May 2014

Authored by Arthur X. Dong (dongxiao@anjielaw.com) & Li Meng from AnJie Law Firm

For the last ten years, whether an arbitration clause such as “any disputes arising from, or in connection with, the execution of this agreement shall be resolved by arbitration” may be applied to an infringement claim has been a topic of heated discussion among the legal practitioners in China.  This is a matter of great concern to arbitration practitioners in China because the case history of Supreme People’s Court has failed to clarify whether the courts or the arbitration tribunal should have jurisdiction over the infringement claims. Continue Reading Is an Infringement Claim within the Scope of Arbitration Clause under Laws of PRC?

Authored by He Jing, AnJie Law Firm and Jerry Xia, Honeywell China

While some feel that damages awards in China are still insufficient, recent cases show that the courts are becoming much more sophisticated in calculating damages and awards are increasing – especially in cases of wilful infringement

China’s newly amended Trademark Law is due to come into effect on May 1 2014.  One of the most significant changes for many brand owners and trademark professionals will be the increase in damages in trademark infringement cases. The law will raise the amount of statutory damages to Rmb3 million – almost six times the previous limit. It will also recognise punitive damages and ease the burden of proof for brand owners in establishing damages. Continue Reading Chinese courts ratchet up damages awards for wilful infringement

Authored by Dr. Zhan Hao and Dr. Song Ying

Following the antitrust watchdog in Germany, Japan, Taiwan and the United States, the Ministry of Commerce of the People’s Republic of China (MOFCOM) conditionally cleared Merck KGaA’s (Merck) acquisition of AZ Electronic Materials S.A. (AZ Electronics) on April 30, 2014. It means that Merck has won the last pass it needed to wrap up the takeover.

As the world’s oldest chemical and pharmaceutical company, Merck was founded in Darmstadt in 1668. The company was privately owned until going public in 1995. The Merck family, however, still controls a majority (roughly 70%) of the company’s shares. Continue Reading Last Hurdle for Merck’s Acquisition of AZ Electronics Removed: MOFCOM’s 23rd Conditional Clearance

Authored by Dr. Zhan Hao and Dr. Annie Xue

clevel play ground, optimizing industry structure, promoting competitiveness, and enriching the risk management tool kit of the insurance institutes”, quoting a statement of CIRC posted on its website. [1]

Promotion of Competition

CIRC’s partially relaxed mergers and acquisition rules in the insurance sector are expected to help facilitate market entry and expand the footprint of private capital, including the domestic and China-based foreign-funded insurance firms.Continue Reading China Issues New Insurance Merger Rules

Authored by Dr. Zhan Hao and Dr. Annie Xue

China has seen another far-reaching step towards deregulating the strictly regulated telecommunication sector.

On May 9, 2014, the Ministry of Industry and Information Technology of the P.R.C. (MIIT) and the National Development and Reform Commission (NDRC) jointly issued a notice announcing liberalizing pricing of the telecommunication services (Notice). [1] This policy has come into force on May 10, 2014.

Backdrop

The price liberalization in the telecommunication sector comes when the ruling party vows to comprehensively deepen the reform and looks to the market as the essential price-setting mechanism. And the Notice is an execution of the State Council’s Decision on Removing and Delegating Some Items Requiring Administrative Approval, [2] which was promulgated on January 28, 2014.Continue Reading China Deregulates Pricing in Telecommunication Sector

Authored by Michael Gu and Shuitian Yu

Introduction

On April 30, 2014, China’s Ministry of Commerce (“MOFCOM”) granted a conditional clearance on the proposed $3.1 billion acquisition of London-listed AZ Electronic Materials S.A. (“AZ”) by Merck KGaA (“Merck”) in accordance with the Anti-Monopoly Law. AZ is a special chemical material supplier to the electronics industry, and Merck is a leading company engaging in the production and sales of biopharmaceutical, life science instruments and specialty chemicals. MOFCOM imposed following behavioral conditions that are binding for three years: (1) Merck shall not engage in tying of its product and AZ’s product, (2) when licensing its patents on liquid display crystals based on non-exclusive and no-sublicensing terms, all the terms should be reasonable and non-discriminatory, and (3) any licensing of liquid display crystals related patents by the combined company shall be reported to MOFCOM in advance.Continue Reading MOFCOM Raised Specific Concerns over Adjacent Markets in Its Merger Review – Brief Analysis on Merck’s acquisition of AZ Electronic Materials

Authored by Michael Gu and Shuitian Yu

Introduction

The Ministry of Commerce (“MOFCOM”) finally published the Guiding Opinions on Notification of Simple Cases of Concentration of Undertakings (the “Guiding Opinions”) on 18 April 2014, two months after the Interim Provisions on Standards Applied to Simple Cases of Concentration of Undertakings (the “Interim Provisions”), which were released in February this year. The purpose of the Interim Provisions is to reduce heavy workload for both MOFCOM and the notifying undertakings and to accelerate the review process. However, the Interim Provisions mainly set out the eligibility criteria for simple cases entitled to the simplified procedure and provide no guidance on the specific procedural issues. The issuance of Guiding Opinions signals the formal implementation of the simplified merger review procedure. The Guiding Opinions clarify certain practical issues in relation to the “simple case” review such as the requirements for submission of documents, consequence of the identification of “simple case” status, the timeline for deciding on “simple case” status. According to the Guiding Opinions, the filing parties’ load of paperwork will be significantly reduced compared with that under the normal review procedure. Nevertheless, the status of “simple case” does not necessarily guarantee a “phase one clearance”. Parties to the concentration shall be cautions in using such so-called “fast track” mechanism and be aware of the potential risk of longer notification process resulting from revocation of “simple case” status. Continue Reading At Last, MOFCOM Formally Adopted Simplified Merger Review Procedur

Authored by Arthur Dong

On April 8, 2014, the China (Shanghai) Pilot Free Trade Zone Arbitration Rules (the “New Rules”), which will take effect on May 1, 2014, was unveiled to the public. It is the first arbitration rules for a China’s Free Trade Zone (“FTZ”) with the purpose of speeding up commercial arbitrations to those at the international level. This article aims to discuss several unique characteristics of the New Rules. 

I. Applicability of the Rules    

Article 3.1 provides that the Pilot Free Trade Zone Arbitration Rules shall apply if: 1) the parties have agreed  to select SHIAC (“Shanghai International Arbitration Center” or “Shanghai International Economic and Trade Arbitration Commission”) as the forum for arbitration without stipulating the arbitration rules; and 2) any of the following connections exists, including 1) the parties, 2) the subject matter to a dispute, or 3) the legal facts that lead to the establishment, change, and termination of a civil and commercial relationship. Continue Reading Ten Highlights of the China (Shanghai) Pilot Free Trade Zone Arbitration Rules