On 31 January 2018, China Business Law Journal released Deals of the Year 2017. In the list, Parallel arbitration cases involving International Wood Suppliers and JD Finance’s new round financing of Guantao were selected in sections of disputes and investigations and deals in China respectively. The review of the highlights is shown as follows:
Parallel arbitration cases involving International Wood Suppliers
This dispute arose between International Wood Suppliers (Hong Kong) Limited (IWS), a German-funded company registered in Hong Kong, and another company registered in the Republic of Lithuania.
Guantao applied for arbitration at the China International Economic and Trade Arbitration Centre (CIETAC) on behalf of IWS in December 2015. However, during CIETAC arbitration proceedings, the Lithuania-registered company also submitted a parallel arbitration for the same case to the Lithuanian Court of Arbitration (LCA), in August 2016.
After careful study of the relevant Lithuanian law and arbitration rules of the LCA, as well as seeking advice from Lithuanian lawyers, Guantao’s legal team raised objections to the jurisdiction of the LCA tribunal and the validity of some parts of the arbitration clause, and successfully persuaded the LCA tribunal to render an award to leave the claim of the Lithuanian company unexamined.
The issues at dispute included whether a third-party offender hacked into the email account of the respondent resulting in defaults, which party must bear the liability for breach of contract, and how. The CIETAC tribunal finally ruled in January 2017 in favour of IWS.
The Guantao team was led by Xu Ling, the executive partner in Beijing, and Sun Shaosong, the firm’s partner in Beijing.
JD Finance’s new round financing
The related party of China Minsheng Trust set up the first-level fund Zhaohe Minxin (Shenzhen) Equity Investment Partnership (Limited Partnership) as the limited partner, with Shenzhen Qianhai Hongzhao Fund Management as the general partner. The first-level fund subscribed the limited partner shares of Suqian Donghe Shengrong Equity Investment Partnership, the second-level fund. The second-level fund participated in the new-round financing of JD Finance.
In this transaction, Guantao Law Firm assisted its clients in setting up a two-level fund structure. As this investment is indirect, according to Guantao, the firm needed to assist the client in controlling the risks incurred during the direct investment between the second-level fund and JD Finance, the subject matter.
The winning deals have been chosen based on various factors, which involves the overall significance, complexity and innovative nature of the deals and cases, while also taking into account the deal size and broader interests. China Business Law Journal’s independent editorial team made its own choices on the deals they felt were the shining stars for the year.
