Beijing Arbitration Commission

Symposium on “New Era of Foreign Investment” Successfully Held

Publish time: 2019-7-2

On the afternoon of April 9 2019, a symposium on “New Era of Foreign Investment” jointly organized by the Beijing Arbitration Commission / Beijing International Arbitration Center (the “BAC”), the Commerce Bureau of Chaoyang District, Beijing, the Beijing Chaoyang District Headquarters Enterprise Federation, LexisNexis and Commerce & Finance Law Offices was successfully held at the BAC International Conference Hall. This event belongs to the BAC Forum for Selected Professionals series, and has attracted more than 100 professionals from governmental authorities, enterprises, research institutes, arbitration institutions and law firms.

At the beginning of the symposium, Dr. Chen Fuyong, Deputy Secretary General of the BAC, and representative of the Commerce Bureau of Chaoyang District, Beijing delivered opening addresses, respectively.

In his speech, Dr. Chen Fuyong started from the perspective of dispute resolution, and introduced the highlights of the BAC Investment Arbitration Rules (draft for comment) such as the circulation of the draft award to both parties for comment before it is formally rendered, the arrangement of appeal mechanism, the selection of means of service and summary proceedings, and the requirement that arbitrators shall have the background of public international law, by referring to the provisions of Foreign Investment Law on expropriation and the BAC Investment Arbitration Rules (draft for comment) launched by the BAC. Also, he shared the significance of investment arbitration to in-house counsels.

Dr. Chen Fuyong

Based on the unique location of Chaoyang District and the background of Beijing being selected as the pilot city of national service industries, the representative of the Commerce Bureau of Chaoyang District, Beijing introduced the significance of Foreign Investment Law to enterprises and local governments. He said that Chaoyang District would strengthen its strategic cooperation with the BAC in the next stage, and promote the building of Beijing into political, cultural, international exchange and technical innovation center with assistance of transnational corporations and professional firms.

Representative of the Commerce Bureau of Chaoyang District, Beijing

The symposium started with the keynote speech by Mr. Zhang Xiaoman, Managing Partner of Commerce & Finance Law Offices. Mr. Zhang analyzed the potential influence of the promulgation of the Foreign Investment Law on foreign investment practice from aspects of VIE framework, national security review, restructuring of enterprises, negative list, rules and administrative acts in special economic zone. He stressed that following the promulgation of the Foreign Investment Law, practitioners should, in addition to paying attention to the laws and implementation rules thereof, keep an eye on the progress of Sino-US trade negotiation and the measures that might be taken by the two governments accordingly.

Mr. Zhang Xiaoman

Thereafter, Ms. Wang Yang, Senior Counsel of Commerce & Finance Law Offices, provided an analysis of the making or the Foreign Investment Law centered on five key words of “one keynote”, “two innovations”, “three laws in one”, “four crossbeams and eight pillars” and “five years transitional period”. She pointed out that the Foreign Investment Law concentrates on the main points, and from the perspectives of legal framework and system design, it well reflects the Chinese government’s firm determination of promoting the country’s opening to the outside world and foreign investment, building an international first-class business and legal environment. For foreign investment practitioners, the launch and implementation of supporting systems and rules of the Foreign Investment Law will surely be worth looking forward to.

Ms. Wang Yang

Next, Mr. Dai Lingyun, Managing Partner of Commerce & Finance Law Offices, presented an introduction of the changes private equity investments might have in the era of the Foreign Investment Law based on the Foreign Investment Law’s adjustments to the dual-track approach concerning law application and corporate structure of domestic and foreign invested enterprises adopted in the era of coexistence of Chinese-overseas equity joint ventures, Chinese-overseas contractual joint ventures and wholly foreign owned enterprises. He pointed out that although the Foreign Investment Law is unclear about whether VIE framework and cross-border share swap are allowed, according to the present situation, the Foreign Investment Law will establish a unified enterprise system centered on the Company Law and the Partnership Enterprise Law, which will have a significant influence on the framework design of private equity investments.

Mr. Dai Lingyun

The fourth speaker is Mr. Cui Qiang, Partner of Commerce & Finance Law Offices. He employed an angle of litigators. Based on cases he has dealt with, and centered on the significant change on foreign invested companies’ corporate governance resulted from the Foreign Investment Law’s addition of board of shareholders in foreign invested companies, he introduced the change of relief approaches the dissenting shareholders could take under the background of the Foreign Investment Law. He pointed out that the law alone is not enough, and the market entities could only effectively protect their rights by fully understand law rules and flexibly use various legal tools.

Mr. Cui Qiang

At last, Ms. Shen Xiaolin, Partner of Commerce & Finance Law Offices, started her speech from the connection between the Foreign Investment Law and the laws on Chinese-overseas equity joint ventures, Chinese-overseas contractual joint ventures and wholly foreign owned enterprises. She analyzed ten potential challenges during the transitional period, such as IP protection, corporate governance, law application and settlement of disputes arising from law changes, and looked into the implementation of the Foreign Investment Law in the future. She was of the view that with the implementing rules to be launched by relevant authorities, the Foreign Investment Law will greatly promote the opening-up policy and the use of foreign funds from a number of aspects including adjustment to the negative list of market access for foreign investment and promotion of the catalogue for the guidance of foreign investment industries.

Ms. Shen Xiaolin

During the subsequent Q&A session, the audience had more in-depth exchanges with the speakers concerning legal issues related to foreign investment they have met in practice. In the applause of the audience, the symposium came to a successful end. The event was moderated by Ms. Wang Yang, Senior Counsel of Commerce & Finance Law Offices.

Questions by audience

The symposium

The BAC has been closely following industrial spotlights, actively discussing the legal changes and influence thereof in practice of relevant areas with industrial professionals, and working hard to build a platform for exchange between legal professionals. The BAC sincerely welcome professionals from various industries to continue to pay attention to and participate in events organized by the BAC. You are also welcome to pay attention to the BAC’s website and WeChat account for more information.

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All disputes arising from or in connection with this contract shall be submitted to Beijing Arbitration Commission / Beijing International Arbitration Center for arbitration in accordance with its rules of arbitration. The arbitral award is final and binding upon both parties.
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