The Coming Golden Age: Eight Highlights of the Film Industry Promotion Law

 Authored by Michael Gu (michaelgu@anjielaw.com) and Sun Sihui (sunsihui@anjielaw.com) at AnJie Law Firm

Background

After a long wait, the Film Industry Promotion Law of the People’s Republic of China (“Film Industry Promotion Law) was finally adopted by the Standing Committee of the National People’s Congress (NPC Standing Committee) on November 7, 2016. It will enter into force on March 1, 2017. The Film Industry Promotion Law will form a fundamental legal foundation for the film industry. Therefore, its promulgation has more than simply symbolic significance. Preparation for the law began as early as the 1980s. Nonetheless, the first draft for soliciting opinions was released on December 15, 2011. The past five years witnessed three rounds of deliberation by the NPC Standing Committee. The Film Industry Promotion Law encompasses all manner of production in the film industry, from film creation, to production, through distribution, and finally to movie screening. With the rapid development of its film industry, China has become the second largest film market in the world. However, China’s film industry still faces particular problems, including unitary themes, a deficit of originality, mediocre quality, lackluster production values, and even box office fraud. The Film Industry Promotion Law streamlines administration so as to stimulate creativity in the film market. It also aims to strengthen regulations prohibiting irregular practices in the film industry and provide powerful legal protections for film development. As the first law of China directly covering the cultural sector, the Film Industry Promotion Law will have long-term and profound influences on the development of cultural industries.  This article will summarize and interpret eight highlights of the Film Industry Promotion Law with close relation to practitioners of the film industry from a practical point of view. 

Read more...

A Review of China's Reforms to FDI Administration Regime in 2016

  Authored by Simon Li (lixiameng@anjielaw.com) and Bo Hu (hubo@anjielaw.com) at AnJie Law Firm

Over the Year 2016, the Chinese government has overhauled its regime of administration over foreign direct investment (“FDI”) by promulgating a series of amendments to laws and new regulations to introduce a record-filing process to replace the pre-approval process, and to shift its focus from pre-approval to post-filing supervision. The new FDI administration regime simplifies administrative formalities and establishes a more efficient system for FDI. It will certainly bring significant and positive influences on foreign investors who plan to invest in China as well as those who are now operating businesses in China through foreign invested enterprises (“FIE”). This article will review those noteworthy changes brought by the new FDI administration regime.   

Read more...

Enterprises in China's Free Trade Zones Enter 2017 with New Options for Arbitration

Authored by Arthur Dong (dongxiao@anjielaw.com) and Darren Mayberry (darren.mayberry@anjielaw.comat AnJie Law Firm

A recent Supreme People's Court Opinions has created a stir in China's international arbitration community. The Opinions were dated on December 30, 2016 and cover an array of matters relating to legal measures to expedite the development of Free Trade Zones.  Among other matters, the SPC sought to open the Free Trade Zones to further options regarding alternative dispute resolution. The great interest from the arbitration community stems almost entirely from the remarks made in Article 9. The SPC has effectively designated as Foreign Per Se any Wholly Foreign-Owned Enterprises which are registered in one of 11 current Free-Trade Zones. What amounts to a seemingly technical classification actually heralds a transformation of real significance. In three brief paragraphs, the SPC seems to have shifted the landscape for China-based arbitrations. The Opinions offer little tangible or immediate benefit to Chinese arbitration users. Although the immediate practical significance of the Opinions may remain humble and limited, it will have two notable effects. The world arbitration community will welcome the increased deference and jurisdictional purview the SPC meaningfully presents to foreign tribunals. Chinese businesses and arbitration professionals may recall this moment as the initial beginning for ad hoc arbitration in China.     

This note will review background distinctions between institutional and ad hoc arbitration and visit the necessity for arbitral institutions under Chinese arbitration agreements. It will also examine the foreign-element requirement necessary to escape the Chinese arbitral institution requirement, while reminding that all China-registered enterprises are Chinese. After summarizing the landscape ahead of the Opinions, the note will then look at the substance of the Opinions. This note then proceeds to analyze the new Foreign Per Se classification. It will subsequently consider practical implications and the possible reception from various interested parties and organizations towards the Opinions. Before it concludes, this note will pose some open questions and make attempts at provisional answers and recommendations.

 

Read more....

Tetra Pak Receives SAIC's Severest Antitrust Penalty

Authored by Michael Gu (michaelgu@anjielaw.com) and Sun Sihui (sunsihui@anjielaw.com) at AnJie Law Firm

Introduction

On November 9 2016, after a nearly five-year investigation, the State Administration for Industry and Commerce (SAIC) finally concluded the Tetra Pak case. The SAIC's landmark decision:

  • imposed a Rmb667,724,176.88 (approximately $97 million) penalty on Tetra Pak – equivalent to 7% of the Swiss packaging giant's 2011 China sales – for its abuse of a dominant position in China; and
  • ordered Tetra Pak to cease its illegal conduct.

Read more...

A New Reform for a Very New Year of International Arbitration and Third-Party Funding in Singapore

 Authored by Arthur Dong (dongxiao@anjielaw.com) and Darren Mayberry (darren.mayberry@anjielaw.comat AnJie Law Firm

On January 10, 2017, Singapore enacted yet another landmark legal reform, renewing its status as a leading seat for international arbitration. Singapore has completely abolished the torts of maintenance and champerty. This will allow parties to international arbitration to engage attorneys on a contingency fee basis. In addition, Singapore has expressly declared that third-party funding agreements are neither illegal nor contrary to public policy. Third-party funding arrangements allow parties to borrow money from certified lenders to pay their lawyers or experts in advance, but at the cost of a significant portion of the expected recovery. Once the reform comes into effect, the changes will further solidify its status as international arbitration hub. 

Here we restate the objectives of Singapore's Civil Law Amendment Bill, after which we examine the effect of the bill on contingency fee arrangements. We explore comparisons with other jurisdictions throughout. We will also address the most remarkable effect of the Civil Law Bill, Singapore's resounding affirmation of third-party funding. We then examine the framework under which the Civil Law Act will soon delegate its regulation of third-party funding to the Ministry of Law.  

Read more....

China Purports to Adopt New Measures to Boost Foreign Investment in 2017

 Authored by Bo Hu (hubo@anjielaw.com) and Simon Li (lixiameng@anjielaw.com) at AnJie Law Firm

Since September of 2016, the Chinese government has adopted a series of measures to reshape its FDI regime, signaling its determination to strengthen efforts to attract more foreign investments in the coming years. As a significant move, the State Council passed the Circular on Measures for Further Opening Up and Active Use of Foreign Investment (the “Circular”) on December 28, 2016, which purports to further relax the curbs on foreign investment to boost the economic transformation and industries upgrading and transfer in order to adapt to the new domestic and abroad economic situation. The text of the Circular will be officially released to the public shortly. But in a recent press briefing of the State Council, some highlights of the Circular have been revealed. According to the highlights revealed in the press briefing, the Circular lays foundation for the future foreign investment policies in the following aspects: 

Read more...

At the Cutting Edge of PRC AML Private Litigation

 Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Song Ying (songying@anjielaw.com) at AnJie Law Firm

 

I. INTRODUCTION 

On August 1, 2008, China launched the Anti-Monopoly Law (“AML”), establishing a dual enforcement system comprising both public and civil enforcement measures. Article 50 of the AML provides the legal basis for private anti-monopoly enforcement and states that undertakings that violate the provisions of the AML and cause damage to others shall bear civil liability.

In contrast to the activity surrounding public enforcement cases, China’s private antitrust enforcement regime remained relatively quiet during its first four years. From 2008 to 2012, a total of 143 cases concerning monopolistic conducts were accepted by the courts. Since then, however, an increasing level of private antitrust enforcement action in China, accompanied by some high-profile cases, has prompted an increased level of attention and scrutiny. Over the last four years to date, more than 300 antitrust cases have been brought before the courts. Considering that China as a jurisdiction has not traditionally hosted a competition or pro-litigation culture, these statistics are surprising to everyone, even within Chinese competition circles.

Generally speaking, Chinese courts are still at an early stage in implementing the AML.

Nevertheless, they have garnered a great deal of experience in the intervening eight years since implementation began, and are now stepping up the pace. This is evidenced by the advent of several landmark cases addressing increasingly more complicated facets of competition law, such as two-sided markets, Standard Essential Patents (“SEPs”),  resale price maintenance, refusal to deal and essential facilities.

Click Here to read more

THE LIMITATION OF "ACCESSORY PRINCIPAL" IN THE CONTEXT OF SURETY BONDS

Authored by Dr. Zhan Hao (zhanhao@anjielaw.com) and Wan Jia (wanjia@anjielaw.com) at AnJie Law Firm

The surety bond market has developed significantly for insurers in China since this year, and it has become one of the most important methods for financial guarantee. Due to the lack of clear judicial interpretations issued by the Supreme Court of PRC, however, the applicable laws pertaining to surety bonds issued by insurers in China, and their nature, are still highly controversial. This article seeks to analyze the very specific question of whether the “accessory principal” prescribed by the Guarantee Law of PRC, is applicable to surety bonds issued by the insurers in China. 

 
Click Here to read more

 

When the Arbitration Clause Leaves the Number of Arbitrators Implied

 Authored by Arthur Dong (dongxiao@anjielaw.com) and Darren Mayberry (darren.mayberry@anjielaw.comat AnJie Law Firm                                                             

 

What happens when the parties to a contract have chosen an arbitration institution, but not specified the number of arbitrators to resolve the dispute? In effect, the parties have already chosen the number of arbitrators, because arbitration institutions have provisions for choosing the number of arbitrators when the arbitration clause is silent. If the parties adopted a summary/expedited procedure, they have elected a single arbitrator.

Institutions take varied positions on the implied number of arbitrators assigned to a tribunal. All authorities agree that the choice is only between one and three arbitrators. 

The graph below displays the positions taken by the rules of four institutions, CIETAC, BAC, SIAC, and HKIAC, as well as the UNCITRAL rules. The implied number of arbitrators are given, and whether the determinate implication of number is presumptive or firm is indicated. Note that the implied number below do not reflect separate and distinct Summary/Expedited Procedures.

China Highly Likely to Recognize SIAC Awards Based on Early Dismissal

Authored by Arthur Dong (dongxiao@anjielaw.com) and Darren Mayberry (darren.mayberry@anjielaw.comat AnJie Law Firm                                                             

 On October 27, 2016, the Singapore International Arbitration Centre (SIAC) held its annual China Roadshow in Shanghai. SIAC is a premier global arbitration forum and institution that caters particularly to Chinese, Indian, and other ASEAN legal users. The initial panel included arbitration luminaries such as Chan Hock Seng, Steven Lim, John Zou, SIAC’s Deputy Registrar Kevin Nash, and AnJie Law Firm Partner and specialist on arbitration enforcement Arthur Dong. 

SIAC’s China Head, Sophia Feng, convened the distinguished panel to discuss SIAC’s innovations in its 2016 Rules, particularly its bold Early Dismissal provision. Rule 29 permits the Tribunal to dismiss claims or defenses which are “manifestly” either “without legal merit” or “outside the jurisdiction of the Tribunal.” Drawn from ICSID, SIAC is nonetheless the first arbitration institution to enact an Early (or Summary) Dismissal provision in its commercial arbitration institutional rules. 

The other panelists eagerly requested Arthur’s professional outlook on whether Chinese courts would be willing to recognize an Award anchored in a resolution by Early Dismissal. In short, Arthur is optimistic. Arthur noted that China is a signatory to the New York Convention. As such, China takes its obligations to enforce foreign Awards very seriously. Arthur reminded that China has a strong track record on enforcement. Furthermore, China will avoid delving into the substantive merits underlying any arbitration Award. Chinese courts respect that the Tribunal’s Award is the last word on the application of the facts to the law in any arbitration. Therefore,  Chinese courts will respect Awards where the Early Dismissal provision had a major impact.

The distinguished panelists considered enforcement issues globally. Although summary judgment features prominently in common law jurisdictions, particularly in the United States, civil law countries rarely exhibit any examples of such an early dismissal device. The panelists considered the danger of Early Dismissal in light of the New York Convention’s requirement that parties be afforded a “fair opportunity to present their cases.” Reassurance came, at least to an extent, by attention to the limiting language of Early Dismissal: the remedy of dismissal could only apply to matters of pure law or jurisdiction, and the standard required “manifest” burden. Any admixture of fact and law would require treatment of the issue under a full hearing. There was some concern about the vagueness of what might prove ‘manifest.’

In any case, SIAC Deputy Registrar Kevin Nash anticipates that few resolutions of the Early Dismissal procedure would entirely dispose of any matter, except perhaps when jurisdiction or legal grounds were facially and clearly wrong. This expectation appears sound. Early Dismissal was designed to narrow the issues before the hearing. As such, it would prove an absolute bar to only the most frivolous or mistaken claims. 

In addition to Early Dismissal, the panel discussed the Emergency Arbitrator provision. Arthur Dong pointed out that these will be useful to China-based users. Normally, interim measures are unavailable in China, unless the host institution is also based in China. Therefore, the breadth and scope of SIAC’s Emergency Arbitrator provisions may allow China-based users to accomplish what they otherwise might not through interim measures. 

Overall, Arthur Dong remains optimistic that Chinese courts will respect and enforce SIAC Awards, even when they rely on innovations under SIAC’s 2016 Rules.