MCI (P) 003/02/2023 issn 0219 – 6875 KDN PPS 1867/10/2015(025605) THE BEST FIRMS FOR DEAL WORK IN THE REGION LEADING TMT LAWYERS THAILAND SEES REBOUND GC ROUNDTABLE: PHARMA
OVERVIEW Asian Legal Business is proud to be back for the ALB Indonesia In-House Legal Summit this 25 October 2023 in Jakarta. This signature event is tailored to bring together leading senior-level corporate counsel, business leaders and private practice lawyers. At the summit you will get an opportunity to interact with the most brilliant minds in the region and keep up-to-date with Indonesia’s emerging legal landscape. TOPIC HIGHLIGHTS • Indonesia Legal Landscape - An Overview • Dispute resolution and Mediation in the Digital Age - Shifting the Paradigm • The Rise of Indonesia’s Workplace Harassment - Spotlight • Competition Regulations in Indonesia - Latest Insights • Indonesia’s PDP Law & Cybersecurity - A year in Review • Data Governance: Mitigating Compliance Risks through Effective Management • Sustainability, Climate Change & Net Zero - ESG Focus • Disruptive Digital Transformation: How to Create Efficiencies and Manage Risks by Designing an Automated Contract Workflow • Journey towards efficiency in corporate legal work FOR SPONSORSHIP OPPORTUNITIES, PLEASE CONTACT: Amantha Chia amantha.chia@tr.com / (65) 6973 8258 FOR SPEAKING OPPORTUNITIES, PLEASE CONTACT: Nafilah Noor nafilah.noor@tr.com / (65) 6973 8921 FOR MORE INFORMATION, KINDLY VISIT www.legalbusinessonline.com/ihs/indoihls2023 PROUDLY PRESENTED BY 25 OCTOBER - PULLMAN JAKARTA INDONESIA THAMRIN CBD ALB INDONESIA IN-HOUSE LEGAL SUMMIT 2023 PRESENTING SPONSORS PANEL SPONSORS Photos from live event that took place in Indonesia In-House Legal Summit 2022 on 19 October at Shangri-la Jakarta
1 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM COVER STORY 16 ALB Asia M&A Rankings 2023 In its annual Asia M&A Rankings, ALB spotlights the leading law firms for M&A work, shedding light on the top players driving the region’s most impactful and intricate deals. FEATURES 12 From Russia, with work Russians have been moving their business and dispute resolution to Asia for over a decade, but new sanctions following the invasion of Ukraine has significantly hastened that process. Dispute resolution hubs like Singapore, Hong Kong and Tokyo are increasingly attracting Russian businesses following the implementation of Western sanctions, and that trend is set to continue as the conflict drags on. 24 Moving the needle The role of general counsel at pharmaceutical and healthcare companies has become increasingly complex. GCs today must possess a diverse skill set that stretches far beyond legal expertise. 28 ALB Thailand Rising Stars 2023 In its inaugural list, ALB introduces the emerging legal practitioners in Thailand’s new era. These practitioners have demonstrated great potential in the industry and have received high praise from their clients. 30 Better days ahead After a slow start to Thailand’s dealmaking scene in 2023, M&A activities are expected to tick up in the second half of the year. But lawyers say that companies need to navigate not just tight monetary conditions and heightened geopolitical risks, but also a murky political situation in Thailand. Plus: - Chandler MHM 32 ALB Asia Top 15 TMT Lawyers 2023 ALB honours the top technology, media, and telecommunications (TMT) lawyers across Asia who have powered through the pandemic, continuing to grow their practices at a remarkable pace while adapting to new markets, disruptive technology and ever-changing regulatory regimes. Plus: - Drew & Napier 34 A new regime India recently passed a wide-ranging data protection law. Lawyers share what companies need to do to keep up. 36 Moving forward on ESG Environmental, social and governance (ESG) considerations are essential to businesses for the opportunities they bring, and for the reputational and economic risks that arise from making the wrong decisions. In light of the growing interest and scrutiny in ESG matters from within Japan and abroad, the Japanese government has been pushing a range of measures to implement ESG initiatives. BRI EFS 3 The Briefing 4 Forum 5 Deals 7 Explainer 8 Appointments 11 Q&A CONTENTS 30 Better days ahead Image: pisitnamtasaeng/Shutterstock.com
2 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM Asian Legal Business is available by subscription. Please visit www.legalbusinessonline.com for details. Asian Legal Business has an audited average circulation of 11,402 as of 30 September 2016.Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Asian Legal Business can accept no responsibility for loss. MCI (P) 003/02/2023 issn 0219 – 6875 KDN PPS 1867/10/2015(025605) Thomson Reuters 18 Science Park Drive Singapore 118229 / T (65) 6775 5088 / F (65) 6333 0900 10/F, Cityplaza 3, Taikoo Shing, Hong Kong / T (852) 3762 3269 www.thomsonreuters.com Navigating choppy waters In the ever-evolving world of mergers and acquisitions, the landscape can be as unpredictable as a tempestuous sea. In the current issue of ALB Asia, we proudly present our annual ranking of the top M&A law firms in the region. This year, more than ever, our ranking serves as a tribute to the legal luminaries who have deftly steered their clients through the stormy waters of dealmaking in a remarkably challenging environment. 2023 has indeed been a year unlike any other in recent memory. The global economic climate has been marked by uncertainty, with geopolitical tensions, supply chain disruptions, and the ongoing effects of the pandemic casting a shadow of unpredictability over the business world. In such turbulent seas, M&A activity has seen a slowdown, making each deal all the more precious and each legal strategist all the more essential. Our ranking seeks to shine a spotlight on those law firms and their dedicated teams who have risen to the occasion, demonstrating resilience, adaptability, and unwavering commitment to their clients. Whether facilitating cross-border transactions, advising on regulatory intricacies, or negotiating complex agreements, these legal professionals have showcased exceptional prowess in turning challenges into opportunities. While the volume of deals may have decreased, the significance of the ones that do transpire is magnified. The lawyers and law firms featured in this year’s ranking have proven themselves as true captains of the M&A world, guiding their clients’ ships safely to their destinations amid choppy seas. As we navigate these uncertain times together, we commend the top M&A law firms for their unwavering commitment to their clients and for helping to shape the future of business in Asia. We hope that this issue inspires and informs, providing valuable perspectives on the M&A landscape in the year that has tested us all. RANAJIT DAM Managing Editor, Asian Legal Business, Thomson Reuters HEAD OF LEGAL MEDIA BUSINESS, ASIA & EMERGING MARKETS Amantha Chia amantha.chia@thomsonreuters.com MANAGING EDITOR Ranajit Dam ranajit.dam@thomsonreuters.com ASIA JOURNALIST Sarah Wong sarah.wong@thomsonreuters.com ASIA WRITER Nimitt Dixit nimitt.dixit@thomsonreuters.com RANKINGS AND SPECIAL PROJECTS EDITOR Wang Bingqing bingqing.wang@thomsonreuters.com COPY & WEB EDITOR Rowena Muniz rowena.muniz@thomsonreuters.com SENIOR DESIGNER John Agra john.agra@thomsonreuters.com TRAFFIC/CIRCULATION MANAGER Rozidah Jambari rozidah.jambari@thomsonreuters.com SALES MANAGERS Hiroshi Kaneko Japan (81) 3 4520 1192 hiroshi.kaneko@thomsonreuters.com Jonathan Yap Indonesia, Singapore (65) 6973 8914 jonathan.yap@thomsonreuters.com Krupa Dalal India, Middle East, Singapore (91) 22 6189 7087 krupa.dalal@thomsonreuters.com Romulus Tham Southeast Asia (65) 6973 8248 romulus.tham@thomsonreuters.com Steffi Yang South and West China (86) 010 5669 2041 qifan.yang@thomsonreuters.com Steven Zhao China Key Accounts (86) 10 6627 1360 s.zhao@thomsonreuters.com Yvonne Cheung China Key Accounts, Hong Kong and Korea (852) 2847 2003 yvonne.cheung@thomsonreuters.com SENIOR EVENTS MANAGER Julian Chiew julian.chiew@thomsonreuters.com SENIOR EVENTS MANAGER, AWARDS Tracy Li tracy.li@thomsonreuters.com
3 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM THE BRIEFING: YOUR MONTHLY NEED-TO-KNOW U.S. LAW FIRMS SAW Average total compensation for GCs at U.S. public life sciences companies with more $10 billion in revenue last year, according to BarkerGilmore. The figure for those in private companies was $838,000. RISING DEMAND IN Q2 (Reuters) A survey of more than 1,200 individuals working internationally has found that 67 percent of respondents believe AI will have a transformational or high impact on their profession in the next five years, according to Thomson Reuters’ Future of Professionals Report. Additionally, over half of the survey respondents (66 percent) predict AI will create new professional career paths, while 68 percent expect roles that do not require traditional legal or tax qualifications to increase over the next five years. For legal professionals, improved productivity and efficiency are seen as the biggest positive effects of AI (75 percent and 67 percent, respectively). Additionally, law firms see AI as an opportunity for increased revenue as more than half (55 percent) of legal professionals predicted that lower costs for firms, resulting from AI use, will lead to greater firm profitability. Also, 81 percent of legal respondents expect new services to emerge within the next five years, creating new revenue sources. Some 58 percent of respondents anticipate seeing a rise in professional skills. $2,000,000 91% - Percentage of in-house lawyers who expect law firms to make them aware of the firms’ use of emerging AI, according to a survey of in-house counsel in U.S., UK, Canada, and France conducted by LexisNexis. An existing pilot scheme that enables legal practitioners in Hong Kong and Macau to practice in neighbouring mainland cities has been extended for three years. The programme, introduced in 2020, will now run until October 2026. IN THE NEWS IN THE NEWS DLA Piper has launched Aiscension Bribery, an AI-enabled service for detecting corporate bribery risks in partnership with software provider, Reveal. Lawyers from the firm trained the software to recognise various forms of bribery behaviour. “LET’S SEE IF SINGER CAN ACTUALLY TRY A CASE IN A COURTROOM INSTEAD OF THE MEDIA.” QUOTE UNQUOTE (Reuters) Law firms in China are scrambling to comply with Beijing’s new guidance to tone down the language used to describe Chinarelated business risks in companies’ offshore listing documents, five people familiar with the matter said. The moves come after China’s securities regulator in a closed-door meeting asked domestic law firms to refrain from including negative descriptions of China’s policies or its business and legal environment in the IPO prospectuses. A failure to do so could mean their listings are not able to get a regulatory nod, the China Securities Regulatory Commission (CSRC) warned, Reuters had first reported, citing people with knowledge of the matter. The law firms are now racing to change the wordings in applications that they have filed, as well as those they are yet to file. A lawyer for backup dancers of U.S. rapper Lizzo, now facing workplace complaints, hits back at Lizzo’s lawyer Marty Singer’s comments that the dancers’ lawsuit was “a sham.” LAW FIRMS TONE DOWN CHINA RISKS IN IPO APPLICATIONS
4 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS EDDIE LOOK, partner, Tanner De Witt We recognise the evolving demands of our clients in today’s landscape, especially in light of the past three years. At Tanner De Witt, we take pride by adapting to changing needs, offering innovative fee arrangements and payment terms that prioritise transparency and value. Transparency is at the heart of our approach. To address this, we will agree to fixed fee structures for specific services and matters where appropriate. By providing clients with upfront information on costs, we enable them to make better-informed business decisions with greater financial certainty. Alternative fee arrangements have emerged as a key component of our client-centric strategy. We can offer flexible options, where appropriate, such as capped fees and stepped discounts for volume work or blended rates, which all align our interests with those of our clients. This fosters a collaborative relationship and underscores our commitment to achieving the agreed objectives within budget. Our delivery approach is to maximise efficiencies by carefully balancing the involvement between partners and associates when executing tasks, ultimately leading to greater value and cost-effectiveness for our clients. Our billing practices prioritise client engagement and satisfaction by providing detailed monthly billing statements, offering a comprehensive breakdown of services rendered. Our communication is the cornerstone of our client relationships. We maintain open channels of communication, providing regular updates on case progress and addressing client concerns promptly. This approach demonstrates our commitment to keeping clients informed and engaged throughout and helps us to achieve our goal, which is to deliver unparalleled legal services with client satisfaction. CHOOI JING YEN, partner, Eugene Thuraisingam With Singapore relaxing its rules surrounding conditional fee agreements and third-party funding, especially in arbitration-related matters in 2022, clients are demanding more sophistication in fee arrangements. Especially so if they come from jurisdictions where contingency fees have been the norm, in contrast to Singapore’s strict prohibition against the same until recently and only in respect of certain prescribed matters. If requested to do so, a Singapore lawyer would have to consider the regulations very carefully to ensure that the matter in question does fall within the circumscribed exceptions, and that the client is properly and transparently informed in plain language of the various contingencies, some of which can tend to be quite complex. The introduction of new costs guidelines for contentious court matters in 2021 also saw a general uplift in party-and-party costs awards. This is reflective of the inflationary environment in Singapore and also means that solicitor-client costs have been on the general uptrend. This has translated to more requests for deferred payment schemes and even requests for contingency fee arrangements. Unfortunately, the range of matters for which contingency fee arrangements are allowed are still narrowly circumscribed, and to fall foul of this can lead to grave professional consequences. That said, more innovations to fee arrangements are only to be expected and we should see an expansion in the utilisation of conditional fee agreements as well as third party funding in the coming years, FORUM ALL ABOUT THE MONEY In recent years, the traditional pricing arrangement between a law firm and a client has been increasingly challenged by requests for alternative frameworks, while the turbulent economic environment has further squeezed budgets on legal spending. Law firms in Asia share what they have experienced with clients’ demands in fee arrangements and how they are navigating the new dynamics to achieve continued profitability. HAVE YOU SEEN CLIENT DEMANDS WHEN IT COMES TO FEE ARRANGEMENTS AND PAYMENT TERMS EVOLVE IN THE PAST YEAR? HOW ARE YOU ADAPTING TO THE SAME? EDDIE LOOK CHOOI JING YEN ALFRED IP
5 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS especially as the latter continues to be a growing industry service and dispute amounts grow larger. ALFRED IP, founding partner, Hugill & Ip In my experience, clients always expect a high level of certainty for legal services, from the advice that they seek to the price that they pay for the advice. In most of the non-contentious matters, such as drafting and advising on a legal document, experienced lawyers should be able to provide a fee quote and adhere to the same. If there are any unforeseen circumstances leading to an escalation of time spent and change of quotation, they should inform the clients immediately. Clients hate surprises as much as lawyers! This is particularly the case when we are talking about legal services which are highly commoditised, such as will writing (although we have litigated a lot of those wills), when the decision-making process is highly driven by price. To stay competitive, we need to educate our potential clients that we are providing an extra level of services to do a proper job for them, and therefore, our fees may not be the lowest in the market. For some of our legal services that we cannot provide a fixed fee quote, e.g., in contentious legal proceedings, we may consider flexible payment arrangement, taking into account clients’ financial means and resources. In Hong Kong, we cannot enter contingency fee arrangement with our clients, but we can certainly consider payment arrangement such as monthly instalments. We also consider it part of our job to provide a high level of transparency in our billing process and a regular billing cycle for our clients to understand and settle their bills. DEALS $5.5 BLN Arm Holdings’ planned NASDAQ IPO Deal Type: IPO Firms: Sullivan & Cromwell; Morrison & Foerster; Davis Polk & Wardwell Jurisdictions: U.S., UK, Japan $1 BLN Qatar Investment Authority’s acquisition of stake in Reliance Retail Ventures Deal Type: M&A Firms: Cyril Amarchand Mangaldas; AZB & Partners; Cleary Gottlieb Steen & Hamilton Jurisdiction: India, Qatar $936 MLN MUFG’s acquisition of stake in U.S. Bancorp Deal Type: M&A Firm: Sullivan & Cromwell Jurisdictions: U.S., Japan $898 MLN PAG Asia’s acquisition of Australian Venue Co. Holdings from KKR Deal Type: M&A Firms: Ashurst; Allens Jurisdictions: Australia, Hong Kong, New Zealand $567 MLN Growtheum Capital Partners’ debut fund closing Deal Type: Funds Firm: Morrison Foerster Jurisdiction: Singapore $500 MLN LNG Japan’s acquisition of stake in Scarborough LNG project from Woodside Energy Group Deal Type: Projects Firms: Baker Botts; Ashurst Jurisdiction: Australia $467 MLN MUFG Bank’s acquisition of PT Mandala Multifinance Deal Type: M&A Firms: Nishimura & Asahi; Walalangi & Partners Jurisdictions: Indonesia, Japan $150 MLN VNG’s planned IPO on NASDAQ Deal Type: IPO Firms: Allen & Overy; Skadden, Arps, Slate, Meagher & Flom; VILAF Jurisdictions: Vietnam, U.S.
6 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS Image: REUTERS/Romeo Ranoco In July, a court in France issued a verdict that was hailed by the Malaysian government as a “decisive victory” in its decades-long dispute with a group of alleged Filipino heirs of a 19th-century sultanate over claims to Malaysian state assets overseas. Over 16 percent of Malaysia’s yearly budget was at stake after the Southeast Asian country was ordered by a Spanish arbitrator to pay $14.92 billion to the heirs of Sulu Sultan Mohammed Jamalul Alam (Sulu Sultan), who once controlled territories spanning some islands in present-day Philippines and the Malaysian state of Sabah. Malaysia didn’t participate in the arbitration, which began in 2017 in Spain and was initially overseen by Spanish arbitrator Gonzalo Stampa, who then moved the case to France to deliver the award. In the latest development, the Paris Court of Appeal ruled that the arbitral tribunal in France lacked jurisdiction over the case and thus raised possibility that the second-largest arbitration award on record could be annulled. Dato’ Nitin Nadkarni, a consultant, and Soh Zhen Ning, an associate at Lee Hishammuddin Allen & Gledhill, applauded the French court’s decision. “Arbitration is a consensual dispute resolution process. All litigating parties must consent to have the dispute resolved through arbitration. With respect, as the French Court correctly held, there is no valid and subsisting arbitration agreement between the parties. Therefore, the arbitration should not have commenced in the first place,” note Nadkarni and Soh. The start of the saga dates back to 1878 when the Sulu Sultan signed an agreement with two European adventurers to relinquish lands in Borneo (now the state of Sabah) in consideration of an annual payment. After gaining independence from Britain, Malaysia took over the agreement and kept making annual payments of around $1,000 to the Filipino heirs of Sulu Sultan. But the arrangement stopped in 2013 when a group of self-proclaimed successors of Sulu Sultan launched a failed armed incursion into resource-rich Sabah, which killed more than 50 people, including civilians. Malaysia’s decision to cut the payments prompted protests from the heirs, who claimed to have nothing to do with the incursion; they opted for arbitration against Kuala Lumpur initially in Spain. Spanish arbitrator Stampa ruled in the heirs’ favour and ordered Malaysia to pay $14.92 billion to the Sulu claimants. One of the major cruxes of the case lay at whether Stampa, or the Spanish court, had the jurisdiction to oversee this case. Nadkarni and Soh believe Stampa’s appointment was questionable. “There was simply no connection between the Spanish court and any aspect of the arbitration, and it is unacceptable for a former colonial nation to arrogate to itself the power to appoint an arbitrator to resolve a dispute between Malaysia and the citizens of Philippines, which involved issues of sovereignty over lands situated in Malaysia,” say Nadkarni and Soh. After a Spanish court revoked Stampa’s appointment following a successful bid by Malaysia, he continued to preside over the arbitration in France. To Kuala Lumpur’s delight, the Paris Court of Appeal decided that the arbitrator who heard this case lacked jurisdiction over the dispute; and the appointment of the arbitrator was “incompetent”. Moreover, the French court ordered the Sulu claimants to pay Malaysia around $107,000 in costs. But the issue of compensation remained unaddressed. “The French Court Ruling on the Partial Award that the arbitrator lacked jurisdiction must be fatal to the Final Award (compensation amounting to $14.92 billion). It is very likely that the French courts will eventually allow Malaysia’s application to set aside the Final Award,” note Nadkarni and Soh. “In recent months, we have seen steps taken by the Sulu claimants to levy execution on the assets of Malaysia and Malaysia’s state-owned enterprises in Luxembourg, the Netherlands, and France. This is a cause for concern,” they add. But most recently, in June, the Hague Court of Appeal in the Netherlands dismissed the Sulu claimants’ application for recognition and enforcement of the arbitration award. The claimants are now considering their options before the French Supreme Court. Nadkarni and Soh are not optimistic about their chances. “Unless the Sulu claimants succeed on appeal, they will have little chance of levying execution on Malaysia’s assets in France and the Netherlands. It is safe to say Malaysia has secured significant victories in France and the Netherlands. However, the arbitration award remains enforceable outside of France and the Netherlands due to the New York Convention,” say Nadkarni and Soh. MALAYSIA SECURES KEY ARBITRATION WIN IN REBUKE TO ALLEGED SULU HEIRS
7 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS Image: davooda/Shutterstock.com EXPLAINER NEW SINGAPORE RULING OFFERS CRYPTO CERTAINTY Singapore was pegged by industry experts to become the cryptocurrency capital of the world. In 2021, the crypto market in Singapore grew to $1.48 billion, a ten-fold increase from the previous year, according to KPMG. Singapore lawmakers’ progressive attitude towards digital asset finance invited investors to its shores, setting up a rapidly expanding industry. But that changed in 2022. The value of Bitcoin halved. Singapore-based crypto hedge fund Three Arrows filed for bankruptcy, taking with it cryptoexchange Voyager Digital. Another crypto-lender in the country, Hodlnaut, lost close to $200 million when a relatively stable token, TerraUSD, collapsed – revealing gaping holes in the country’s regulatory framework. This, coupled with the collapse of crypto-exchange FTX, forced the country’s lawmakers to stop and develop a more cautious approach to building a digital asset economy and protecting investments. The Monetary Authority of Singapore released a consultation paper in October 2022 to create a framework to regulate stablecoins – a large sector of cryptocurrency that is considered inherently more stable by virtue of it being linked to the world’s top fiat currencies. The framework was finalised in August and is likely to come into effect next year. Amid this regulatory uncertainty around the nature and legality of cryptoassets, the Singapore High Court in July brought much-needed comfort to stablecoin holders in a first-of-its-kind ruling on digital assets. WHAT WAS THE SINGAPORE HIGH COURT’S RULING? In a case for summary judgment filed by cryptocurrency exchange Bybit against a former employee over allegations that she abused her position to make unauthorised transfers of cryptocurrency Tether to her own secret bank accounts, the court ruled that crypto assets carry property enforcement rights. Tether, more commonly known as USDT, is a stablecoin linked to the U.S. Dollar. USDT and another stablecoin USDC dominate around 90% of the $125 billion global stablecoin market cap. The court ruled that crypto assets qualify as property capable of being held on trust and consequently, any holder of such assets has a legally enforceable property right under common law. The court also said that USDT’s feature of being redeemable against the U.S. Dollar is not a necessity to be categorised as a property being held on trust, opening the door for other crypto-assets to also seek similar protections. WHAT DOES THIS MEAN FOR HOLDERS OF CRYPTO-ASSETS? The decision brings greater certainty over the rights of crypto-holders in Singapore and creates a precedent for enforcement of such rights in the judicial system. “The judgment will reassure crypto-asset holders that their crypto-assets are property, and so if they are defrauded they would have a wider range of actions they could take in the Singapore courts to recover such assets, including tracing and other proprietary remedies,” says Amanda Lees, a partner at King & Wood Mallesons. Lees clarifies that this does not mean an increase in value of the crypto-asset: “While it does not increase the value of the crypto assets, it may give lenders more comfort to accept such assets as security for loans and provides certainty about how the assets will be treated legally.” The ruling is also good news for crypto-asset holders from a bankruptcy and insolvency perspective and may allow holders to assert their rights outside the asset pool available to creditors. “A liquidator/receiver will be able to treat crypto-assets like any other property. If an exchange or platform became insolvent, if a third party was able to claim that a crypto asset held by that platform was their property (not that of the exchange or platform) they may be able to remove it from the general pool of assets available to the creditors,” Lees notes. DOES THE RULING PROTECT OTHER DIGITAL ASSETS? While the ruling protects stablecoins like USDT and leaves the door open for other crypto-assets to seem similar protection, it does not automatically apply to each digital asset. Lees says that the courts must look at the characteristics of each digital asset to see if it can be regarded as property. In October 2022, the Singapore High Court recognised non-fungible tokens as property. The ruling reassures owners of NFTs around the world that their NFTs have legally enforceable rights and are to be treated in the same way as rare art, watches, or other collectors’ items – at least in Singapore, Lees says. “The greater certainty about the legal treatment of crypto assets will help market participants in Singapore, and it is good to see the courts in Singapore taking a consistent position,” Lees adds. u u u
8 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS APPOINTMENTS ALEX BIDLAKE LEAVING Linklaters JOINING Clifford Chance PRACTICE M&A LOCATION Hong Kong PEIWEN CHEN LEAVING White & Case JOINING Herbert Smith Freehills PRACTICE Private Capital LOCATION Singapore OLIVIA KUNG LEAVING Wellington Legal JOINING ONC Lawyers PRACTICE Disputes LOCATION Hong Kong DOUGLAS CLARK LEAVING Douglas Clark LLP JOINING Tanner De Witt PRACTICE IP, Disputes LOCATION Hong Kong THEODORE HENG LEAVING Herbert Smith Freehills JOINING Baker McKenzie Wong & Leow PRACTICE M&A LOCATION Singapore CLAIRE (MI-JIN) KIM LEAVING Kim & Chang JOINING Shin & Kim PRACTICE Projects LOCATION Seoul GILBERT KWOK LEAVING Cocking & Co. JOINING MB Kemp PRACTICE Disputes, Insolvency LOCATION Hong Kong FARAH SHUHADAH RAZALI LEAVING Zul Rafique & Partners JOINING Rosli Dahlan Saravana Partnership PRACTICE Disputes LOCATION Kuala Lumpur KAREENA TEH LEAVING LC Lawyers (EY member firm) JOINING Georgiou Payne Stewien PRACTICE Disputes LOCATION Hong Kong DENTONS, AUSTRALIA’S ALLENS LAUNCH PROPRIETARY VERSIONS OF CHATGPT Dentons and Australian law firm Allens have separately unveiled proprietary versions of ChatGPT, the large language model-based chatbot released by OpenAI last year. Dentons’ solution, named fleetAI, will enable lawyers to conduct legal research, generate legal content and identify relevant legal arguments. Another bot will allow multiple legal documents to be uploaded so that key data such as clauses and obligations can be extracted, analysed and queried against. “The ability to upload and analyse client matter documents at speed and in a secure manner is the real gamechanger,” said Paul Jarvis, CEO for the UK, Ireland and the Middle East at Dentons. Allens has introduced a solution known as Airlie that will facilitate the controlled use and integration of generative AI technology to drive efficiencies and enhance client service, while maintaining the confidentiality of the firm’s and its clients’ information. “With the rapidly growing influence of ChatGPT and other generative AI products, we’re committed to exploring appropriate integration of these technologies into our business processes, work practices and client interactions,” said Richard Spurio, managing partner of Allens. A report released in April by the Thomson Reuters Institute found that law firms see opportunities in generative AI solutions such as ChatGPT, but concerns persist. While 82 percent of law firm lawyers surveyed believe that ChatGPT and generative AI can be readily applied to legal work, only 51 percent said that these should be applied to legal work.
9 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS Image: Natalia Grakhova/Shutterstock.com South Korea’s major lenders are staring at a fundamental shake-up to their decades-long dominance of the country’s commercial bank sector, following the introduction of new rules. The South Korean Financial Services Commission (FSC) said in July that regional banks and financial firms will be allowed to apply for nationwide commercial bank licenses. “The government will proactively consider new approvals if accompanied by sufficient financial resources and feasible business plans,” said Kim Joo-hyun, chairman of the FSC, in front of major financial groups in the country. So far, the top five national commercial lenders – Kookmin Bank, Shinhan Bank, KEB Hana Bank, Woori Bank and NongHyup Bank – are home to about 63 percent of South Korea’s $3.16 trillion in bank assets, and about three-quarters of deposits. But this could change, as the FSC aims to introduce fair and effective competition into Korea’s banking sector and to bring greater benefit to financial consumers due to high-interest rates, according to Han Jin Lee and Steve Song, attorneys at Kim & Chang. The proposal “was announced in response to the government’s observation that the banking sector supplies services that strongly resemble ‘public goods,’ while maintaining an oligopoly resulting from a limited number of business licenses granted by the government,” note Lee and Song. Under the proposal, the FSC wants to transform more regional banks - established to provide greater access to financial services to a specific regional and rural areas – to national commercial banks, which are headquartered in Seoul and operate throughout the county without any regional restriction. This came as South Korean President Yoon Suk-yeol criticised the big national banks for profiting from the gap between lower interest rates on deposits and higher ones on loans at a time of roaring borrowing costs tightening the screw on customers. In addition, regulators will encourage M&A activities amongst mutual savings banks, which provide retail and small business banking on a limited scale. That includes offering time deposit and small credit to individual borrowers and small businesses at typically higher rates. Through inorganic expansions, the hope is for larger mutual savings banks to provide additional competition to the bank deposit and loan market. “Such changes may bring new opportunities for Korea’s legal industry to advise on not only various issues, including licensing applications (so that regional banks can convert into commercial banks) and merger transactions between mutual savings banks, but also to advise on various financial products and services due to increased competition amongst a larger number of market participants,” say Lee and Song. Although these new measures are expected to stimulate the market and make things harder for the big lenders, Lee and Song caution regulators against potential risk arising from such increased competition in certain areas such as markets for lending or taking deposits. Meanwhile, “in order to provide meaningful competition to Korea’s banking sector, the government should continue its efforts to promote greater competition and efficiency with respect to other market players such as securities companies, FinTech companies and online banking service providers,” note Lee and Song. The Kim & Chang duo believe greater competition in the banking sector will have a positive effect on the legal industry. “There will likely be a greater demand for highly skilled lawyers who can advise on complex regulatory issues, and in that sense, lawyers with experience working in other western jurisdictions that have sophisticated banking industries will continue to be in high demand,” they say. As the banking and finance world moves towards digitalisation while embracing emerging technologies, Lee and Song believe the proposal is South Korea’s answer to the increased competition between traditional banking sectors and new areas such as cryptocurrency, FinTech, and decentralised finance (DeFi). The proposal “is part of the Korean government’s efforts to upgrade Korea’s traditional banking sector by increasing competition so that traditional banks can better adapt to the world that has embraced digital finance,” say Lee and Song. And law firms with the necessary vision are well-positioned to take advantage of that transition journey. “Law firms will continue to play a crucial role in supporting traditional banks in their efforts to become more competitive and innovative, but at the same time, the advent of digital finance provides law firms with the opportunity to work with tech companies and non-banking players that are looking to enter the financial sector,” note Lee and Song. SOUTH KOREA AIMS TO REVIGORATE BANKING SECTORS BY RELAXING LICENCE RULES
10 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS (Reuters) In recent months, Australia has become a key target for Japanese companies as they seek to invest in energy (including renewables), technology, real estate and more. And lawyers expect this trend to diversify, given Australia’s diverse business possibilities. Japan and Australia have traditionally been close investment partners, with the North Asian country having been the second-largest source of foreign direct investment into Australia after the U.S. But the relationship appears to have strengthened even more recently,with Herbert Smith Freehills reporting a “step change” in the past 12 to 18 months. “Changes in the global geopolitical environment have brought the two countries closer together as trusted partners, particularly in the mutual pursuit of decarbonisation and energy security,” the report found. “Japanese M&A and investment activity in Australia was significantly higher in 2022 than 2021. Investments occurred across a broad number of sectors, including energy, technology, financial services, real estate, consumer, infrastructure, construction/housing and services. The energy and technology sectors were especially attractive targets for investment.” One major reason is that Japan is has been looking to diversify its energy supply away from Russia, but in the long-term, the country is also keen to secure green energy sources. While Australia currently supplies around 75 percent of Japan’s coal for power generation and around 43 percent of its liquefied natural gas (LNG), “the Japanese government and companies are simultaneously addressing energy security in the context of decarbonisation as part of the energy transition from fossil fuels,” say Ian Williams and Damien Roberts, partners at HSF. The HSF report identified another factor behind the uptick: As COVID travel restrictions were relaxed, Japanese companies were able to make more frequent trips to Australia to make on-site inspections and conduct due diligence easier. “New energy-related MOUs and joint feasibility studies that were signed in 2019-2021 are now progressing to the proof-of-concept” stage and “implementation phases as the projects aim for commercialisation by 2030.” Australia’s unique resource composition is a booster of these moves. In addition to producing a great amount of fossil fuels such as coal and natural gas, Australia has a lot of deposits that are suitable for carbon capture and storage (CCS), while being suitable for solar power generation thanks to sunshine throughout the year and wind power generation due to a lot of flatlands and stable wind. In short, Australia is currently and will continue to be an energy superpower that can produce massive quantities of green ammonia and hydrogen through the production of renewable energy. It also produces the minerals necessary for large-capacity batteries. However, Hans Menski, a partner at Clifford Chance, says that Japan still needs LNG, and Australia is its main supplier. “However, Australia has the potential to become a major green hydrogen and ammonia supplier, and in a lot of ways it’s become a focal point for energy investment not only for immediate transition but also longer term. There is a lot of pressure, particularly on fossil fuel power generation. We expect that energy supply from Australia to Japan will move to new energy, particularly hydrogen and ammonia,” he projects. Williams and Roberts hold the same opinion. “Japan is looking at all energy sources for its future energy security – renewables, CCS/CCUS, blue hydrogen (hydrogen produced fossil fuels but the by-produced CO2 are stored in unused deposits), green hydrogen, ammonia, methanol,” they say. “All of these developments mean that Australia is well positioned to continue as a trusted and reliable energy supplier to Japan.” But natural resources are not the only enticements for investors, with the country offering investment opportunities. Australia is becoming known as a technology country and a center for innovation, says Williams and Roberts. They say the success of software companies such as Atlassian, WiseTech, Acconex and unicorn companies like Afterpay, Linktree, Canva, Airwallex, Realestate. com.au, Seek, Carsales, and MYOB are a factor behind the growing reliability of the Australian technology market. There are additional areas of interest such as railroad infrastructure and real estate. Some major M&A deals of late have included Tokyo Gas’ $2.15 billion sale of its interest in four LNG projects MidOcean Energy; TAL Dai-ichi Life Australia’s $600 million acquisition of Westpac Life Insurance Services from Westpac, and Mitsui and Nomura’s acquisition of 67 percent of agricultural asset management company New Forests. Herbert Smith Freehills’ report projects “increasing sector diversity with investments in consumer products, retail, real estate and services,” adding that “Japanese trading houses in particular have continued to divest from carbon-intensive assets which they no longer consider strategic and reinvest in tertiary industries. Sydney and Melbourne are increasingly seen as luxury markets in the same mould as Singapore or Hong Kong where there is demand for high value products and services.” AUSTRALIA’S RENEWABLE ENERGY AMONG FACTORS LURING JAPANESE COMPANIES Image: chinasong/Shutterstock.com
11 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM BRI EFS Q&A ‘WE CAN SUCCESSFULLY CREATE A SUPPORTIVE LEGAL ECOSYSTEM’ The Thai Corporate Counsel Association (THAI-CCA) was launched in June with a mission to rejuvenate Thailand’s in-house community and expand its reach across the region. Sahachai Wibuloutai and Thitiwat Wisarath, co-founders of Thailand’s first corporate counsel association, share their vision for the organisation and how they are planning to tackle future challenges to achieve their goals. ALB: What have you set out to achieve through the THAI-CCA? Sahachai Wibuloutai: The THAI-CCA was formed as a member-benefit professional organisation focused on three key objectives, which are community, career, and activation. As we all know, the size of in-house legal teams varies by organisation depending on commercial and business needs, which are dynamic and subject to changing situations and requirements. Thus, the knowledge and capabilities possessed by in-house legal teams may sometimes be insufficient to cover all areas of work and legal challenges that a company faces. It is possible that small-to-mediumsized teams could encounter problems, difficulties, or tensions and sometimes feel alone in work areas with which their team members are not well-equipped. Also, working as in-house counsels requires not only technical legal skills to ensure compliance with specific legal requirements and all imposed legal standards, but also important soft skills such as corporate governance and ethical conduct, stakeholder management, people management, and crisis management to advise concerned business units to impose suitable problem-solving solutions to ensure the smooth operation of the organisation. With the community objective and development of a diverse professional network, we believe that we can successfully create a supportive legal ecosystem that provides significant benefits to all members in terms of sharing experience, closing the knowledge gap, and providing regular updates on legal developments as well as regional and global trends in more advanced jurisdictions such as Australia, Hong Kong and Singapore. We will also include specific support to address diverse needs, such as industry community building for senior GCs, soft skill and leadership skill coaching for mid-senior level in-house counsels, and knowledge and experience sharing for junior in-house counsels. The founding members of the THAI-CCA aim to develop and modernise Thai in-house legal functions by introducing knowledge of advanced technology and AI legal tools so that our members can consider deploying the tech tools they deem fit for their work functions. ALB: How does the THAI-CCA plan to ensure that its members stay well-equipped with the latest legal insights and industry best practices? Thitiwat Wisarath: The THAI-CCA is focused on the development of relationships and continued expansion of collaboration with law firms, regulators, industry leaders, as well as legal platforms and media, and other corporate counsel alliances in the APAC region. This will support the THAI-CCA in optimising our capability to share knowledge and recent developments in legal and business areas with our members and keep them up to date on the ongoing development of best practices and fast-moving trends related to public policy, the world economy, and the political environment. As a starting point, we already have onboard key members in the Thai banking/fintech, e-commerce, digital asset, hospitality, and pharmaceutical industries, who will jointly work together as an industry community and provide legal feedback and input to the applicable regulators. To enhance the benefits for our members, we will continue to encourage collaborations and partnerships in both legal and non-legal fields, such as corporations, legal recruitment agencies and legal tech vendors. This will enable our members to tap into networking and learning opportunities, attend annual conferences and law award events, utilise legal databases, and enjoy other membership privileges. ALB: How important is it for the THAI-CCA to develop the careers and networks for inhouse counsel? Thitiwat: One of the main purposes of the THAI-CCA is to develop and improve personal and organisational relationships among in-house legal counsels in different industries. Due to having strong personal relationships facilitated by the THAI-CCA, members of the THAI-CCA can share career and professional development opportunities amongst each other, which benefits members who are open for new skills, career opportunities and challenges. A legal team in a corporate entity may generally be considered merely a support function. Our strategy is to support the success of our members in developing their value. Our view is that the legal team in a company is also a business enabler, which plays an important role in the company’s business and success. SAHACHAI WIBULOUTAI THITIWAT WISARATH
12 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM Russia’s relationship with Europe and the West had been deteriorating since Putin’s occupation of Crimea in 2014. But it hit new lows once Russia marched its troops into Ukraine in February 2022. Western alliances, including the G7, NATO and the EU, imposed a flurry of sanctions on Russian oligarchs, companies and banks, crippling their ability to conduct business in traditionally favoured jurisdictions like London. To keep money flowing in, Russia rapidly increased trade with Asia – in economic powerhouses like China, India and Southeast Asia – and dispute resolution has followed. Sanctions have influenced how Russian businesses and counterparties look at arbitration agreements, says Hong Kong-based attorney Denis Brock, who chairs O’Melveny & Myers’ international disputes and arbitration practice, and heads the firms Asia litigation practice. “There are two aspects: concerns of Russian businesses, and concerns of those doing business with Russian companies. Given the sanctions in place, doing business with Russian companies is restricted. Russian businesses will find it difficult to transfer funds to arbitral institutions to pay fees and to pay international counsel to represent them. Those doing business with Russian entities may encounter difficulty enforcing awards in their favour: it may be difficult for Russians to transmit funds internationally to satisfy awards,” notes Brock. In terms of sanctions, Asia has had a mixed response to Russia’s invasion of Ukraine. Russia’s largest trading partner, China, has refused to condemn Russian actions. In fact, in 2023, bilateral trade between the nations grew 36 percent year-on-year to $134.1 billion. India has also remained largely neutral and in fact, has ramped up import of Russian oil in the last year, with overall bilateral trade between the countries reaching a record high of $45 billion. Other large economies like Japan, Singapore and Taiwan have imposed sanctions more in line with the West, but, in many cases, not going as far as their Western counterparts. Hong Kong has also maintained its neutrality. Given the friendlier environment, Russian businesses have increasingly pivoted to China, India, Southeast and Central Asia, with arbitration centres like Hong Kong and Singapore seeing more Russian cases. SINGAPORE AND HONG KONG Since 2014, when the U.S. and EU started sanctioning Russian companies, businesses from the country have tended to prefer dispute resolution under arbitrational institutions in Asia – including the Singapore International Arbitration Centre (SIAC) and the Hong Kong International Arbitration Centre (HKIAC) - rather than the LCIA or the ICC, says Kie Matsushima, a Tokyo-based special counsel at Japan’s Anderson Mori & Tomotsune. Russia’s traditionally favoured seat of arbitration – London – has witnessed a steep decline in interest from Russian parties. As per statistics released by the London Centre for International Arbitration, Russian party involvement in its arbitral proceedings has dropped from 7 percent in 2018 to 2.7 percent in 2022. While numbers from the SIAC and the Hong Kong International Arbitration Centre do not necessarily indicate a steep rise in Russian parties availing their services, some arbitration lawyers believe that Russia’s eastward movement following the implementation of sanctions has brought more arbitration to Asian centres, and to some more than others. Let’s start in Singapore, a global arbitration hub which has been actively FROM RUSSIA, WITH WORK Russians have been moving their business and dispute resolution to Asia for over a decade, but new sanctions following the invasion of Ukraine has significantly hastened that process. Dispute resolution hubs like Singapore, Hong Kong and Tokyo are increasingly attracting Russian businesses following the implementation of Western sanctions, and that trend is set to continue as the conflict drags on. BY NIMITT DIXIT ARBITRATION
13 ASIAN LEGAL BUSINESS – SEPTEMBER 2023 WWW.LEGALBUSINESSONLINE.COM courting Russian business for the last two decades. Lawrence Teh, Dentons’s global cohead of international arbitration, says that Dentons has historically received significant arbitration work from Eastern Europe, including Russia, both globally and in Singapore. He adds that Singapore is seen as a popular arbitration seat among Russians when dealing with Chinese and other Asian counterparties, as it is considered a neutral venue. “Singapore was a good place for Russians particularly if they were trading with a Chinese or any other Asian counterparty. The Russians wouldn’t prefer to arbitrate in China in the same way that China would prefer not to arbitrate in Russia. Therefore, Singapore became a very acceptable result,” he notes. Singapore usually only implements United Nations sanctions in international conflict scenarios, and not those imposed by the U.S. or the EU, says Teh. But on this occasion of the conflict in Ukraine, Singapore has adopted a different approach and imposed limited sanctions against four Russian banks – VTB Bank, Vnesheconombank, Promsvyazbank and Bank Rossiya. The implementation of sanctions against these banks has affected the Singapore arbitration market a little. “Banking becomes more difficult. Russians will find that if they’re using these four banks that have been sanctioned, they may have difficulty paying advances on costs to arbitral institutions on time,” says Teh. Singapore has also always been fair to Russian parties in arbitrations. Despite hostilities in Ukraine, Singaporebased tribunals and courts continue to make and recognise awards in favour of Russian parties, including a nine-figure claim that Teh argued for on behalf of a Russian client. Despite this, moving arbitration to more sanction-neutral venues like Hong Kong still appears attractive at first glance. The Special Administrative Region has historically been Asia’s Image: Victor Josan/Shutterstock.com ARBITRATION
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