevalent almost as quickly. Prudhoe has noticed contractors seeking advice One important reason behind this occurrence is that on contractual issues much earlier in the lifetime construction projects are often hastily conceptualised of a project in order to take the proper measures to and approved with misleading or ambiguous documents. reduce risk. He believes this is partly in response to As such, the errors and omissions in contracts and ill- the growing trend towards engineering, procurement drafted claims can become the main causes of lengthy and construction (EPC) contracts and their significant and costly construction disputes in Asia. increase in value. And even though these could be spotted in advance, For ever-larger construction projects, the risks companies tend to come to lawyers almost always after to contractors can be enormous. And when it comes the problems surface, instead of before, says Paul Starr, dispute resolution, Prudhoe has observed an increase in head of infrastructure and dispute resolution at King & third party ad-hoc involvement such as consultants who Wood Mallesons in Hong Kong. provide expert determination. The latter is is a process used in dispute resolution that involves an expert third party. “There has also been a push in certain countries to adopt a more proactive approach to the management of contracts, particularly through the use of the New Engineering Contract (NEC) provisions that encourage time and money claims to be dealt with in a more timely manner in order to avoid costly disputes at the backend, which typically arise in construction projects,” says Garry Crossley, leader of the Asia-Pacific construction practice at Navigant. The standard NEC contract promotes a more collaborative approach to projects, as seen in the frequently quoted clause 10.1, which requires all parties to follow the contracts. The clause is widely adopted across jurisdictions like the UK, South Africa, Australia and New Zealand. In Hong Kong, such clauses are now being slowly introduced, taking the place of the

42 ASIANASIAN LEGAL BUSINESSBUSINESS – FEBRUARY 2017 LEGALBUSINESSONLINE.COM traditional General Conditions of Contract (GCC). “In Hong Kong, there has been a progressive move towards CONSTRUCTION a more collaborative approach with the increasing use of the NEC, particularly for government-related contracts. We have also noticed a move towards greater ““There has also been a push in certain countries certainty for the employer with the use of design and build contracts, which shift the risk to the contractor,” to adopt a more proactive approach to the says Rompotis. management of contracts... in order to avoid costly disputes at the backend.” ADJUDICATION AS SOLUTION In Asia, adjudication is also used in conflict avoidance, — Garry Crossley, Navigant although it’s still in a nascent stage. One hurdle that adjudication faces is that at present, it is not a preferred method for dispute resolution in the region, particularly in Hong Kong. “It isn’t widespread in Hong Kong yet, but elsewhere in Asia, it is proving [to be] an early means payments on time for their work and provide a to resolve disputes, often producing a final answer that mechanism whereby disputes can be resolved quickly. is not later challenged through arbitration,” says Starr. It is also aimed at bringing Hong Kong in line with other But with the proposed introduction of the Security of common law jurisdictions. Payment Legislation (SOPL) in Hong Kong, adjudication Another related approach is arbitration, which could become a compulsory first step in resolving most is frequently used for dispute resolution in Asia, disputes, likely making dispute resolution faster and particularly for construction projects and transactions cheaper. A typical adjudication is resolved within 60 that have a cross-border element. ““The breadth of working days from the start of the process, thanks to a arbitration as a dispute resolution mechanism has been strict timetable. a clear trend in recent times.” says Rompotis. Other SOPL is designed to help main contractors, commonly used methods for resolving disputes in Asia sub-contractors, consultants and suppliers receive are party-to-party negotiation and mediation.

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your schedule against the looking for more efficient ways activities that actually to carry out your transactions? consumed your time during Are you thorough in seeking this past week. And then you to constantly measure can identify this for yourself: improvements in efficiency? What do your activities say to Are you emphasising the your colleagues about what importance of measuring the WHAT priorities matter to you the quality of the services provided most? Now, what would you as well as client satisfaction? rather have “your time spent” LEADERSHIP say about your priorities in the What you celebrate and what coming months? you rebuke Will what you publicly reward What you inquire about — the behaviours you identify MESSAGES Leaders who are successful are and successes you celebrate mindful to walk the job rather within the firm — reinforce than be stuck in their offices. leader, however, is that the the values and priorities that ARE YOU They ask lots of questions and non-verbal aspects of your you as a leader are trying to listen loudly. The questions communication will reveal emphasise? When partners you deliberately ask and the your underlying emotions, take a measured risk with the SENDING? attention those questions motives and feelings. Your intent of benefiting the firm provoke send a clear signal colleagues will evaluate the but their actions fall short, BY PATRICK J. MCKENNA about the prevailing themes emotional content of your is there a history of these that occupy your thinking. Are message, not by what you say partners being rewarded for the questions you want to ask or you inquire about, but by their initiative? Or are they One of the more profound of your partners and the topics how you say it and how you reprimanded for their failed things I’ve learned and try to you plan to focus on consistent look when you say it. efforts? pass along to new leaders with the signals you want to Again, I’m reminded of (be they managing partners convey? How you spend your budget the words of one exemplary or practice heads) is to “act A classic and often What we purposely budget for firm leader who counseled: like you are on stage at all misquoted study by Dr. Albert and how we choose to spend I learned that little gestures times… because you are!” Mehabrian from the University our money speaks volumes have huge significance. Everything you do and say will of California-Los Angeles about our priorities and values. Everything you do is magnified, send messages, set a tone, stated that the total impact What will your 2017 budget and you have to realise that. establish expectations and of any message is based 7 expenditures tell people about Even if you are a bit worn communicate direction about percent on the words used; where you’re focusing your down, smile. People derive a what your priorities are. 38 percent on the volume leadership attention? lot of their outlook from the With that in mind, you and tone of voice; and 55 outlook of their leaders, and need to carefully orchestrate percent on facial expressions What you specifically measure it makes them feel good if you what symbolic acts you may and other body language Usually, a clear indicator appear in good spirits. want to do to create a lasting signals. But Dr. Mehabrian of what deem important is impression and convey what never claimed that you could what you measure, what you stand for in 2017. In other view a movie in a foreign you generate written reports Patrick J. McKenna is an internationally recognised author, words, you must think through language and accurately about, and what you track on lecturer and strategist, as well as the following concerns: determine 93 percent of the a regular basis. If you say that seasoned advisor to the leaders content by simply watching as a firm, your focus should be of premier law firms. He is the Where you spend your time people’s body language. What more on delivering value to author of eight books, most The first thing your partners is important to consider as a clients, are you rigorous about notably his international bestseller, will always look at is where “First Among Equals,” and most recently, “Serving at the Pleasure and how you spend your Asian Legal Business is seeking thought-provoking opinion pieces of My Partners.” This piece first time. Leaders spend time on from readers on a wide range of subjects, including Asia’s legal appeared on the Thomson Reuters whatever issues they think industry, law firm management, technology and others. Please email Legal Executive Institute’s website are most important. Examine [email protected] for submission guidelines. www.legalexecutiveinsitute.com. your day-timer and compare Reprinted with kind permission.

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