The signing of the MOU took place on the sidelines of the “Investment Conditions, Sino-European Joint Ventures and Dispute Resolution between Chinese and European Parties” event on 21 November 2023
On the afternoon of 7 November, the Legal & Regulatory Committee of BritCham Shanghai hosted a hybrid sharing to address in-bound/out-bound investments and arbitration-related issues event at the Shanghai International Economic and Trade Arbitration Commission (SHIAC) office. The topic of discussion was “Investment Conditions, Sino-European Joint Ventures and Dispute Resolution between Chinese and European Parties” featuring insights shared by a diverse group of experts, professionals, and thought leaders.
The gathering commenced with a warm welcome from Dr Adolf Peter, Associate Professor of Shanghai University of Political Science, and Co-Chair of BritCham Shanghai Legal & Regulatory Committee who extended his greetings to all the attendees.
Before the event commences, there is a momentous occasion for the Shanghai International Economic and Trade Arbitration Commission (SHIAC) and BritCham Shanghai to sign the Memorandum of Understanding (MOU). Stuart Dunn, Executive Director of The British Chamber of Commerce Shanghai and Wang Weijun, Secretary-General from SHIAC, delivered speeches representing each party.
The signing of the MOU by both parties symbolised a commitment to joint efforts in promoting international arbitration as a preferred method of dispute resolution for resolving international disputes. This signifies a dedication to fostering mutual benefits and aims to advance international arbitration, ultimately working towards strengthening ties between the UK and China.
During the first panel discussion on “Investment Conditions in China and Abroad,” Jianlin Ni, Partner of Beijing Dacheng Law Offices, LLP (Shanghai), took the initiative to present the New Rules on Foreign Investment in China. The presentation covered three key aspects: Pre-establishment National Treatment and Negative List, national security review, and anti-monopoly review.
Following that, Manoj Mehta, CEO of Naked Group (Sustainable Luxury Resorts in China), shared the compelling story of Naked Group in China. He presented their investment journey and experiences in the Chinese market, highlighting the ESG (Environmental, Social, and Governance) concept embedded in their business. Following Manoj, Kevin Leung, Director of Business Development Northeast Asia at cargo-partner, introduced their comprehensive business services. He shared cargo-partner’s investment story in China and conducted a detailed analysis of the specific investment environment in the country.
Subsequently, Huang Jun, Deputy General Manager of the Legal Department at Sinar Mas Paper (China) Investment Co., Ltd., presented insightful thoughts on the legal framework for joint ventures in China. He addressed key aspects, including the requirements of the Foreign Investment Law on the governance and Articles of Association (AoAs) of joint ventures. Huang Jun also highlighted the reduced restrictions on foreign investment ratios, using the automobile industry as an illustrative example. Additionally, he provided an overview of the current legal framework for Foreign Invested Enterprises (FIEs).
Following that, Dr. Thomas Ruhm, Managing Partner of Fieldfisher Vienna Office, provided valuable insights into the Foreign Direct Investment (FDI) Regulations in the EU and Austria. He highlighted key points, beginning with the aim of the Regulation: to establish transparent, predictable, and non-discriminatory mechanisms for examining FDIs based on security or public order grounds. Moreover, the presentation covered the uniform set of areas for screening, encompassing critical infrastructure, critical technologies, supply of critical inputs, access to sensitive information, media freedom, and the evaluation of whether foreign investors pose risks related to government control or involvement in illegal activities.
In the final segment of the panel, Bingguang Yu, Senior Partner of Allbright Law Offices, shared insights on investing in the UK and China. He discussed the UK’s National Security and Investment (NSI) Act, effective from 4 January 2022, introducing new requirements for foreign direct investment (FDI) in sectors impacting national security. Additionally, he highlighted the Regulations of Shanghai Municipality on Foreign Investment and the city’s comprehensive policies launched in April 2023 to boost international trade and investment, including measures to assist key enterprises, expand markets, and improve the business environment. These policies aim to promote stable and quality growth in foreign trade, with a focus on supporting sectors like electromechanical and high-tech products. Bingguang Yu also highlighted the significance of Lin Gang Special Area’s policy support as an important example. He delved into the tax system and policies in this area, noting a reduced corporate income tax rate of 15% within a five-year period for industries such as integrated circuits, artificial intelligence, biomedicine, and civil aviation. Additionally, there is a subsidy policy aimed at alleviating the individual income tax burden on overseas talent.
In the second panel on “Dispute Resolution between Chinese and European Parties,” Bridge Zhao, General Counsel of Smiths Group, began by introducing Smiths, a 170-year-old industrial and engineering company that transitioned from making watches for the British army to focusing on technology and engineering. He then shared the joint venture story of Smiths Group and emphasised that, in retrospect, arbitration would be the preferred approach for addressing any issues. Zhao highlighted a key point that a joint venture is not just about capital; it is a combination of people. He emphasised the importance of incorporating more humanity and understanding between both parties in a joint venture.
Dr. Adolf Peter, Associate Professor of Shanghai University of Political Science, addressed Arbitrations Involving Sino-foreign Joint Venture Contracts and Companies in International Supply Chains. He provided insights into Safe Foreign-related Contract Scenarios and emphasised the Key Advantages of Consolidations and Joinders.
Yang Guang, Deputy Secretary General of Shanghai International Arbitration Center (SHIAC), discussed the SHIAC 2024 Arbitration Rules, emphasizing their user-centric approach and global impact. Established in 1988, SHIAC has seen parties from 85 countries, with awards recognised in nearly 50 regions. Yang highlighted key aspects of the new rules, effective from January 1, 2024, focusing on a balanced approach to party autonomy, arbitrators’ procedural power, and institutional support. She presented a case study illustrating the application of these principles, specifically addressing multiple contracts rather than opting for consolidated arbitration.
Cunyuan Zhang, Director and Head of China of the Singapore International Arbitration Center (SIAC), highlighted arbitration as a widely favored method of dispute resolution, especially in cross-border cases involving foreign investors and domestic companies. He mentioned its enforceability in 160 countries and noted that successful Chinese companies often prefer foreign arbitration institutions. Zhang pointed out the popularity of Singaporean and Hong Kong institutions due to their compatibility. He reassured that enforcing arbitration laws in China is not a concern, as the country is very open to arbitration laws.
Zijin Yu, Deputy Counsel of the HKIAC Arbitration Team, highlighted key statistics about the Hong Kong International Arbitration Centre (HKIAC). Notably, 40% of HKIAC cases involve Chinese parties, with 20% conducted in Chinese. The centre operates in 19 languages, covering both civil and common legal law systems. Significantly, 8 out of 13 arbitrators are native Mandarin speakers, showcasing linguistic diversity to effectively serve participants in arbitration proceedings.
The roundtable event brought together distinguished representatives from various business sectors, creating an opportunity for meaningful discussion. Experts were on hand to provide valuable suggestions and engage in open dialogues with the participants.
Among the esteemed attendees were representatives from prominent organizations such as Modern Water Technology (Shanghai) Co. Ltd, TsingLaw Partners, Smiths, JTN LAW FIRM, TSK dental, Plant Petz LTD, ECARX, Wintell& Co, Schulz Noack Barwinkel, KLINGER Fluid Sealing Enterprise Shanghai LTD, Rail Cargo Group, ECUPL, Fangda Partners, Linklaters LLP Shanghai Representative Office, Shanghai Landing Law Offices, GrantThornton, Knight Frank (Shanghai) Property Consultants Co.Ltd, gbd Engineering Consulting, Citic Securities, and Next Beauty China Limited.
