NYSBA SPRING/SUMMER 2011 | Vol. 29 | No. 1 CORPORATE COUNSEL SECTION Inside 30 th YEAR A publication of the Corporate Counsel Section of the New York State Bar Association Message from the Chair I am very excited to be continued to lay the groundwork for new and exciting leading the Section this year. changes and we already have much to report. It is a privilege to be able to The Section has grown tremendously over the last contribute to this Section’s long 30 years and we are striving to fi nd new and innovative tradition of providing quality ways to continue to bring value to our membership. benefi ts to its unique member- For example, in April, we conducted a CLE/network- ship. This year, the Corporate ing event on Alternative Fee Arrangements at no cost Counsel Section celebrates its to Section members. In March, we offered a scholarship 30th Anniversary and, with that to the Young Lawyers Section Trial Academy (includ- in mind, the Executive Com- ing a travel stipend) to a NYSBA member nominated by mittee is working very hard to a member of our Section. We also plan to have several create an extraordinary year for social/networking events throughout the Spring and our members. During the fi rst Fall at various venues to give you the chance to meet few months of 2011, we have Inside Being an International In-House Corporate Counsel Has The Option of Investment Arbitration: An Important Part Become a High-Risk Business .................................................................3 of an Investor’s Legal Arsenal ...............................................................29 (Marvin G. Pickholz) (Andreas Heuser and Christian Leisinger) Update on Canadian Transfer Pricing ........................................................7 The International Arbitration System: How the Pieces (Jonah Mayles) Interrelate: International Arbitral Institutions ....................................32 Personal Jurisdiction in Canada: Can U.S. Defendants Be (Nancy Thevenin) Subject to Suit With No Meaningful Contacts? ..................................10 International Transactions: An aide memoire to get your (Stephen J. Maddex and Ruba El-Sayegh) dispute resolution clause right! .............................................................41 Foreign Investment in Canada—Is the Door Still Open? ......................13 (Claire Morel de Westgaver) (Shawn C.D. Neylan and Michael Kilby) How to Deal with Pre-Trial Discovery in Continental Europe .............45 Should We Samba, Tango or Mambo? A Primer for Internal (Dr. Denis Gebhardt and Stefan Buettner) Counsel on Getting Started in Latin America .....................................17 Offshore Financing: A Guide for In-House Counsel ..............................47 (Mary Rose Brusewitz) (Sidney S. Goldstein) Issues That U.S. Corporate Counsel Should Consider SECTION EVENTS When Doing Business in Guatemala ....................................................21 Intellectual Property Issues for In-House Counsel: (Alexander Aizenstatd L.) A Report from the Annual Meeting ......................................................50 One Step Ahead: Selected Immigration Issues for (Melissa Y. Yu) Corporate Counsel ..................................................................................26 Corporate Counsel Section Holds Annual Fall Ethics Program.......53 (Sarah Pelud) Member Appreciation Event .................................................................53 Editors: Janice Handler and Allison B. Tomlinson SPECIAL INTERNATIONAL ISSUE other Section members and discuss issues that are of Finally, I want to take this opportunity to give a huge importance to you. thank you to my most recent predecessor, Allison Tomlin- son for all the hard work she did during her time as Chair In the Fall, we’ll be conducting our fourth Corporate of the Section. In large part due to Allison’s planning, this Counsel Institute. The Institute will again be a tremen- year should prove to be a very exciting and productive dous opportunity for you to learn about a variety of one. topics from experts in a collaborative setting. We are continuing our Kenneth G. Standard Internship Program Please do not hesitate to contact me with ideas you and I am excited to announce that we have several new might have about the Section or if any of the programs corporations involved and are working to place seven mentioned above spark an interest in becoming more law school students in internships. Our Technology and involved. I look forward to meeting as many of you as New Media Committee has been working feverishly possible at our events during 2011! to update our website and to develop some innovative tools for in-house counsel. While we continue to be in the Gregory H. Hoffman planning phase for many of the changes, look for new functionality before the end of the year. There are millions of reasons to do Pro Bono. (Here are some.) Each year in communities across New York State, indigent people face literally millions of civil legal matters without assistance. Women seek protection from an abusive spouse. Children are denied public benefi ts. Families lose their homes. All without benefi t of legal counsel. They need your help. If every attorney volunteered at least 20 hours a year and made a fi nancial contribution to a legal aid or pro bono program, we could make a difference. Please give your time and share your talent. Call the New York State Bar Association today at 518-487-5640 or go to www.nysba.org/probono to learn about pro bono opportunities. 2 NYSBA Inside | Spring/Summer 2011 | Vol. 29 | No. 1 Being an International In-House Corporate Counsel Has Become a High-Risk Business By Marvin G. Pickholz Lawyers working in-house for corporations rightly nite term, it is presumed to be a hiring at will which may see themselves as “lawyers for a client.” Unfortunately, be freely terminated by either party at any time for any more and more, they are being viewed as “employees,” reason or even for no reason.” Sullivan v. Harnisch.3 In producing a potentially dangerous consequence for their Harnisch, both the Chief Compliance Offi cer and Deputy function and a genuine dilemma for their corporate Chief Compliance Offi ce were terminated while in the clients. process of looking into matters related to institutional investment advisors and registered investment advisors. Are international (or domestic) in-house lawyers true On the day they were to deliver their report to a senior professionals performing a traditional role, albeit for a executive of their employer, they were fi red. The New single client, or are they “employees,” “gatekeepers,” York intermediate appellate court was constrained to ap- “watchdogs” and “ethicists?” Within the space limitations ply New York law (which may well be the law in many imposed upon the author, these notions will be highlight- other jurisdictions). New York’s “at will” employment ed, if not capable of explications. law took precedence over various other laws, including A. The Evolution of the Role of Modern Day the employer’s own Code of Ethics which required all Lawyers employees “on pain of termination” to “determine” when alerted, whether an employee had engaged in any viola- In-house corporate counsel face increasing attacks tion of its Code of Ethics. How can the law or regulators upon their very function, if not existence as “lawyers.” who enforce it declare in-house counsel to be “watch- In today’s environment, as attorneys for a single client, dogs,” “gatekeepers,” if they can be fi red “at will” for fol- in-house counsel are confronted with domestic and inter- lowing company policy, or the law? The federal obstruc- national laws that are often competing and contradictory. tion statutes are discussed elsewhere in this article. While This maze of laws would confound an entire law school they, like various provisions of several federal statutes, faculty. are often pointed to as protecting in-house counsel, they When a “serious issue” arises, in-house counsel are often afford no protection to in-house counsel who are not left to contend with anonymous “informed sources” who, ethereal concepts, but are real people with families and from their unsifted and unproven claims, pronounce all mortgages. In-house counsel understand that in the “big” forms of malignant intents upon the objects of their self- case, the government may move because of the publicity described “investigations.”1 Forgotten in this process is such a case receives. On the other hand, the “little compa- that the Constitution speaks of trial by jury instead of trial ny, little case” may not merit government attention, or if it by accusation. does, not for years. As a consequence, lawyers are losing historical protections and rights they enjoyed, just as their The head of KPMG’s forensic practice has gone on clients are losing privileges. record to point out the potential traps for a company that entrusts an “internal investigation” to its head of security The role of the lawyer in Anglo-Saxon jurisprudence or similarly titled employee and who are often former dates from the days of William the Conqueror. But it goes government investigators or police offi cers unrestrained back far more deeply into time, to the ancient Greeks, by the niceties of law and believe they have carte blanche. the Hebrews, and Hammurabi. One suspects that even The Financial Times quoted Richard Girgento, head of in their time of cave dwelling human societies needed, KPMG’s U.S. forensic practice, as saying, “It’s fi ne to and had, those who performed the