Lawyers work to re­solve cross-bor­der dis­putes

Le­gal pro­fes­sion­als from China and coun­tries par­tic­i­pat­ing in the ini­tia­tive are es­tab­lish­ing a mech­a­nism to counter a grow­ing prob­lem that could be­come an ob­sta­cle to de­vel­op­ment, as re­ports.

China Daily (Hong Kong) - - CHINA -

In re­cent years, China’s rapid eco­nomic de­vel­op­ment and grow­ing in­ter­na­tional role have seen a large num­ber of Chi­nese en­ter­prises ex­pand­ing over­seas or plan­ning to in­vest in coun­tries par­tic­i­pat­ing in the Belt and Road Ini­tia­tive.

How­ever, the Min­istry of Jus­tice said the process of “go­ing global” has seen a sharp rise in the num­ber of cross­bor­der le­gal dis­putes and cases of ar­bi­tra­tion in­volv­ing Chi­nese busi­nesses.

Mean­while, many Chi­nese in­vest­ments in coun­tries that have em­braced the ini­tia­tive have failed as a re­sult of dif­fer­ences in le­gal pro­ce­dures and na­tional cul­tures.

Faced with the grow­ing num­ber of cross-bor­der law­suits, Chi­nese lawyers and their coun­ter­parts in 65 coun­tries par­tic­i­pat­ing in the ini­tia­tive have com­piled guides of for­eign laws, with the aim of pro­vid­ing le­gal sup­port for busi­nesses and re­duc­ing the risks they face when in­vest­ing over­seas, ac­cord­ing to Wang Jun­feng, chair­man of the All China Lawyers As­so­ci­a­tion.

“Le­gal ser­vices are im­por­tant for safe­guard­ing Belt and Road projects, and a proper le­gal sys­tem is cru­cial for forg­ing ahead with projects such as transna­tional in­vest­ment and build­ing strate­gic mar­itime chan­nels,” he said.

Pro­fes­sional sup­port

In 2013, Pres­i­dent Xi Jin­ping pro­posed the Silk Road Eco­nomic Belt and the 21st Cen­tury Mar­itime Silk Road, known to­gether as the Belt and Road Ini­tia­tive.

As an ac­tive ex­plo­ration of a new model of in­ter­na­tional co­op­er­a­tion and global gov­er­nance, the ini­tia­tive em­bod­ies de­vel­op­ment, co­op­er­a­tion and mu­tual ben­e­fit.

Ac­cord­ing to Xiong Xuan­guo, vice-min­is­ter of jus­tice, since 2013, the trade vol­ume be­tween China and par­tic­i­pat­ing coun­tries has in­creased greatly, but le­gal ser­vices have “lagged far be­hind the prac­ti­cal needs re­quired for so­cial and eco­nomic de­vel­op­ment”.

Sta­tis­tics from the Min­istry of Com­merce show that last year, the total im­port and ex­port vol­ume be­tween China and the 65 par­tic­i­pat­ing coun­tries reached 6.3 bil­lion yuan ($940 mil­lion), while Chi­nese in­vest­ment in those coun­tries was $14.5 bil­lion.

Chi­nese busi­nesses also es­tab­lished 56 eco­nomic and trade co­op­er­a­tion zones in more than 20 par­tic­i­pat­ing coun­tries, with a total in­vest­ment value of more than $18.5 bil­lion. That gen­er­ated $1.1 bil­lion in tax rev­enues and cre­ated about 180,000 new jobs in par­tic­i­pat­ing coun­tries.

He Yong, sec­re­tary-gen­eral of the lawyer’s as­so­ci­a­tion, said co­op­er­a­tion be­tween Chi­nese lawyers and their for­eign coun­ter­parts will “of­fer pro­fes­sional le­gal sup­port, in­clud­ing deal­ing with law­suits and of­fer­ing le­gal ad­vice to their clients, and boost trade and pro­mote in­ter­na­tional eco­nomic and cul­tural ex­changes”.

Ac­cord­ing to the Min­istry of Jus­tice, a typ­i­cal ex­am­ple oc­curred in March last year, although it de­clined to name the par­ties in­volved.

The min­istry said a Sta­te­owned com­pany which makes safety and mon­i­tor­ing equip­ment in Bei­jing signed an in­vest­ment agree­ment re­lated to re­search and de­vel­op­ment with a tech­nol­ogy com­pany in Is­rael.

The Is­raeli com­pany claimed to have bought the rights to a ma­ture tech­nol­ogy and had also ob­tained a patent li­cense granted by lo­cal au­thor­i­ties.

The Chi­nese side hired the Bei­jing Globe-Law Law Firm to con­duct a sur­vey of the Is­raeli com­pany to en­sure its au­then­tic­ity, the ap­pli­ca­tion of the tech­nol­ogy and its own­er­ship rights in the Chi­nese mar­ket.

“We sought as­sis­tance from our coun­ter­parts at lead­ing Is­raeli law firms who spe­cial­ize in in­tel­lec­tual prop­erty pro­tec­tion and are fa­mil­iar with Is­raeli law and le­gal pro­ce­dures. They were able to col­lect in­for­ma­tion or con­nect with rel­e­vant lo­cal au­thor­i­ties to of­fer valu­able in­for­ma­tion,” said Wang Zhengzhi, a se­nior part­ner at Bei­jing Globe-Law.

The Is­raeli lawyers dis­cov­ered that the com­pany had not ob­tained patents is­sued by Is­rael’s in­tel­lec­tual prop­erty pro­tec­tion au­thor­i­ties, and its tech­nol­ogy was not as ma­ture as claimed.

Last month, con­cerned that it might face risks if it in­vested in the tech­nol­ogy, the Chi­nese com­pany con­sulted lawyers. As a re­sult, it de­cided to re­vise the agree­ment and in­vest in sev­eral stages, based on the project’s tech­no­log­i­cal re­search and de­vel­op­ment.

“Pro­fes­sional le­gal sup­port will play an essen­tial role in help­ing busi­nesses to take the ini­tia­tive in ne­go­ti­a­tions and make the cor­rect busi­ness de­ci­sions and then max­i­mize their com­mer­cial in­ter­ests,” Wang Zhengzhi said.

Prac­ti­cal guid­ance

Ac­cord­ing to Jiang Junlu, deputy di­rec­tor of the lawyers’ as­so­ci­a­tion’s in­ter­na­tional com­mis­sion, last month, lawyers from top-tier law firms in China and par­tic­i­pat­ing coun­tries com­piled two books con­tain­ing prac­ti­cal guid­ance on laws re­lated to for­eign in­vest­ment.

Jiang said the ad­vice in­cluded in the books cov­ers laws re­lated to in­vest­ment, trade, la­bor, en­vi­ron­men­tal con­ser­va­tion, in­tel­lec­tual prop­erty and dis­pute res­o­lu­tion.

The first vol­ume, which fo­cuses on in­vest­ment laws in 43 coun­tries, in­clud­ing Myan­mar, the Philip­pines and Rus­sia, has al­ready been pub­lished. The sec­ond, re­lated to the re­main­ing 22 coun­tries, will be pub­lished at the end of the year.

“This guid­ance will en­able Chi­nese politi­cians, busi­ness­peo­ple and ex­perts to fully un­der­stand the le­gal sys­tems and en­vi­ron­ments in­volved in the ini­tia­tive and pro­vide le­gal sup­port for Chi­nese busi­nesses to en­sure they have safe, smooth in­vest- ments abroad,” Jiang said.

Kham­say Soulinthone, chair­man of the Laos Bar As­so­ci­a­tion, said: “The idea of the Belt and Road Ini­tia­tive put for­ward by China is very cre­ative and con­sid­ered rev­o­lu­tion­ary. Although lawyers in dif­fer­ent coun­tries face dif­fer­ent chal­lenges, they all work for global equal­ity and jus­tice. It’s the right time to set up a re­gional lawyers’ co­op­er­a­tion or­ga­ni­za­tion.”

Go­ing global

Although co­op­er­a­tion be­tween China and coun­tries par­tic­i­pat­ing in the ini­tia­tive has made great progress, the lawyers’ as­so­ci­a­tion still faces prac­ti­cal chal­lenges in ex­pand­ing le­gal co­op­er­a­tion.

Shen Lin, a se­nior of­fi­cial at the de­part­ment of di­rect­ing lawyers and no­ta­riza­tion at the Min­istry of Jus­tice, said most par­tic­i­pants are un­der­de­vel­oped economies with un­sound le­gal en­vi­ron­ments, and they are in ur­gent need of fi­nan­cial and tech­ni­cal sup­port from China.

“In the past few years, fail­ures in for­eign in­vest­ments in­volv­ing Chi­nese busi­nesses have risen, and it’s essen­tial to boost co­op­er­a­tion with le­gal pro­fes­sion­als in par­tic­i­pat­ing coun­tries to im­prove pro­fes­sional le­gal ser­vices to help Chi­nese in­vestors,” she said.

Ac­cord­ing to He, of the lawyers’ as­so­ci­a­tion, to im­prove co­op­er­a­tion the as­so­ci­a­tion has es­tab­lished a data­base con­tain­ing the de­tails of 86 Chi­nese lawyers and 121 for­eign lawyers from top-tier firms, who will “use the plat­form to an­a­lyze the laws and share in­for­ma­tion and ex­pe­ri­ence to bet­ter serve Belt and Road projects”.

His com­ments were echoed by le­gal pro­fes­sion­als in par­tic­i­pat­ing coun­tries.

Prashant Ku­mar, chair­man of the Bar As­so­ci­a­tion of In­dia, said: “The Belt and Road Ini­tia­tive is con­sid­ered a his­toric mo­ment and op­por­tu­nity. It has built a com­mu­ni­ca­tion bridge for lawyers from China and rel­e­vant coun­tries to han­dle le­gal dis­putes and set an ex­am­ple to re­solve prob­lems be­tween na­tions in the fu­ture.

“Although we have dif­fer­ences in laws, culture and en­vi­ron­ment, I be­lieve our lawyers will join with their Chi­nese coun­ter­parts to unite con­sen­sus and cre­ate val­ues to­gether.”

Ac­cord­ing to Jiang, the law- yers’ as­so­ci­a­tion will set up rep­re­sen­ta­tive of­fices in par­tic­i­pat­ing coun­tries and re­gions to build joint oper­at­ing re­la­tion­ships and busi­ness al­liances with for­eign coun­ter­parts.

In ad­di­tion, the as­so­ci­a­tion will es­tab­lish an an­nual fo­rum with its for­eign peers to discuss concerns and ex­change views on in­ter­na­tional le­gal ser­vices dur­ing the pro­mo­tion of projects re­lated to the ini­tia­tive, in­clud­ing in­fra­struc­ture con­struc­tion, in­ter­na­tional trade and ship­ping fi­nance.

“The pub­li­ca­tion of this guid­ance is timely for busi­ness­peo­ple in all rel­e­vant coun­tries, and it’s cru­cial for Chi­nese in­vest­ment in for­eign coun­tries,” said Maria Slazak of the Na­tional Coun­cil of Le­gal Ad­vis­ers in Poland.

“The Belt and Road Ini­tia­tive is an op­por­tu­nity for co­op­er­a­tion, in­clud­ing shar­ing in­for­ma­tion and the mu­tual ex­change of needed prod­ucts, which will help Chi­nese lawyers to go global,” she said.

“It’s the right time to set up a re­gional lawyers’ co­op­er­a­tion or­ga­ni­za­tion.”

Con­tact the writer at zhangyan1@ chi­nadaily.com.cn

WANG JIANJUN / FOR CHINA DAILY

Lawyers at­tend a fo­rum held in Bei­jing in June re­lated to le­gal guide­lines for cross-bor­der in­vest­ment.

WANG JIANJUN / FOR CHINA DAILY

Rep­re­sen­ta­tives of the All China Lawyers’ As­so­ci­a­tion and the Laos Bar As­so­ci­a­tion sign a memo on the pro­vi­sion of le­gal ser­vices at the fo­rum in Bei­jing.

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