23 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA language skills and international vision still apply in the Middle East. “Large corporate clients’ projects in the Middle East still follow the same international standards. It is most important for lawyers to have experience in dealing with complex cross-border legal issues, and this experience can help them adapt to different cultures.” Ma tells ALB that as a firm founded in Yinchuan, Ningxia, Ning Ren hopes to actively promote the development of Middle East business by leveraging the closeness between Ningxia and Arab countries in terms of language, religion, culture and economic and trade ties, and make the Middle East a signature service offering of the firm. “Ningxia is the permanent venue for the China-Arab States Expo. We have very close political, economic and trade ties with the Arab world. In addition, Ningxia has trained a batch of service agencies and lawyers that are more compatible with the Middle East in terms of culture and language. Further, Ning Ren itself has made substantial investment in young talents over recent years, attracting and cultivating a large number of outstanding young lawyers capable of providing cross-border services.” At present, Ning Ren plans to work with local firms in the Middle East to jointly develop business, and send three to five Chinese lawyers to Saudi Arabia to provide long-term services to Chinese companies with local partner firms. “We plan to open an office in Saudi Arabia within five years and continue to invest in the local market,” says Ma. To firms interested in exploring Middle Eastern business, Ma has some advice. “First, Chinese firms should engage in more visits and exchanges to understand local economic, social and cultural developments and form synergies with local firms with greater professional capabilities. Second, Chinese firms must strictly abide by local laws and regulations, fully identify local political and economic and trade connections, find the right people and take the right path. Third, it will take a long time for Chinese firms to invest resources in the Middle East, which requires patience and long-term commitment.” professional service providers we deal with are very international and modern. On the other hand, as predominantly Muslim region, religion impacts all aspects of social life in the Middle East, including taxation, holidays, etc.” As the number of Chinese clients interested in investing in Saudi Arabia increases, Jia reminds companies to pay special attention to complying with local Islamic law, the Sharia law. “Sometimes, foreign court judgments or arbitral awards cannot be enforced in Saudi Arabia because they violate Sharia law. The most typical example is that the word ‘interest’ cannot appear in a judgment or award.” In a case that Jia is involved in this year, he successfully represented a Chinese company in obtaining recognition and enforcement of a RMB 240 million arbitral award of the China International Economic and Trade Arbitration Commission before the Saudi enforcement court, signaling that Chinese arbitral awards have withstood the test of Sharia law. This case also provides a template for arbitration institutions and counsel to familiarize themselves with the prohibitive and mandatory provisions of Islamic law during case hearing and representation, and to prepare in advance to reduce the risks of non-enforcement in the future. OPPORTUNITIES AND CHALLENGES With the rising enthusiasm of Chinese companies to the Middle East come the plans of Chinese firms to accompany their clients to the region. Since the beginning of this year, many firms have engaged in frequent exchanges and visits with their counterparts in the Middle East to explore different ways to partner each other. However, while actively embracing new business opportunities, Chinese firms also face many challenges. DeHeng is one of the earliest domestic firms to set up presence in the Middle East by way of direct investment. Jia admits that this model is still relatively rare until nowadays. Summarizing the experience of two decades of successful operation, Jia highlights two points, being “localization and internationalization”. In terms of localization, half of Jia’s team is based in Beijing while the other half is in Dubai, and the Middle East office has Arab partners to provide local legal services. Client business is handled by this cross-border team based on division of tasks “rather than based on Chinese lawyers acting as middlemen to subcontract business to local lawyers because we believe subcontracting will not last long”. In terms of internationalization, thanks to Dubai’s status as a global platform for engineering work, “our business started in Dubai and gradually expanded to the GCC countries. It now covers more than 50 countries around the world. Internationalization and localization must be combined. We must boast both internationallyrenowned professional competency and local service capabilities.” Hou shares with ALB that Zhong Lun has not opened an office in the Middle East yet and mainly provides services by working with local partners. Zhong Lun is a member firm of the World Law Group (WLG) in China, and this membership helps it connect with leading local firms such as Al Tamimi in Saudi Arabia. In addition, Zhong Lun can also choose a suitable local partner based on the specific circumstances of a client’s project. As to whether it is particularly challenging to find a partner firm in the Middle East, Hou says that the challenges mainly lie in the fees and charging models of local lawyers. “Chinese clients are very price sensitive and have requirements for discounts and fixed fees, but these are difficult to achieve in the Middle East. Sometimes we also scratch our heads. On the one hand, Chinese lawyers face fierce competition at home and have to provide clients with flexible fee arrangements. On the other hand, our local partners only accept hourly rates or even demand prepayment. This requires Zhong Lun to rely on the partnership of deep trust built over the years to strive for some possibilities for flexible fee arrangement.” In addition, the usual requirements on Chinese lawyers in complex cross-border transactions in terms of OUTBOUND INVESTMENT
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