Asialaw Profiles
The Guide to the legal markets of the Asia-Pacific

Herbert Smith has an undoubtedly top presence on cross-border China finance and capital markets work. The firm particularly benefits from relationships with top clients in the international and natural resources sector, though partners often represent headline clients across diverse sectors. One client says: “The partner we worked with, Kevin Roy, was very hands on and from our perspective he provided good guidance to his team.”

In November 2010, regional head of the US capital markets practice John Moore led a team that advised underwriters Morgan Stanley, CCBI, JPMorgan, BOCI and Deutsche Bank as joint global coordinators of the landmark HK$14 billion Hong Kong Stock Exchange IPO and global Rule 144A/Reg S offering of China Rongsheng Heavy Industries Group. The market listing involved a reorganisation of the Rongsheng Group in order to meet difficult regulatory requirements and business needs.

As Asialaw Profiles went to press, Moore had resigned from Herbert Smith and is due to join Morrison & Foerster in Hong Kong later in 2011.

Herbert Smith partners Tom Chau, Matt Emsley, Gary Lock, Kevin Roy and Andrew Tortoishell remain leading lawyers in the practice.

Herbert Smith’s strong relationships with multinational corporations in the energy and life sciences sector make the firm’s China M&A team the go-to practice for many clients. Veteran partner Simon Meng serves as department head for M&A from the Shanghai office, and continues to lead the team on M&A and joint venture deals across a range of industry sectors.

Clients have high praise for Meng and the Herbert Smith team. “We are deeply satisfied and impressed by the extent of the knowledge of the firm regarding all of the questions raised by a deal,” says one client. “Not only did the firm perfectly master the general regulations and laws of China, but it precisely knew the history of our project. This was of great help to us.”

This year, partner Betty Tam led a firm team representing Johnson Matthey on an unusual deal that involved the creation of a joint venture with Hebei Aoxing Pharmaceutical Group. Johnson Matthey holds a 49% equity interest in the JV through Macfarlan Smith in Hong Kong, while Hebei Aoxing holds a 51% equity interest. The deal is the first JV to manufacture and sell narcotic drugs in China.

Herbert Smith is known in the market for its leading dispute resolution practice, especially when it comes to litigation for high profile companies in Hong Kong and China. The firm is also a heavyweight on the arbitration side, with partners routinely representing top clients in CIETAC and Singapore arbitrations. Herbies has strong connections with local PRC firms, and one client says the practice is “good both in China and internationally”.

In one recent case, Herbert Smith’s dispute resolution team advised UTFE, as subsidiary of UTC, as plaintiff on a claim for breach of a number of warranties against the vendor and its directors after the acquisition of a Hong Kong listed company.

Mark Johnson, Gavin Lewis and Justin D’Agostino are all key dispute resolution practitioners.

Herbert Smith is a leading energy and natural resources firm, and the practice is known for its deep relationships with multinational energy companies as well as its genuine knowledge of this sector. Herbies’ top M&A partners facilitate many of the firm’s deals in the energy space.

One client says: “The firm’s lawyers are cooperative, collegiate team players. We stand shoulder to shoulder and have a good, healthy relationship.”

In one representative transaction, a Herbies team, led by partner Anna Howell, advised PTT Exploration and Production (PTTEP) in its acquisition of a 40% share of the Kai Kos Dehseh Oil Sands Project. The deal was finalised via a purchase of 40% of the partnership units in Statoil Canada Partnership for US$2.28 billion.

Herbert Smith is known in China for its deep relationships with leading IT and telecom companies, and is often involved in M&A and capital markets work for these clients.

The firm recently advised a client on the set up and development of an online hotel booking site in China. This deal was subject to keen foreign investment rules as it was classified in the telecom sector rather than the travel industry, which has been opened over the last few years.

Herbert Smith is also advising ICBC in an export credit agency (ECA) backed Rmb credit facility for Indonesia’s Bakrie Telecom. Bakrie Telecom used the financing to acquire an online charging system for billing from Huawei that would be guaranteed by a Sinosure ECA.

CMS Legal

CMS Legal offers a broad range of advice across all aspects of labour and employment law. The firm represents multinational companies in developing internal systems for their Chinese workers and helping them to understand and comply with Chinese law.

CMS Legal’s labour and employment team recently advised a major German medical equipment maker’s Chinese subsidiaries on labour contract, employee handbook, social security, termination, and visa issues. The work necessitated finding a balance between enforcing company compliance by employees and helping insulate the client against damages resulting from an employee’s breach of confidentiality before termination.

Dewit Law Office

Dewit Law Office offers an array of advisory services on a wide range of employment and labour issues. The partners are experienced at handling all issues of migration, including visas, work licences and permits, and residential permits. Dewit is also adept at drafting and reviewing collective and individual labour contracts as well as confidentiality and non-competition agreements. The dispute resolution team advises clients on labour and employment issues through contentious and non-contentious work.

Garrigues

A small but growing international firm, Garrigues enjoys major relationships with some large Chinese institutions and advises on the full range of labour and employment issues. The firm prepares all of the labour policies for the Bank of China, including contracts and the employee handbook, and provides general advice on labour issues.

This past year, Garrigues advised wind energy company Gamesa on its global employment incentive plan for the PRC. Garrigues has also advised telecom company Telefónica on its implementation of a global performance share plan in China.

Herbert Smith

Herbert Smith’s labour and employment practice advises financial institutions and corporates on employment issues relating to investigations, contract issues, terminations and disputes. The firm’s leading dispute resolution practice helps to protect clients’ interests across a wide range of labour and employment areas.

Hogan Lovells

Hogan Lovells’ employment practice for Greater China is largely based out of Hong Kong, where partners from the firm’s corporate and dispute resolution groups advise clients on contentious and non-contentious matters in China and Hong Kong. The group serves as a resource to advise the firm’s longstanding, established clients on their employment law needs.

Mallesons Stephen Jaques

Mallesons continues to advise clients on matters relating to PRC and Hong Kong labour and employment law. The practice claims to have witnessed Chinese companies and employees becoming bolder with employment law issues, and this has resulted in a greater amount of advisory work for the firm.

Mallesons recently represented an international charitable organisation on a disability and sex discrimination case, and settled the dispute under the Equal Opportunities Comission’s conciliation process. In 2010, the team advised Australia Post on its occupational health and safety procedures for its Chinese operations.

Herbert Smith is known as a strong contender when it comes to China focused equity capital markets transactions. The firm’s leading project finance and energy and infrastructure practices are a strong source of mandates, as is the firm’s solid relationships with underwriters. One client says: “In terms of technical and professional ability, it is very good. It is a great adviser to our business. In fact, it has been our company’s legal adviser since we went public. We have a great relationship with each other.”

This past year, partners Tom Chau and John Moore led the Herbert Smith team advising the joint sponsors, bookrunners and lead managers on the US$22 billion Agricultural Bank of China A and H share listing, which was the world’s largest IPO when it hit the market. As Asialaw Profiles went to press, Moore had resigned from Herbert Smith and is due to join Morrison & Foerster in Hong Kong later in 2011.

The Greater China M&A practice at Herbert Smith is recognised for its relationships with energy and natural resource companies, from which the team receives many major mandates. However, the firm advises clients on M&A deals across a diverse range of sectors.

Partner Karen Ip and her team are especially well regarded by clients. One client says: “The firm is very good, and has always been very responsive. In high pressure deal scenarios, where we need something not now but yesterday, it always come through for us.”

Another client says: “We have access to Karen all the time, any time. She is very clear, and I’m happy to say that there is very little ‘lawyer speak’. We always get to the point and what she tells us is in plain English, and Cantonese too!”

This past year, the M&A team represented China Shenhua Energy on its Rmb8.7 billion (US$1.3 billion) acquisition of a number of mining companies and assets from Shenhua Group.

Herbert Smith’s disputes practice in greater China is known for its unparalleled litigation prowess. Partners Mark Johnson, Gavin Lewis and Justin D’Agostino lead the dispute resolution team from Hong Kong, where they regularly act for multinationals and international financial entities. The firm also has a strong presence on the arbitration side, with D’Agostino leading major arbitrations at CIETAC and other international arbitration venues.

In one recent case, Herbert Smith’s litigation team advised UTFE as plaintiff in connection with a substantial claim for breach of a number of warranties against the vendor and its directors subsequent to the acquisition of a Hong Kong listed company. The HK$200 million matter comprises seven major claims.

The three-partner M&A team at Herbert Smith is led by James Robinson and has 24 dedicated specialists. It has sector expertise in a number of areas, such as energy, TMT, infrastructure, financial services and heavy industry. NTT Docomo, Mitsubishi Electric Corporation, JTB and Sumitomo Corporation are some of the clients who have recently instructed the team.

For example, Mitsubishi Electric engaged Robinson on its acquisition of German-headquartered manufacturing company Vincotech from private equity owner The Gores Group. This demonstrated the firm’s ability to act on multi-jurisdictional matters and advise Japanese corporations in their outbound deals.

“The firm has good experience in arbitration. In addition, it advises on how we should behave in business discussions involving possible disputes, and from practical point of view,” says one client of Herbert Smith. The firm’s reputation in this area is undisputed and the Tokyo office is no exception. The practice has continued to grow over the past year, with the promotion of construction expert Emma Kratochvilova to the partnership and the joining of two senior associates. The group has also been busy on more IP related cases since Frederick Chen’s joining in 2010.

Managing partner Peter Godwin, Dominic Roughton and David Gilmore are all well established, while the younger Gavin Margetson is building up his own name in the market as well. One client speaks highly of Godwin: “He is a stand-out professionally. I found him incredibly straight speaking. His advice always demonstrates an understanding of our business, and it is always practical and well put together.” An interesting case that has been keeping the team busy saw Godwin defend an auto manufacturer against parallel claims in Thailand and JCAA arbitration.

The14-lawyer team at Herbert Smith is co-headed by James Watson and Rebecca Major and is a recognised force in the energy and natural resources market in Japan. The firm is particularly strong in acting as counsel for developers and sponsors, and can count Inpex Corporation, Mitsui & Co, Japan Petroleum Exploration, Tokyo Gas and Itochu as some of its key clients. Major relocated from Paris in September 2010 to succeed former co-head of the practice David Clinch, who returned to London four months later.

Working closely with its respective teams in other offices, the team’s projects have a wide geographical spread. Sample transactions include Watson’s role in advising a Japanese company on the restructuring and consolidation of its interests in gas field developments and LNG projects in Africa and the Middle East. The firm’s Tokyo, Jakarta and London offices also coordinated when representing Mitsubishi Corporation on its acquisition of interests in an oil and gas field in Indonesia.

Herbert Smith’s intellectual property practice debuts in our rankings with solid client feedback and a portfolio of interesting work. In particular, the joining of Dr. Frederick Ch’en from Linklaters last year has boosted the group’s profile and capability to handle high-level contentious and non-contentious IP mandates. As the leader of the UK firm’s IP practice in Tokyo, Dr. Ch’en is praised by a pharmaceuticals client as having “the highest ability as a legal professional” and that “he had a clear grasp of the legal issues, the needs of the business and rendered extremely prompt and coherence advice”. A leading telecommunications company enlisted the firm to help it establish a world-wide patent licensing programme from scratch. In another highlight, the firm’s top-tier disputes practitioners have teamed up with the IP group to advise a premier Japanese technology company in a €400 million (US$560 million) patent licensing battle.

The arrival of project finance specialist Adrian Cheng in 2010 saw Herbert Smith increase its standing in the commercial banking space.

This year, the firm, led by Cheng, advised lenders BNP Paribas and Commonwealth Bank of Australia in negotiating and structuring an US$80 million secured borrowing base facility for Coastal Energy. The financing is in regard to the company’s interests in the Phu Hom and Bua Ban gas fields in Thailand.

In another highlight, Cheng represented lender BNP Paribas on a US$140 million secured acquisition bridge facility for Salamander Energy, a deal that required interpretation of both English and Singaporean law. Salamander Energy will use the financing to bolster its interests in the Bualuang field in the Gulf of Thailand.

The firm is also well regarded for its energy finance advice and development bank expertise.

Already housing of the larger and more established international teams in the region, Herbert Smith further bolstered its Southeast Asia practice this year with the addition of corporate associate Anna Morgan from Berwin Leighton Paisner and the relocation of senior associate Tom Platts from London.

Led by widely respected corporate lawyer and office managing partner Austin Sweeney, and partner Veronica O’Shea, the team focuses on energy and natural resources and has particularly strong experience on investment in, and outbound work from, Indonesia and Malaysia.

In one notable deal this year, O’Shea led a team of advisers assisting Rio Tinto in relation to the acquisition of an interest in the Sulawesi Nickel Project in Indonesia by Sherritt International by way of an earn-in and shareholders agreement.

The transaction involved marrying corporate Singapore law concepts and corporate structures to the commercial framework agreed between the parties and the underlying Indonesian project.

Herbert Smith’s team of specialist energy lawyers has expertise across the power, oil and gas, LNG and petrochemical sectors for borrowers and lenders. The firm is also noted among peers for its proficiency on clean energy and electricity. Leveraging the firm’s banking and finance expertise, the group picked up some interesting mandates this year. One highlight saw partner Adrian Cheng lead a team advising BNP Paribas and CBA on a US$80 million secured borrowing base facility for Coastal Energy in connection with its interests in the Phu Horm and Bua Ban gas fields in the Khorat and Songkhla basins offshore Thailand.

Herbert Smith is enjoys a stellar reputation in Thailand. While the firm has scaled back some of the practices in its Bangkok office, star partner Alastair Henderson continues to base his regional arbitration practice from the Thai capital. Henderson is known as a leading light in Asia when it comes to arbitrations in Singapore, representing multinational companies and other high profile clients. The firm’s Bangkok office also retains some capability on Thai litigation.