Japanese big-four firm Nishimura & Ashahi has opened a second China office in Shanghai.
Nishimura & Ashahi’s Shanghai opening comes two months after the firm received a licence by the Ministry of Justice in December 2013. The firm established its first China office in Beijing in April 2010 to support Japanese companies investing in China.
Nishimura & Ashahi said its decision to open in Shanghai was driven by the city’s increasing prominence as a business centre not only in China but also globally, as well as its growth potential in the areas of finance and investment due the newly launched Shanghai Pilot Free Trade Zone.
Nishimura & Ashahi’s new Shanghai office will be staffed by two Japanese lawyers initially, finance partner Toshihiro Maeda and corporate lawyer Takashi Nomura.
It is the firm’s latest expansion in Asia. Last April, the firm launched an office in Myanmar and Thailand (30 April 2013).
Published by admin on March 7th, 2014 tagged Uncategorized | Comment now »
Malacañang on Wednesday rejected the call of the Chinese government for bilateral negotiations in connection with the alleged harassment of Filipino fishermen at the disputed Scarborough (Panatag) Shoal by Chinese authorities.
Instead, the Philippines will pursue the arbitration case it filed before the United Nations (UN), according to deputy presidential spokesperson Abigail Valte on Wednesday.
During a press conference, Valte said the government is already preparing the Memorial—or written pleading—for submission. The memorial will be the country’s formal statement regarding China’s claim of sovereignty over territories in the South China Sea.
“So essentially, the Memorial is already being prepared. While I can tell you generally that it will contain the position of government when it comes to this, I cannot delve into specifics,” she said, adding the Philippines has already made “a solid case before the international community.”
“Our case is based on the rule of law. Our claims are based on international law and… our approach has also been lauded… by most of the members of the international community as far as the path of arbitration that we have chosen to take,” Valte said.
Foreign Affairs Secretary Albert del Rosario had earlier said the Philippines will submit its memorial by March 30, a deadline which Valte said they are ready to meet.
“Everything to bolster the government’s case, of course, will be contained in the Memorial,” she said.
The Philippines, through the Department of Foreign Affairs (DFA), has filed a diplomatic protest against China over several cases of harassment of Filipino fishermen, including last month’s water cannon attack, in Manila-claimed Panatag Shoal off the South China Sea.
President Benigno Aquino III has also asked Beijing to explain their intentions and what the incident was all about.
But China rejected Manila’s protest, insisting it has “indisputable sovereignty over South China Sea islands and their adjacent waters” including Panatag Shoal.
It also urged the Philippines “to work with the Chinese side to resolve differences through bilateral consultations and negotiations.”
Valte said there was “nothing new” in Beijing’s claim.
“Essentially that it was a reiteration of the concept of the nine-dash line over the West Philippine Sea as well as the adjacent waters. So it was nothing new,” she said.
Although admitting China’s recent actions “indeed raises tensions,” she said “the guidance has always been not to respond to provocative acts.”
“The Chief of Staff of the Armed Forces has said these much that we have selected the path of peace, the path of arbitration, and we will stick to that as we have done in the past few years,” Valte said.
No info on China offer
The Palace official, meanwhile, said she has no information regarding reports that China is offering incentives to the Philippines in exchange for the non-submission of the Memorial.
The Philippines sought arbitration under the UN Convention on the Law of the Sea (UNCLOS) January last year to try to declare as “illegal” China’s nine-dash claim, which covers almost all of the South China Sea, including sections that have been declared as the West Philippine Sea.
China has resisted Manila’s move to let a UN body intervene in the disputes, saying the Philippines’ case was legally infirm and carried unacceptable allegations.
Del Rosario said arbitration is the Philippines’ “last resort” to resolve its long-standing territorial dispute with China after political and diplomatic solutions have failed.
Published by admin on March 5th, 2014 tagged Uncategorized | Comment now »
Published by admin on March 4th, 2014 tagged Uncategorized | Comment now »
If you are a foreign invested enterprise (FIE) that needs to secure land use rights in China for your business operations there are many legal obstacles under Chinese law that you will have to navigate a path through before you may reach your goal. How do you begin and what steps do you need to follow? Those questions and more are addressed in an article on the “China Briefing” website, posted on February 19, 2014. This article provides you with a good basic understanding of how to secure land use rights. Sections of this article are posted below for your information. The article is entitled, “Obtaining Land Use Rights for FIE’s in China”.
“SHANGHAI – Order No. 55, disseminated by China’s State Council in 1990 (“Order 55”), allows foreign investors to acquire land-use rights for business operations. However, China employs highly rigid rules and administrative control over the grant or transfer of land-use rights, and any change of the title or purpose of the land-use rights requires legal procedures to be carried out with government authorities. The Ministry of Land and Resources (MLR) and its local Land and Resource Bureaus (LRB) oversees land use registration and alterations. Nevertheless, all individuals or entities must utilize the land strictly in compliance with the general plan of land usage formulated by the state and local government.
Individuals and non-governmental entities in China cannot obtain land ownership, but instead must exercise land-use rights for a specified term through an up-front payment of land-use premiums. The Land Administration Law of China explicitly stipulates that all urban land in China is owned by the state (“state-owned land”), and the suburban and country areas are either owned by the state or rural collectives (“collective land”). For construction purpose, such as building manufacturing plants, warehouses, or infrastructures, individuals or entities must apply for state-owned land.
In China, the establishment or alteration of land-use rights requires registration with the government. According to the Property Law of China, land-use rights may only be established upon successful registration with the land administration authority, which is usually the local LRB. After the registration, the LRB will issue a land-use rights certificate to the land user as a token of title.
For a start-up FIE, the general procedure for acquiring the land-use rights certificate is to first apply for a Certificate of Approval at the Ministry of Commerce (MOFCOM) or local MOFCOM office, depending on the size and industry of the potential company. Within 30 days after obtaining the Certificate of Approval, the foreign company will need to complete the business registration process at the Administration of Industry and Commerce (AIC) to obtain a business license.
If the FIE already has a contract for obtaining the land-use rights at the moment, they should apply for the land-use rights certificate at the local LRB within 30 days following the issuance of the business license by the AIC. The Certificate of Approval and the business license will be reviewed by the local LRB before they issue the land-use rights certificate.
Acquiring Land-Use Rights
Generally, there are two ways for foreign investors to acquire land-use rights in China – directly from the government or from existing land users in the market. According to Order 55, land-use rights can be granted or allocated by the government. The rights can also be transferred, leased, or pledged by a land user who legally obtained the land-use rights from the government.
Grant of Land-Use Rights
Foreign investors can access government-granted land-use rights through agreement arrangements with the government or through a bidding and auction process. By signing a contract with the government (usually with the LRB at the municipal level), foreign investors will be granted land-use rights over a specified plot of state-owned land for a fixed period.
There are maximum terms defined for granted land-use rights based on the proposed usage of the land. For residential estates, the maximum term is 70 years. For land of industrial, educational, scientific and technological, cultural, health, sports, comprehensive or other uses, the maximum grant should be no longer than 50 years. For land of commercial, tourist and recreational uses, the maximum term is 40 years.
RELATED: Office Premise Requirements for WFOE, FICE and RO Registration in China
The land-use rights premium should be paid as a lump sum within 60 days following the conclusion of the signing of the contract. The land-use rights certificate should be obtained upon land registration within 30 days after the premium has been fully paid.
Land-use rights granted by the government are allowed to be transferred, leased, or pledged. However, these activities are still bound by the grant contract signed with the government, and government approvals should be obtained for any proposed changes in the land’s purpose, the grant period, or the land development plans. In these cases, a new government grant contract might be necessary.
Allocation of Land-Use Rights
Order 55 allows the gratuitous allocation of land-use rights by the government for the purpose of:
Government agencies and military bases;
Urban infrastructure and public interest;
Energy, transportation and water irrigation infrastructures particularly supported by the state; or
Other uses legally allowed.
Despite this free lunch, the downside of such an arrangement is that the government can retrieve the land-use rights anytime without giving any compensation. The other downside is that land-use rights allocated by the government are generally not allowed to be transferred, leased, or pledged unless permission has been granted by both the local LRB and property administration authority with the following conditions being fulfilled:
The land user is a company, enterprise, other economic organization, or individual;
The land user has obtained a land-use rights certificate;
The land user owns the property ownership certificate for the buildings and other; attachments established on the land;
A contract for granting the land-use rights has been signed between the land user; and the government and the land use premium has been paid in full.
Furthermore, although there is no fee for acquiring the allocated land-use rights, foreign investors still need to pay a yearly site use fee based on the acreage, usage, and location of the land. The rate for the site use fee varies from region to region, usually ranging from RMB5 to RMB300 per square meter.”
Acquiring land use rights is not easy but it can be done if you let experts guide you, and if you follow their advice.
The entire article referred to above may be found at:
Hawkeye in China
Published by admin on March 3rd, 2014 tagged Uncategorized | Comment now »
Last week, Penn Law hosted a panel discussion on “Rights Litigation, Law and Political Reform in China”in Fitts Auditorium. The event was divided into two parts: the first part consisted of a panel in which the speakers discussed what the state of the rule of law in China was, and the second part consisted of a panel in which the speakers discussed rights protection, activist lawyering, accountability, and reform.
Speakers on the first panel included Li Zhuang, a prominent lawyer in Beijing; Lu Junning, a Chinese political scientist; Zhu Ruifeng, a Chinese online journalist; Zhang Kai, a Chinese human rights lawyer; and Zhang Jingjing, a Chinese public interest lawyer. Lana Xu, a graduate student at Penn and Chinese citizen, referred to the people on this panel as “the heroes of China,” known for representing famous human rights cases.
The second panel featured experts on China, activism, and human rights. It included people such as Ira Belkin, a law professor at NYU, Jerome Cohen, another law professor at NYU, and Goubin Yang, a professor at Penn. Topics of discussion included labor law, constitutional law, criminal defense, and rights lawyering.
The main focus of the panelists’ discussions were how the legal picture in China is extremely complicated and, while there are some successes, there are major failures in regards to rights lawyering and rights protection.
The talk was open to the public, with some of the audience members traveling from as far as Harvard to listen to the speakers. Audience members were provided headsets that translated Chinese to English or English to Chinese since both languages were spoken during this talk.
Published by admin on February 27th, 2014 tagged Uncategorized | Comment now »
For years, Vietnam and Hong Kong have built strong ties whether in terms of trade, tourism or otherwise. Given my role as the Secretary for Justice of Hong Kong, my focus is naturally law-related.
Without seeking to downplay the importance of other contributing factors, it is clear that the effectiveness of our legal system, legal infrastructure, and law-related services (including dispute resolution services) has played an important role in making Hong Kong a global financial and commercial centre.
A quick look at some of the international ratings will illustrate this point. In the “Economic Freedom of the World: 2013 Annual Report” published by the Fraser Institute last September, Hong Kong continues to be ranked as the world’s number one free economy.
In the World Competitiveness Report 2013 published by the IMD World Competitiveness Centre, Hong Kong also came first. In the “Global Opportunity Index: Attracting Foreign Investment” published by the Milken Institute in March 2013, Hong Kong likewise came first in the context of attracting foreign direct investment.
Behind these assessments and ratings, one common feature is that the various institutes took into account the effectiveness of Hong Kong’s legal environment, whether expressed as the “legislative framework”, “legal enforcement of contracts”, the “efficiency of legal framework in settling dispute” or otherwise.
Capitalising on our robust legal system and legal infrastructure, it is the steadfast policy of the Hong Kong Government, and one of the key priorities of my department (the Department of Justice), to promote Hong Kong as a centre for international legal and dispute resolution services in the Asia Pacific region.
One of our focuses is naturally international arbitration, a mode of dispute resolution which enjoys great popularity amongst the international business community and is gaining more and more momentum in the Asia Pacific region. The reason for this trend is totally understandable. Businessmen normally do not prefer to litigate, still less to litigate in a foreign place and subject to a foreign legal system with which they are not familiar.
International arbitration is the natural substitute. Besides, confidentiality, cost-effectiveness, choice of venue, choice of expert arbitrators, flexibility of the arbitral process and ease of enforcement of arbitral awards also explain the growing popularity of international arbitration.
HK and Vietnam
So what can Hong Kong offer in terms of international legal and dispute resolution services? Given its close proximity to Vietnam and the strong ties we have built, Hong Kong is an ideal neutral venue for international legal and arbitration services to Vietnamese businesses, including the resolution of disputes with foreign enterprises and Mainland Chinese companies.
Hong Kong has a robust legal system. Due to her colonial history, Hong Kong has long been a common law jurisdiction. After becoming a special administrative region of the People’s Republic of China in 1997, Hong Kong remains a common law jurisdiction under the “One Country, Two Systems” principle and is indeed the only common law jurisdiction in the Greater China region. Common law is no stranger to the international business community and is known to be effective in protecting property and commercial rights.
We have a Judiciary known for its quality and independence, which is absolutely free from any interference. Indeed, judicial independence is guaranteed on a constitutional level under our Basic Law (which is in substance our mini-constitution). The Court of Final Appeal, our highest court, is served not only by top judges from within Hong Kong but also world-class judges from other common law jurisdictions including serving Supreme Court judges from the UK and retired chief justices from Australia.
As regards commercial dispute resolution, our courts adopt an arbitration-friendly approach. Where parties have agreed to settle their disputes through arbitration, our courts will stay the courts proceedings in favour of arbitration and will uphold the wide discretion of arbitrators and the flexibility of the arbitral process.
According to the World Economic Forum Global Competitiveness Report 2012-13, in so far as judicial independence is concerned, Hong Kong ranked 12th out of 144 countries and was amongst the best in Asia, and indeed the best out of all the jurisdictions that it surveyed in Northeast and Southeast Asia.
Besides, the judicial system of Hong Kong has been highly regarded by commentators, including expatriates. The August 22, 2012, edition of the Asian Intelligence, an independent fortnightly report on Asian business and politics, sets out a comparison table on expatriate perceptions of the quality of the judicial systems of various Asian jurisdictions as well as Australia and the US based on the views of a number of expatriate business executives. The following are the comments on Hong Kong:
“The [judicial] system is transparent, accessible, and efficient. Hong Kong is favoured as a centre for commercial dispute resolution. The local system of barristers, [solicitors] and judges is complemented by more offices of foreign law firms than any other city in Asia, which is a testament to its openness and its international status. Many of the foreign offices are regional centres and also support Mainland China business.”
Strong legal profession
Hong Kong’s strong team of legal professionals and dispute resolution practitioners also contribute to Hong Kong’s success as a leading centre of international legal and dispute resolution services.
As at January 30, Hong Kong had a total of over 1,200 practising barristers, over 7,700 practising solicitors and over 1,400 registered foreign lawyers. In terms of law firms, there were a total of 817 Hong Kong solicitors firms and 72 registered foreign law firms. In short, there is readily available in Hong Kong top quality legal expertise and international legal services.
Other than helping their clients to resolve commercial disputes, many lawyers in Hong Kong are also highly experienced in advising on the legal issues and risk management relating to cross-border and international business, e.g. the protection of intellectual property rights in international trade. In fact, this is a topic for the seminar today, and I hope you will find the information and discussion useful.
One important point to note is that in Hong Kong, parties in arbitration may retain advisers without restrictions as to their nationalities and professional qualifications. In other words, Vietnamese companies and lawyers may team up with Hong Kong lawyers for arbitral proceedings conducted in Hong Kong.
User-friendly arbitration legislation
Hong Kong’s role as an ideal neutral place for international commercial arbitration may also be attributed to our user-friendly legislative framework. Our current arbitration law, known as the Arbitration Ordinance (Cap 609), came into effect in 2011. It is based on the UNCITRAL Model Law on International Commercial Arbitration, which is well understood by the international arbitration community.
The Hong Kong Arbitration Ordinance applies to arbitration whereby parties have chosen Hong Kong as a seat of arbitration. As you know, the seat of arbitration determines which jurisdiction’s arbitration laws apply to the proceedings and which courts may exercise supportive and supervisory powers over the arbitration.
In the case of Hong Kong, our Arbitration Ordinance reinforces the advantages of arbitration, including respect for parties’ autonomy as well as savings in time and cost for parties opting to resolve their disputes by arbitration. At the same time, the ordinance contains provisions which seek to enhance confidentiality of arbitration proceedings and related court hearings.
Besides, our Arbitration Ordinance is updated from time to time to reflect the latest developments in the international arbitration scene. For example, in July 2013, legislative amendments were enacted to make it clear that emergency relief granted by an emergency arbitrator before the establishment of an arbitral tribunal, whether in or outside Hong Kong, is enforceable in accordance with the provisions of the Arbitration Ordinance.
Enforcement of awards made in HK
Enforcement of arbitral awards is of course an important consideration in the context of dispute resolution. Why go for arbitration if you cannot enforce the arbitral award? Parties who choose Hong Kong as the seat of arbitration can rest assured that arbitral awards made in Hong Kong are enforceable in over 140 Contracting States to the New York Convention on the Recognition & Enforcement of Foreign Arbitral Awards.
Arbitral awards made in Hong Kong can also be enforced in Mainland China and Macau through the arrangements signed between Hong Kong and these jurisdictions for reciprocal enforcement of arbitral awards.
Diverse pool of arbitrators
In Hong Kong, other than the lawyers, many professionals in other disciplines, such as accountants, engineers and surveyors, also serve as arbitrators or take on other roles such as counsel for parties or expert witnesses in arbitration proceedings.
The Hong Kong International Arbitration Centre (HKIAC) maintains a Panel of Arbitrators comprising professionals with substantial experience as arbitrators, and a List of Arbitrators for other professionals qualified in the field of arbitration.
As of January 2014, there were 336 persons on the Panel of Arbitrators and 124 persons on the List of Arbitrators. Many arbitrators on the HKIAC Panel or List are well-known and very experienced arbitrators of different nationalities and they have received their professional training from many different jurisdictions around the world.
World-Class Arbitration Institutions
On top of our user-friendly legislation and a pool of highly qualified arbitration practitioners, Hong Kong is privileged in that its arbitration services are supported by the secretariats of well-known arbitration institutions that are housed in excellent facilities.
Our home-grown HKIAC has emerged as the focal point of arbitration in Hong Kong and beyond since its establishment in 1985. Over the years, HKIAC has earned international recognition and has been providing excellent support and services to the arbitration community as an independent and non-profit-making body.
In recent years, other reputable arbitration institutions have established their presence in Hong Kong. In 2008, the Paris-based International Chamber of Commerce opened the first overseas branch of the Secretariat of its International Court of Arbitration in Hong Kong. In 2012, the China International Economic & Trade Arbitration Commission (CIETAC) also set up its Hong Kong office, which is the first such centre established by CIETAC outside the Mainland.
A very recent development is the plan of the China Maritime Arbitration Commission (CMAC) to set up a branch office in Hong Kong. Being a key maritime arbitration institution in Mainland China, CMAC’s presence in Hong Kong would further enhance Hong Kong’s role in the resolution of maritime disputes, and thereby reinforce our position as a leading international arbitration centre in the Asia Pacific region.
Another international law-related organisation which may likely enhance its presence in Hong Kong in the near future is the Permanent Court of Arbitration (PCA), a leading international institution with its headquarters in the Hague with a long history and good reputation in the field of international investment arbitration.
In this regard, I note that the first ever PCA-administered Investor-State arbitration case heard in Hong Kong at the HKIAC last year was related to an investment dispute between the Government of Vietnam and a US investor. In that particular case, I learnt from a recent news report that the arbitral tribunal had issued the final award last month, which dismissed the investor’s claim against the Government of Vietnam and awarded the state with full costs. With this experience I am sure that our HKIAC will stand ready to act as the host to help administer other Investor-State arbitration cases in the near future.
Hong Kong will continue to ensure that our legal infrastructure will stay at the forefront of international development so as to maintain and enhance our status as a leading centre for international legal and dispute resolution services. It will be in our mutual interest to enhance co-operation between Hong Kong and Vietnam in the context of international legal and dispute resolution services, and I very much look forward to more dialogues and exchanges between the two places.
Secretary for Justice Rimsky Yuen gave this speech at the “Hong Kong – An International Hub for Legal & Arbitration Services” seminar in Vietnam on February 20.
Published by admin on February 26th, 2014 tagged Uncategorized | 1 Comment »
Yankees third baseman Alex Rodriguez will be suspended for the entire 2014 regular season and postseason, arbitrator Fredric Horowitz ruled on Saturday.
Major League Baseball had sought a 211-game suspension based on what has been described as overwhelming evidence that Rodriguez not only obtained illegal performance-enhancing substances from the now-shuttered Biogenesis anti-aging clinic in South Florida, but also sought to hinder their investigation into those allegations.
Horowitz reduced that to 162 games, still the longest drug suspension and longest non-lifetime suspension in baseball history.
“For more than five decades, the arbitration process under the Basic Agreement has been a fair and effective mechanism for resolving disputes and protecting player rights,” MLB said in a statement. “While we believe the original 211-game suspension was appropriate, we respect the decision rendered by the Panel and will focus on our continuing efforts on eliminating performance-enhancing substances from our game.”
In a statement, the 38-year-old Rodriguez continued to proclaim his innocence and said he would appeal the decision in a federal court, even though courts rarely overturn arbitrator’s decisions involving collectively bargained contracts.
“I have been clear that I did not use performance enhancing substances as alleged in the notice of discipline, or violate the Basic Agreement or the Joint Drug Agreement in any manner, and in order to prove it I will take this fight to federal court,” he said in the statement. “I am confident that when a Federal Judge reviews the entirety of the record, the hearsay testimony of a criminal whose own records demonstrate that he dealt drugs to minors, and the lack of credible evidence put forth by MLB, that the judge will find that the panel blatantly disregarded the law and facts, and will overturn the suspension.”
If the ruling stands, Rodriguez will forfeit $22,131,147 of his 2014 base salary of $25 million. The ‘14 Major League season is defined as lasting 183 days, and with Rodriguez suspended for 162 games, he will be paid nearly $3 million for the remaining 21 days. His contract calls for an additional $61 million in base salaries from ‘15-’17, and Rodriguez will also receive $3 million on Wednesday — part of the signing bonus he got when he inked his current contract in ‘07.
It also would give the Yankees more financial flexibility and a greater ability to stay under the luxury tax threshold in the upcoming season, theoretically increasing their ability to bid on Japanese free-agent right-hander Masahiro Tanaka.
“The New York Yankees respect Major League Baseball’s Joint Drug Prevention and Treatment Program, the arbitration process, as well as the decision released today by the arbitration panel,” the club said in a statement.
The Major League Baseball Players Association, which had participated in his defense, issued a statement in the wake of the ruling.
“The MLBPA strongly disagrees with the award issued today in the grievance of Alex Rodriguez, even despite the Arbitration Panel’s decision to reduce the duration of Mr. Rodriguez’s unprecedented 211-game suspension,” it read. “We recognize that final and binding decision has been reached, however, and we respect the collectively-bargained arbitration process which led to the decision. In accordance with the confidentiality provisions of the (Joint Drug Agreement), the Association will make no further comment regarding the decision.”
The original 211-game suspension was handed down by Commissioner Bud Selig on Aug. 5 and was to go into effect on Aug. 8. Had Rodriguez accepted the suspension at that time, he would have missed the remainder of the 2013 season and postseason and the entire 2014 season.
Rodriguez pointed out that he has never tested positive for PEDs, although he did admit in 2009 he used steroids from 2001 through 2003. Fourteen other players were suspended on “non-analytical” grounds in August. Each received 50 games except Brewers slugger Ryan Braun, who sat out 65 games. Braun had previously tested positive but had a suspension overturned on appeal after questioning the handling of his testing sample.
Rodriguez was the only player disciplined at the time who chose to appeal. He faced the harshest penalty because, according to reports, MLB believed he had not only used PEDs but actively attempted to interfere with their investigation.
Major League Baseball launched its investigation when it heard reports that Biogenesis was supplying players with synthetic testosterone and human grown hormone. The issue became public in January 2013 when the weekly Miami New Times published a series of articles that alleged a link between more than 20 players and Biogenesis founder Anthony Bosch.
Published by admin on February 25th, 2014 tagged Uncategorized | Comment now »
Courts in China’s Guangdong Province are adopting new ways in order to track and monitor the large numbers of cases that crowd their dockets every day; they have taken to using modern information technology (IT) to assist them with making their work more efficient and the overall legal system much more manageable.
The “China Daily” newspaper published an article about the courts and IT on February 28, 2014. This article, entitled ”IT Enables Court to Better Implement Verdicts”, by reporter Qiu Quanlin delves into the efforts of the courts in Guangdong Province to streamline the legal system in their Province. A daunting task to be sure, but I think credit must be given to those involved for their efforts to cast aside the old ways of managing their court system and to find a better way.
“China Daily” reporter Qiu Quanlin’s article is an interesting look into just some of the changes that are filtering into China’s legal system. This article in part reports as follows:
“Information technology has been put to good use to enhance judicial procedures, boost transparency and make it easier to carry out judgments and verdicts, a senior judge in Guangdong province said.
Zheng E, president of Guangdong Provincial High People’s Court, said courts in the province have integrated information technology into their management network.
“Information related to each verdict and judgment is recorded in the network, allowing us to closely monitor how verdicts and judgments are being carried out,” Zheng said.
With the network, the Guangdong court has established an online coordinated command center with government authorities and financial institutions.
“Using the online command center, we can quickly discover the properties of individuals and companies who refuse to adhere to verdicts and judgments against them,” Zheng said.
Thanks to IT, the judgment implementation rate of Guangdong’s courts increased from 55.8 percent in 2009 to 82.5 percent in 2013, according to the provincial high people’s court.
“The online command center has greatly helped increase efficiency in implementing verdicts and judgments,” Zheng said.
Zheng called for greater use of technology to establish a tougher social credit system, involving parties such as financial institutions, civil aviation, insurance and tourism authorities.
“The authorities involved should impose tough restrictions on parties who refuse to carry out judgments and verdicts,” Zheng said.
Sources with the Guangdong court said the number of verdicts and judgments that require compulsory implementation has gradually fallen in recent years, while those that are to be implemented voluntarily increased from 40.8 percent in 2009 to 49 percent in 2013.
“Measures should be adopted to stop individuals or parties who refuse to adhere to judgments and verdicts from buying homes, getting access to finance, investing and other business activities,” Zheng said.
Zheng said the Guangdong court has cooperated with the Guangzhou branch of the People’s Bank of China to develop a credit database.
“Information on verdicts and judgments which have not been implemented will be recorded in the database. Those who refuse to heed the verdicts and judgments will not be offered loans,” Zheng said.
The court has also worked with local government authorities, including land resource and housing departments, to build a system that allows for credit rewards or penalties, Zheng said.
“New projects will not be approved for parties who refuse to carry out verdicts and judgments,” Zheng said.
The list of individuals and parties who defaulted will also be announced in due course, according to Zheng.
“Those who do not adhere to the verdicts will come under increasing public pressure, and will be restricted from conducting business activities,” Zheng said.
“Implementing verdicts and judgments is not simply a judicial issue. From the perspective of long-term solutions, we should build a social credit system to improve compliance,” Zheng said.
Courts in Guangdong province handled about 14,300 administrative lawsuits in 2013, reflecting greater legal awareness of government agencies and officials, sources with the Guangdong Provincial People’s High Court said.
The court also revealed that government agencies and officials above county and district levels lost 18.7 percent of these lawsuits last year.
“We have introduced a series of measures to prevent government agencies and officials from hindering cases against them and to ensure that individuals or organizations that believe their rights have been infringed by government agencies have their administrative lawsuits accepted by the court and are fairly treated,” said Zheng E, president of Guangdong Provincial High People’s Court.
The court implemented a pilot system for dealing with administrative lawsuits in 2012. Lawsuits against government agencies above county level are transferred to intermediate courts or courts in other counties to be handled.
“The system has helped build more transparent and fair procedures,” Zheng said.
Also, the provincial high people’s court has introduced a system for dealing with such lawsuits. It requires chief executives of government agencies to appear in court during the procedures.
“Government officials should not be afraid of appearing in court. To some degree, the proceedings against government agencies or officials will help enhance legal awareness among the parties involved,” Zheng said.
China introduced a draft amendment to the Administrative Procedure Law at the end of 2013. It enhances the current law to better protect a person’s right to sue government agencies and officials.
Ou Zhenzhi, a deputy to the Guangdong Provincial People’s Congress, said courts should boost efforts to ensure people’s rights and increase efficiency.
“It is of great significance to require chief executives of government bodies to appear in court in lawsuits. A county head or a mayor has to think twice in handling government affairs if they face a possible lawsuit,” Ou said.”
This article may be found in full at: http://china.org.cn/china/2014-01/28/content_31326648.htm
Hawkeye in China
Published by admin on February 24th, 2014 tagged Uncategorized | Comment now »
On January 21, 2014, “mondaq” posted on its website a very informative article about the amendments to company registration laws that are just around the corner here in China. This article entitled “China: The interpretation of recent amendments to the Company Law of the Peoples Republic of China”, by Mr. Jiang Rongqing, contains a very useful reference chart to aid you in your understanding of the new amendments. This article is reprinted in part below. Among others, Mr. Rongqing makes the following comments about the registration of limited liability companies:
“On December 28th, 2013, the Standing Committee of the National People’s Congress approved amendments to the company law, which will come into force on March 1st, 2014. The major change is to ease company registration, which would stimulate more investments and shape a better environment for deepening market reform.
The simplification of registration and cancelation of registration capital thresholds would probably trigger a steep rise in quantity of small and medium-sized enterprises. However, with respect to the quality of those increased companies, and to what extent they can function adequately and satisfactorily, there still leaves a doubt.
The detailed revisions with textual analysis, as my interpretation, are as follows:
|Amended Text||Original Text||Interpretation|
|1. Delete “actually paid capital” in Article 7, paragraph 2.||Article 7 For a lawfully established company, the company registration authority shall issue a company business license to the company. The date of issuance of the company business license shall be the date of establishment of the company.
The company business license shall state the name, domicile, registered capital, actually paid capital, business scope, legal representative, etc.
If any of the items as stated in the business license is changed, the company shall modify the registration and the company registration authority shall replace its old business license by a new one.
|Actually paid capital is no longer a matter for company registration record.
However, it should be noted that shareholders in a limited liability company shall bear the limited liabilities in accordance with the total amount of their subscribed capital contributions. Thus, to some extent, the size of the registered capital would still reflect a company’s decided financial strength and its capacity to bear civil liabilities.
The more registered capital, the more liability each shareholder will bear within the scope of their subscribed capital.
Accordingly, for shareholders, it is unwise to make subscriptions willfully solely upon the new amended system.
|2. Article 23(2) has been amended to read “(2) capital contributions should comply with the regulated all shareholders’ subscribed capital contributions by the articles of association”.||Article 23 The establishment of a limited liability company shall meet the following conditions:
||No statutory minimum amount of the registered capital will be set for limited liability company.
That is to say, one Yuan is enough for registering a limited liability company.
|3. Article 26 has been amended to read “The registered capital of a limited liability company shall be the total amount of capital contributions subscribed to by all the shareholders registered in the company registration authority.”
“If any law or administrative regulation prescribes a relatively higher minimum amount of registered capital of a limited liability company, the provisions of that law or administrative regulation shall be followed”.
|Article 26 The registered capital of a limited liability company shall be the total amount of capital contributions subscribed to by all the shareholders registered in the company registration authority. The amount of the initial capital contributions made by all shareholders shall not be less than 20% of the registered capital, nor less than the statutory minimum amount of registered capital, the margin shall be paid off by the shareholders within 2 years from the day when the company is established; for an investment company, it may be paid off within 5 years.
The minimum amount of registered capital of a limited liability company shall be RMB 30, 000 Yuan. If any law or administrative regulation prescribes a relatively higher minimum amount of registered capital of a limited liability company, the provisions of that law or administrative regulation shall be followed.
|The amended paragraph 2 mainly refers to the provisions on requirements of minimum registered capital in Securities Law of the People’s Republic of China, Law of the People’s Republic of China on Commercial Banks, Regulations of the People’s Republic of China on Managements of International Freight Forwarders etc.|
|4. Delete Article 27, paragraph 3.||Article 27 A shareholder may make capital contributions in cash, in kind, or intellectual property right, land use right, or other non-monetary properties that may be assessed on the basis of currency and may be transferred according to the law, excluding the properties that shall not be treated as capital contributions under any law or administrative regulation.
The value of the non-monetary properties as capital contributions shall be assessed and verified, which shall not be over-valued or under-valued. If any law or administrative regulations provides for the value assessment, such law or administrative regulation shall be followed.
The amount of the capital contributions in cash paid by all the shareholders shall be no less than 30% of the registered capital of the limited liability company.
|Since the amendments remove the requirements on minimum registered capital the 30% monetary contribution turns out to be meaningless.
For people who have technical background, they don’t have to be limited to the 3% monetary contribution requirement as a support for their technical contribution.
Now, after the amendments, technical or other appreciable in-kind contributions can be “paid” in full on establishing a company.
|5. Delete Article 29.||Article 29 The capital contributions made by the shareholders shall be verified by a lawfully established capital verification institution and the institute shall issue a certification to prove the contribution.||The requirements for capital contributions verification has completely become a history and fees for establishing a company have been largely reduced (almost no other fees except registration fee are required).|
|6. Change Article 30 into Article 29 and Article 30 has been amended to read “After the initial capital contributions made by the shareholders in compliance with the articles of association, the representative designated by all the shareholders or the agent entrusted by all the shareholders shall apply for establishment registration by submitting a company registration application, bylaw, capital verification and other documents to the company registration authority.”||Article 30 After the initial capital contributions made by the shareholders have been verified by a lawfully established capital verification institution, the representative designated by all the shareholders or the agent entrusted by all the shareholders shall apply for establishment registration by submitting a company registration application, bylaw, capital verification and other documents to the company registration authority.||Shareholders shall make registration upon their subscribed capital contributions and subscribing time. After all the capital contributions have been paid off in accordance with the articles of association, all the shareholders may designate a representative or an agent to apply for establishment registration without capital verification.
Procedures are simpler for paying registered capital since there would be no need to open an account or do the verification.
The Chinese government has been encouraging the development of new businesses within China for some time now as it tries to move from an export driven economy to a domestic retail economy. To this end, it is now taking actions to make it easy to register new companies, a move that should help to bring the results the government is seeking. However, as stated by Mr. Rongqing above, it remains to see what the quality of the new companies the new amendments beget is. We should know more beginning on March 1, 2014.
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Published by admin on January 26th, 2014 tagged Uncategorized | Comment now »
There have been some changes made to China’s Trademark laws that you should be aware of if you are thinking of doing business in China, or, if you are already doing business here. The protection of your intellectual property is of paramount importance to all foreign businesses in China. Realizing that foreign businesses will either not come to China, or leave China if their IP is not protected, the Chinese government is moving forward incrementally to change its IP laws to reassure foreign businesses that their IP is safe in China.
On December 31, 2013, “Mondaq” posted an article on its website which gives a detailed accounting of the newest update to China’s Trademark laws, This very informative article, entitled, “China’s New Trademark Implementing Laws” by Alan C.W. Chiu, is reprinted below in case you missed it last year.
“Further to our Legal Update “China’s New Trademark Law Introduces Key Changes”, the China Trademark Office (CTMO) together with the PRC Trademark and Adjudication Board (TRAB) have jointly drafted the new PRC Trademark Law Implementing Regulations (Draft Regulations) detailing the procedures and logistics of different trademark procedures, clarifying the uncertainties and ambiguities under the new law and regulating the practices of trademark agents in China.
This update gives a quick overview of the key proposed changes put forward by CTMO and TRAB in the latest Draft Regulations.
1. E-service-The Draft Regulations require e-filings to be made in a specific format designated by CTMO and expressly recognize electronic communications or service of all kinds of documents by CTMO and/or TRAB. Interestingly, for documents served by electronic means on CTMO and/or TRAB, the service takes effect on the date of actual receipt by the officials; whilst for documents served by CTMO and/or TRAB on the relevant parties through electronic means, the papers are deemed to be duly served on the date of dispatch unless the recipients prove otherwise.
2. Time limits – For registration, review, opposition, invalidation and cancellation procedures, the newly introduced examination time limits will not cover the time required for certain special procedures. For example, if CTMO or TRAB has to serve any documents through publication in a gazette; if amendment or clarification of the parties’ submissions is required; if another round of evidence exchange is required; if submission of use evidence/ ballot for same day applications is called for, etc. Instead of relying on the General Principles of Civil Law and the Civil Procedure Law in China, clear rules for the computation of time limits are provided in the Draft Regulations, e.g., the first date is excluded in calculating all deadlines; for deadlines calculated in months, the deadline falls on the corresponding date on that month; in case the deadline falls on a statutory holiday, it will automatically be postponed to the next working date thereafter.
3. 3D mark – For a 3D mark application, the applicant must make it clear on the application form that the mark is three dimensional, and submit drawings/ pictures of prescribed dimensions showing different views of the mark (at least from three sides).
4. Sound mark – For a sound mark application, the applicant must include the sound mark clearly on the application form, using a stave divided into bars and showing the musical notes, and submit the same together with a written description and the corresponding sound sample (probably on CD or USB).
5. Multi-class applications – In a multi-class application, if the application in one class is blocked by a cited mark, the applicant is entitled to apply to split the application, hence allowing the unblocked class (es) to proceed to registration and dealing with the blocked class separately.
6. Same day applications for conflicting marks – As with the current rules, the Draft Regulations provide that in the event that two parties apply for the same or similar mark in the same or similar class on the same day, the applicants shall submit prior use evidence within 30 days or attempt to resolve the matter through negotiation. However, the Draft Regulations still fail to address the situation where an application is allowed for registration after submission of prior use evidence whilst the other same day conflicting application fails but is subsequently allowed for registration by TRAB upon review.
7. Amendment/clarification – If amendment to or clarification of the trademark application is required, the applicant needs to attend to this within 15 days upon receipt of the notification issued by CTMO.
8. Partial acceptance – The applicant will be free to apply to split the application within 15 days upon receipt of the partial acceptance notification issued by CTMO. Currently, the applicant only has the options of abandoning the refused goods/services or applying to TRAB for a review of the CTMO’s decision.
9. Opposition – The period of filing supplemental evidence is changed from three months to 30 days after filing the opposition. If the opposition is filed in respect of some of the designated goods/services only, the applicant is allowed to apply to split its application within 15 days upon receipt of the Ground of Opposition from CTMO, hence allowing the mark to proceed to registration in respect of the unopposed goods/ services. Likewise, if CTMO issues an opposition decision refusing to register the mark in respect of some of the goods/services only, the applicant can also apply for a split.
10. Assignment – Under the Draft Regulations, assignment recordal is no longer the duty of the assignee only. Both assignor and assignee are jointly responsible for recording the trademark assignment. The Draft Regulations expressly provide that if a mark ownership is transferred due to succession or enforcement of judicial decisions (other than by way of assignment), the transfer will be gazetted upon approval and the transfer will take effect on the date of gazettal.
11. License recordal – Under the current practice, a trademark license has to be recorded with CTMO within three months upon signing. Currently, however, neither the law nor the rules provide for the consequence for failing to do so. In practice, CTMO still processes the license recordal applications so long as they have been filed within a year upon signing. The Draft Regulations, however, expressly provide that CTMO will not process license recordal applications filed out of time; and though failure to record a trademark license does not affect its validity, it cannot be enforced against a third party acting in good faith.
12. Pledge or charge – For any pledge or charge over PRC registered trademarks, the parties should enter into an agreement and jointly record such pledge or charge with CTMO, which will gazette the same.
13. Non-use cancellation – The Draft Regulations expressly provide four exceptions to non-use cancellation, namely (i) force majeure; (ii) government’s restrictions on use; (iii) non-use due to bankruptcy; and (iv) other justifications for non-use for which the mark owner shall not be responsible.
14. TRAB proceedings – For a filing with TRAB, the party may be required to amend before TRAB accepts the case and must make the necessary amendment within 15 days upon receipt of the notification from TRAB (instead of 30 days under the current practice). Supplemental evidence at TRAB level has to be filed within 30 days upon filing the application or response (instead of three months under the current practice). As in the CTMO opposition proceedings, the applicant is allowed to apply for a split of its trademark application upon a partial successful review at TRAB.
15. Facilitating infringement – Under the old rules, intentionally mailing or concealing, or providing storage or transport for the purpose of infringing others’ trade mark rights are considered as facilitating infringement. The ‘facilitating infringement’ provision has now been put in the new Trademark Law, and the Draft Regulations add that the provision of premises or internet services would also fall under the ‘facilitating infringement’ provision.
16. AIC administrative raid – The Draft Regulations elaborate on what should be considered ‘repeat infringers’, and on serious circumstances which attract more severe penalties. They also elaborate on how retailers (without knowledge) can limit their infringement liabilities by adducing the purchase contract entered into with the supplier, the relevant purchase invoice or the product list and payment receipt bearing the supplier’s company chop, etc. The Draft Regulations expressly add that a trademark owner or its authorized representative has the duty to assist the AIC investigation and issue the verification affidavit upon examining the suspected infringing goods, covering the examiner’s name, the verification methods, the examination process, the findings, etc. Having said that, in the event that the suspected infringing goods are found in manufacturing or processing factories and the factory operators cannot show proof of authorization, no verification is required.
17. Trademark agents’ practices - The Draft Regulations expressly set out the qualifications of a Trademark Agent and a Trademark Attorney, and explain what would constitute an unfair interruption of the market order of the trademark agent industry, namely: soliciting business through false promotion, submitting false evidence, concealing facts, knowingly accepting instructions on bad faith matters, accepting instructions irrespective of conflict of interests, engaging in trademark squatting activities itself or on behalf of others, or adopting illegal means to resolve disputes or interrupt the examination of trademark cases or adjudication which disturbs the public order or threatens the public security.
At the time of writing this article, the Chinese authorities are still consulting different stakeholders about the proposed amendments made in the Draft Regulations and further changes are expected in the coming months.
It is regrettable that the Draft Regulations do not explain whether there is any transitional arrangement for the new Chinese trademark regime – which is one of the key concerns for most trademark practitioners and brand owners.
Will all pending applications, oppositions and cancellations be concluded before the effective date of the new law, i.e., 1 May 2014? Will the old law or the new law apply if an opposition is filed on 30 April 2014? Will the new law apply to a trademark infringement lawsuit filed before 1 May 2014 but heard after the new law takes effect? How the authorities are going to address these issues remains to be seen going forward.” This article may be found on –line at:
This article, and many more newsletters and other types of useful and pertinent information about Chinese law topics and much more can be found on our website at, http://www.lehmanlaw.com/resource-centre/newsletter.html, and elsewhere on our law firm’s comprehensive website, www.lehmanlaw.com.
Hawkeye in China