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By Jiang Junlu and Jin Shan  King and Wood Mallesons’ Labor & Employment Group

Li, employed by a labor dispatch service provider, has been working at Company A for over 9 years. However, he only works at the accepting company as a dispatched employee, whose wage and remuneration are quite different from the ones of regular staffs.

On December 28, 2012, the Decision Regarding the Modification of Employment Contract Law (the “Decision”) was passed by the Standing Committee of the National People’s Congress, which will be implemented on July 1, 2013. From then, Li’s life will be significantly improved.
Continue Reading The Trend of Labor Dispatch in China

By Susan Ning and Kate Peng
 
On Jan 4th, the National Development and Reform Commission (“NDRC“) published that they had imposed fines in a total amount of RMB 353 million (approximately USD 56 million) on 6 LCD panel manufacturers, including Samsung and LG of Korea and ChiMei, AU Optronics, Chunghwa Picture Tubes and HannStar from Taiwan region.  This is China’s first antitrust enforcement action against international cartels.  It also imposes the highest penalties in China’s antitrust enforcement history.

According to the press releases of NDRC on its official website 1, during the period from 2001 to 2006, the 6 LCD manufacturers, which accounted for about 80% of the global LCD panel market, convened 53 meetings in Taiwan and Korea to exchange market information and negotiate the price of LCD panels.  NDRC received complaints on the cartel from major Chinese TV makers in December 2006.  The TV makers also reported non-price related misconducts of the panel manufacturers, including providing an 18-month warranty only and failing to provide high-end products in a timely manner.
Continue Reading NDRC Imposed Stiff Fines on Multinational LCD Manufacturers in China’s First Antitrust Enforcement Action against International Cartels

By Susan Ning, Ji Kailun and Hazel Yin 

On December 6th, 2012, the Ministry of Commerce (“MOFCOM“) cleared the proposed establishment of a joint venture (“JV“) by ARM Holdings plc (“ARM“), a UK semiconductor intellectual property (“IP“) supplier, Giesecke & Devrient GmbH (“G&D“) and Gemalto NV (“Gemalto“), both providers of security solutions, with behavioral conditions.  This marks the third conditional clearance of JVs issued by MOFCOM.  The JV will be engaged in providing security solutions named trusted execution environments (“TEE“) for consumer electronic devices. Continue Reading MOFCOM cleared Joint Venture between ARM, Giesecke & Devrient and Gemalto with Conditions

by Wang Ling and Zhou Jie  King and Wood Mallesons’ Finance Group

2012 has witnessed another year of growing demand and strong deal flows in the Chinese aviation market. By year end, more than 350 new aircraft will have been delivered for operation in China including commercial airplanes and business jets. Active participation of Chinese banks and leasing companies (through both onshore and offshore entities) along with innovative transaction structures developed for the Chinese market by market participants and their counsels have contributed to the robust growth.

US Export-Import Bank Guaranteed Structure

For the first time in Chinese aviation finance history, a Chinese airline is able to leverage over the credit support of the Export-Import Bank of the United States (“US Ex-Im Bank”) without a guarantee from a Chinese bank or a sovereign undertaking from the Chinese government.
Continue Reading China Aviation Finance Market On the Rise – A Look Back at 2012

 By Ariel Ye  Monique Carroll and Li Li  King and Wood Mallesons’ Dispute Resolution Group

1 Introduction

Historically, Chinese parties were able to avoid, to a large extent, the consequences of adverse awards made against them by international tribunals. This was primarily because Chinese courts were reluctant to enforce foreign arbitral awards against Chinese parties. In recent years, however, the Chinese Government has made significant advances in supporting domestic and international arbitration, in particular, in respect of the enforcement of foreign arbitral awards. Now international arbitration is a reality for Chinese entities doing business with foreign entities. This is reflected by the significant increase in the number of Chinese parties involved in international arbitration, however, there is also an alarming percentage of Chinese parties being unsuccessful in international arbitration. We believe the success rate of Chinese parties in international arbitration can be improved, by addressing a number of key issues set out below.
Continue Reading How Chinese Parties Can Improve Outcomes in Foreign Arbitration

By Susan Ning, Kate Peng and Yunlong Zhang

 

On December 4th and 5th, 2012, the first China Competition Policy Forum (the “Forum“) was held in China University of  Political Science and Law.  The Forum was sponsored by the expert advisory group of the Anti-monopoly Commission of the State Council.   The Directors-General of the three enforcers under the Anti-Monopoly Law (the “AML“), i.e. the Ministry of Commerce (“MOFCOM“), the National Development and Reform Commission (“NDRC“) and the State Administration for Industry and Commerce (“SAIC“) attended the Forum and introduced the latest development of their AML enforcement activities.1

According to Director-General Shang Ming (尚明) of the Anti-Monopoly Bureau of MOFCOM, up to September 30, 2012, a total of 622 merger notification filings were received by MOFCOM, among which 562 were accepted and 510 were closed.  Amongst the cases having been closed, only 1 case was rejected (i.e., Coca Cola’s acquisition of Hui Yuan) and 15 cases were cleared with conditions.   Mr. Shang mentioned the publication of 458 unconditionally approved cases in November this year2,    and indicated that MOFCOM would regularly summarize and release the unconditionally cleared cases in the future.

 
Continue Reading Heads of the Three Antitrust Enforcement Agencies Attended the First China Competition Policy Forum

By Harry Liu and Qiu yue  King and Wood Mallesons’ Dispute Resolution Group  Shanghai Office

As an alternative dispute resolution mechanism, arbitration has been increasingly widely chosen as the dispute resolution method by parties to the commercial contracts. A signatory to the arbitration clause may bring litigation jointly against the other party to the arbitration clause and non-signatories to such arbitration clause. It remains uncertain in judicial practice whether courts have jurisdiction over such joint tort disputes despite of the arbitration clause. The Supreme People’s Court’s view towards the issue also has shifted back and forth. The retrial ruling lately handed down by the Supreme People’s Court after confirmed by its judicial committee gave a clearer answer to the question, which will definitely have a demonstration effect on the judicial practice in the future.
Continue Reading Retrial Ruling of the Supreme People’s Court Settles the Disputes on the Jurisdiction over Joint Tort Cases: Litigation or Arbitration

By Qian Yaozhi, Xia Dongxia, Liu Xiangwen & Zhou We King and Wood Mallesons’ Dispute Resolution Group

The Haifu Case is the first case in China where a court has denied the validity of an agreement containing a valuation adjustment mechanism (“VAM Agreement”). It has caused drastic reactions in the PE industry, and not surprisingly, the retrial of this case by the Supreme People’s Court of China (the “Supreme Court”) has also attracted intense public attention. Recently, the Supreme Court has given its retrial judgment, where the Supreme Court (i) corrects the lower courts’ decisions that completely deny the validity of the VAM agreement, and (ii) distinguishes VAM agreements between shareholders and the company from that between the shareholders only, and affirms the validity of the latter. This retrial judgment can be expected to have considerable influence on the controversial issue of validity of VAM agreement, and to generate significant implications for PE investors as for how to protect their interest.
Continue Reading The Haifu Case Review –Interpreting the Supreme People’s Court’s Retrial Judgment And It’s Implications for PE Investors

By:King and Wood Mallesons’  PE Dispute Resolution Group

The case Haifu Investment Co., Ltd, vs. Gansu Shiheng Non-Ferrous Recycling Co., Ltd and Hong Kong Diya Limited for the defendants’ failure to perform the investment compensation clause under the “valuation adjustment mechanism” (“VAM”), which has drawn high public attention, was finally determined. After its retrial, the PRC Supreme People’s Court (the “Supreme Court”) rendered the final judgment ruling that the old shareholder, Hong Kong Diya Limited, shall bear the compensation liability for the investor.
Continue Reading The Supreme People’s Court Overruled the Lower Court’s Decision on the Haifu vs. Gansu Shiheng Case

By Ding Xianjie Cecilia Lou and Yao Di  King and Wood Mallesons’ Intellectual Property Group  Shanghai Office

On December 14, 2012, the China Trademark Office issued a Notice on Adding Trademark Specifications on Retail and Distribution Service Trademark. In this Notice, the CTMO specifies that “Retail and Distribution Service for pharmaceutical, veterinary, sanitary and medical goods” will be added in Class 35 of the Revision of 10th Edition of Goods and Services Classifications in China, and the new Revision will be effective dated January 1, 2013.

According to the Notice, the newly expanded service will not be deemed as similar to pharmaceutical goods. Also, the services are also different from prior “Distribution for others” in Class 35.
Continue Reading CTMO Released Notice to Open Trademark Registration in Retail and Wholesale Service in China