Cross-border dispute resolution is a not-so-new, but still emerging field.
In the context of the continuous and in-depth promotion of the “Belt and Road Initiative”, increasing number and faster pace of Chinese enterprises “going out”, as well as the rising uncertainty in the external situation, cross-border disputes have shown a “vigorous” trend of rapid growth in number, variety, and complexity.
Companies do not care about such a trend. Instead, they focus on how to cut paths through mountains and build bridges across rivers so as to pursue business success.
On June 9, 2023, on the 11th floor of Tower A of China World Trade Center, JT&N held a seminar on Cross-Border Dispute Resolution from a China-focused Perspective together with Wolters Kluwer. Chen YANG, Director of JT&N, senior partners Lan LI and Jun PENG, and consultant Tianyu ZUO took the stage one by one, sharing their experiences and answering questions for the participants from both macro and micro perspectives.
For the past 31 years, JT&N, with a strong background in foreign-related business, has always been praised in the field of cross-border dispute resolution. As a witness, participant, guardian, and leader of many important moments in the process of opening up, JT&N has not only handled a large number of benchmark trade remedies, antitrust, intellectual property, investment disputes, and other dispute resolution cases for enterprises, but also assisted the Chinese government to participate in hundreds of international dispute resolution cases and negotiations of many international economic and trade agreements.
In today’s fast-changing industry landscape, it is obvious that the time-honored firm is still firmly at the forefront of cross-border dispute resolution practice and even continues to lead changes in the industry’s development, relying on more than just early accumulation.
How can JT&N maintain its leading position in cross-border dispute resolution?
A tide of enterprises going abroad: An era of diversity that requires more attorneys’ participation
What was the overall situation of international trade and investment in 2022?
There are two aspects.
Optimistically, 2022 still saw growth momentum. According to CEIC data [1], China’s total foreign trade imports and exports have reached CNY 42.1 trillion in 2022, ranking as the world’s top goods trading country for six consecutive years. Among them, the export growth rate was 10.5%, significantly higher than the import growth rate of 4.3%, and the foreign trade surplus grew from CNY 4.3 trillion in 2021 to CNY 5.8 trillion.
At the same time, outbound investment has maintained steady growth, with the industry’s outbound direct investment increasing by 5.2% to CNY 985.37 billion in 2022, of which investment cooperation in countries along the “Belt and Road” has steadily advanced and accounted for a high proportion. Chinese enterprises are accelerating their overseas layout.
“Chinese enterprises’ trade and investment projects abroad have encountered great challenges due to pandemic resurgences, global economic downturn, and other factors. Many projects featuring longer execution cycles have also suffered disputes with their partners due to the changing economic situation. Undoubtedly, it can be said that cross-border disputes have ushered in a new round of relatively concentrated outbreaks.” Chen YANG, director of JT&N, said.
In this regard, JT&N came up with an idea. For large enterprises facing various cross-border dispute issues, especially central and state-owned enterprises, JT&N intended to make a special sharing by combining its rich experience in cross-border dispute resolution and the hot issues under the new situation, so as to help them better cope with and handle cross-border disputes.
This is the reason why JT&N held a seminar on Cross-Border Dispute Resolution from a China-focused Perspective.
As for highlights, the seminar itself was more pragmatic and “down-to-earth” in content. However, from the perspective of the current industry landscape, the seminar also reflected JT&N’s in-depth observation and consideration of the cross-border dispute resolution situation.
In Chen YANG’s view, Chinese law firms have made rapid progress in the area of cross-border dispute resolution in recent years:
For one thing, Chinese attorneys are improving their cross-border service capabilities and playing an increasingly important role in cross-border cases, featuring deeper case involvement and hosting. Moreover, they are active in international arbitration institutions and other platforms and no longer overly dependent on foreign attorneys or partner law firms as in the early days;
For another, Chinese companies have shown more trust in domestic attorneys after long-term cooperation, and Chinese attorneys in many cross-border dispute resolution cases, with the recognition of clients, have been able to lead and organize the entire team, including Chinese and foreign attorneys, to work together for clients.
In addition, domestic law firms are intensifying efforts in their overseas layout, with international dispute resolution hub cities such as Hong Kong, Singapore, and London receiving key attention. As for JT&N itself, it established a Hong Kong Office at the end of 2021 and plans to set up a branch in Singapore this year. As these regions are global hubs for cross-border dispute resolution and home to many arbitration institutions, Chinese law firms can better follow in the footsteps of Chinese companies in going global and provide them with more localized services.
But the challenges are coming faster.
For one thing, Chinese enterprises are speeding up their “going out”, rendering a larger amount of foreign trade and investment and a greater voice during the process. Does the status and voice of Chinese attorneys in cross-border dispute resolution matters match with it? There is still no answer to the question. The only certain thing is that Chinese attorneys will have to play a more important role in foreign-related matters in the future and act more as the “voice” of the legal team, in order to meet the increasingly complex needs of enterprises for foreign-related legal services.
Secondly, cross-border dispute resolution matters themselves are becoming more and more “complex”. The number of complex commercial disputes spanning multiple jurisdictions and involving multiple fields is rapidly increasing, and there are some signs of “convergence” among jurisdictions to deal with such situations. Singapore, for example, has set up an international commercial court with a certain “cross-border” nature, and Chen YANG himself is a registered attorney: “This trend of intermingling in a complex environment may also represent one of the directions of development of cross-border dispute resolution.”
Change or challenge, “attorneys should always follow the needs of clients. The more complex the actions of clients in cross-border trade and investment, the more we need to continuously refine our professional capabilities at the legal service level to respond quickly and efficiently when needed.” Chen YANG said.
Growing with China’s WTO Accession - JT&N’s Cross-border Dispute Resolution Path
As one of the leaders in the field of cross-border dispute resolution, JT&N is confident enough to rise to the challenge.
Cross-border dispute resolution has always been one of the vital professional cards of JT&N. The business card is the outcome of favorable timing, geographical and human conditions.
In 2016, the People’s Daily reported on JT&N’s international trade team on the occasion of the 15th anniversary of China’s accession to the WTO under the headline “Growing with China’s Accession”. This title is apt to describe this “national team” that has repeatedly assisted the Chinese government in foreign-related controversies. From the earliest involvement, to step-by-step growth and to nowadays, in response to new changes in the industry, JT&N has always kept pace with Chinese companies.
Early Exploration: Embedding the Cross-border Dispute Resolution Gene
Back in 1992, when the firm was founded, JT&N handled a considerable number of foreign investment legal matters. In the same year, the People’s Republic of China-United States: Memorandum of Understanding Concerning Market Access was reached, and the process of China’s rejoining the GATT has been accelerating.
From 1997 to 1998, the bilateral agreements between China and New Zealand, South Korea, and many other countries were completed or nearing completion, and the three principles were proposed to bring the “accession” closer and closer. Perceiving this trend, JT&N has also started to consciously build its cross-border dispute resolution features by relying on anti-dumping and countervailing cases.
In 2001, China officially joined the World Trade Organization. The WTO framework has brought about a richer and more diverse and rapidly growing trade and investment landscape, which in turn has led to more trade disputes and frictions - and Chinese law firms are increasingly involved in all types of cross-border dispute resolution matters.
JT&N, with its long-term accumulation, soon became one of the leaders. In the first anti-dumping case in China after the “WTO accession”, JT&N attorneys represented the Chinese government in the legal defense of market economy status, assisted the Chinese auto windshield industry in the non-damage defense, and finally helped the Chinese industry to obtain the market economy status treatment in the anti-dumping investigation for the first time in the whole industry.
As a result of our long-term service to government enterprises, clients have been able to achieve optimal results in many foreign-related disputes, and JT&N has been able to establish its influence in areas such as WTO dispute resolution. Since then, JT&N has steadily followed the pace of enterprises going abroad and continued to consolidate and develop its service capabilities in the areas of export control, commercial litigation and arbitration, investment arbitration, and other foreign-related disputes.
To date, JT&N remains one of the most represented Chinese firms in cross-border legislative and dispute resolution projects and one of the most represented Chinese firms in filing a lawsuit against trade remedy investigations.
“Mastering a Variety of Skills While Specializing in One”: Building Cross-jurisdictional and Cross-legal Region Service Strengths
“From WTO dispute resolution, FDI, and IP rights to today’s foreign-related dispute matters covering all aspects of the international sale and purchase of goods, admiralty, and maritime affairs, customs, supply chain finance, and investment arbitration, the development of JT&N’s cross-border dispute resolution practice has followed the overall route of Chinese enterprises’ going abroad, and has continuously adapted to the actual needs of Chinese enterprises going abroad,” Chen YANG said.
This main line of development has established JT&N’s business characteristics of cross-border commercial dispute resolution around Chinese enterprises’ investment and trade and has also driven JT&N to build up a “Mastering a Variety of Skills While Specializing in One” service team with the ability to provide cross-border dispute resolution for clients in complex environments.
The “Mastering a Variety of Skills While Specializing in One” refers to the business feature of providing comprehensive services to clients in cross-border dispute resolution from a certain segment, and also includes the ability to help clients handle dispute resolution cases across multiple jurisdictions as a Chinese practitioner. This is an urgent requirement for attorneys to enhance their service capacity in current complex commercial disputes.
For example, if a company established in Cayman controls a Chinese operating entity through a Hong Kong SPV and the company is listed in the U.S., the dispute may involve Cayman proceedings, Hong Kong proceedings, China Mainland proceedings, and U.S. proceedings. To discuss and develop a holistic legal strategy in this situation, it is not enough to understand the legislation and practice of one’s jurisdiction, especially when Chinese attorneys are in a dominant position, one must also have some understanding of the laws and procedures of other jurisdictions in order to better communicate and collaborate with peers to provide comprehensive legal services to clients.
This ability to smoothly communicate and coordinate across legal fields and jurisdictions has always been the strength of JT&N and has helped JT&N successfully handle countless complex cross-border dispute cases.
In-depth Intervention: Think Beyond Enterprises’ Expectations and Seek the Optimal Results
“In the process of providing cross-border dispute resolution services to enterprises in recent years, we found that the awareness and management ability of enterprises for complex cross-border dispute resolution cases need to be improved,” Chen YANG said. This is also the theme of his sharing in the seminar - how to manage cross-border dispute resolution cases well.
A complex cross-border dispute resolution case often spans several years to decades, involving several jurisdictions, and the whole process may require the organization of dozens or hundreds of attorneys and experts from different regions and fields to provide services for the case. It is difficult to make this large team operate effectively and help enterprises achieve better results.
If the team of Chinese attorneys providing services for enterprises has strong project management capabilities, it can help enterprises to set up the most relevant team of attorneys at the lowest possible cost, and facilitate efficient communication and interconnection during the process. In this way, foreign attorneys can understand exactly the commercial demands of clients, thus allowing clients to obtain a better service experience and ideal commercial results.
JT&N is following the approach. In actual cases, JT&N attorneys often plan and manage the project for clients in accordance with the client’s objectives and case characteristics. For example, cost management has always been a pain point for Chinese enterprises. As they do not understand foreign judicial procedures, and often have no control over the content and efficiency of attorneys’ work and their bills, they tended to choose attorneys with lower rates, but obtained lower-than-expected service quality. On such occasions, Chinese attorneys can combine their experience to help clients choose the most suitable foreign attorneys. Even though some attorneys’ hourly rates may seem high, they may render more efficient services because of their superior ability and case similarity. In such circumstances, clients may enjoy lower costs and better services. “By nature, case management is not the essential issue of legal disputes, but whether or not case management can be done well will lead to a completely different case outcome and client service experience.”
With the further deepening of the opening-up strategy, Chinese attorneys are playing an increasingly important role. “Chinese attorneys in cross-border dispute resolution in the future will not just take on supporting functions, but will inevitably act as an extension of the legal department of Chinese companies, playing the role of overall planning and team leader.” As for the future development trend of cross-border dispute resolution attorneys, YANG analyzed, “it is somewhat similar to ‘engineering turnkey’, but if we want to better serve Chinese enterprises, this is the positioning and mission we should achieve.”
Younger and More Systematic - A Long-term Strategy to Raise a High-quality Team
There is a phenomenon that when a law firm reaches the mid-term “leadership change” stage of development, the veteran attorneys retired and the initial competitive businesses that lay a solid foundation for the firm will be taken over by other rising law firms. In extreme cases, the firm may even lose its former service capacity due to the talent gap.
But for JT&N, especially for the cross-border dispute resolution team, which requires high-quality talents, the business strength, and influence have instead continued to rise steadily.
Taking this seminar as an example, besides Chen YANG sharing case management, several other JT&N cross-border dispute resolution attorneys also shared their professional, refined, and flexible knowledge and experience to participants from different topics such as contract risk regulation, property cross-border preservation and enforcement, and issues on the relationship between the state and state-owned enterprises.
Attorney Jun PENG, a senior partner who analyzes the relationship between state-owned enterprises and the state, has more than 20 years of cross-border dispute resolution experience, and is also the first Chinese attorney to participate in WTO panel arguments and represent the Chinese government in court defenses, and is often ranked as the top-rated Chinese attorney in international trade by Chambers and Partners, an international rating agency;
Attorney Lan LI, a senior partner who shared the risk norms of foreign-related contracts, has long focused on international commercial arbitration and was named one of the Top 10 Outstanding Young Attorneys (2017) by CLESS and one of the A-List 2022 by China Business Law Journal.
Attorney Tianyu ZUO, the consultant of cross-border property preservation and enforcement issues, has worked in foreign firms for many years and is licensed to practice law in China and the United States, and has long been active in many international arbitration institutions such as HKIAC, SIAC, and ICC. Moreover, he has been rated as a recommended attorney in the field of dispute resolution by Legal 500 for many consecutive years.
It is worth mentioning that it is also through the efforts of JT&N partners, including Jun PENG, Lan LI, and Yinhong LIU, that FDI Moot, one of the world’s top three moot court competitions, was successfully introduced to China and landed in Shenzhen in 2020.
What is even more remarkable is that the above attorneys include veterans who have been practicing for more than 20 years, as well as “new generation” important forces who started practicing after 2010 and are now the backbone of the team. The entire JT&N cross-border dispute resolution team features a reasonable age structure and has achieved a clear “echelon”.
The cross-border dispute resolution team of JT&N boasts a pool of talents, coupled with Chen YANG, one of the first attorneys in China to engage in international trade and WTO dispute resolution practice, and the firm’s director who has worked on many milestones cross-border dispute resolution cases.
Compared to domestic dispute cases, cross-border dispute resolution has a stronger and more complex adversarial nature, requiring attorneys to have multi-lingual skills and cross-cultural communication abilities. In addition, in order to better coordinate with overseas arbitration institutions and attorneys, cross-border dispute resolution attorneys also need to gain a good understanding of the cross-border legal system involved.
“This means that cross-border dispute resolution attorneys must be versatile talents,” Chen YANG said, “Considering the complex international relations and judicial environment in cross-border matters, cross-border dispute resolution attorneys need to have a more macroscopic vision and comprehensive ability, and preferably have a certain grasp of the international political and economic environment, so that they can handle cases properly and skillfully.”
In other words, on the basis of screening outstanding talents, the cross-border dispute resolution team needs to go further and “select the best from the best” and “train the best talents”.
How to do it? JT&N has given three keywords: youthfulness, mastering a variety of skills while specializing in one, and cross-discipline resource integration.
Youthfulness
Youthfulness is a principle that JT&N has always adhered to.
Compared with senior attorneys, the new generation of young attorneys are generally better educated, have stronger foreign language skills, and have a broader perspective. After a few years of practical training, these young attorneys are likely to achieve transformation and become the representatives of Chinese attorneys in the international arena.
“Young attorneys who are still inexperienced today will become experienced and energetic senior attorneys with a strong desire for further progress in 5-10 years, which means that investing in young attorneys is a long-term investment behavior.” Chen YANG said, “JT&N has been in line with the goal of long-termism in talent training. We have spent the past 20 years building a team of cross-border dispute resolution attorneys with good strength in the current domestic and even international arena. To achieve the goal of growing together with Chinese enterprises in the future and playing a more significant role on the world stage, we need to intensify our layout in advance.”
This is JT&N’s interpretation of “youthfulness”, and also the specific embodiment of JT&N’s “steady and far-reaching” progress, that is to become an enduring, strong, and famous brand.
Mastering a Variety of Skills While Specializing in One
The importance of “mastering a variety of skills while specializing in one” in handling cross-border dispute resolution cases has been mentioned above. In the area of human resources training, JT&N aims to take measures to cultivate young attorneys from all aspects, thereby improving their comprehensive skills and searching for more new talents. Cultivation measures are mainly taken in the following aspects:
The first one is skills training, which develops young attorneys’ professional skills through competitions and activities. For example, the FDI Moot mentioned above. FDI Moot Shenzhen 2023 will be held for the fourth time in August this year and will continue to be jointly organized by JT&N and the Shenzhen Court of International Arbitration. In addition, JT&N is the title sponsor of the “CIETAC Cup” qualifier in China for the Willem C. Vis Moot (“Vis Moot”), one of the three largest moot court competitions in the world.
The second one is practice, where young attorneys can grow quickly by getting involved in high-end and large-scale practice cases. Young attorneys should be able to participate not only in litigation and arbitration, but also in cross-border investment, export control, compliance, and other related matters. They should be able to participate in trials not only in China, but also in other jurisdictions. JT&N encourages young attorneys to participate in some important cases to practice their skills, even if their participation does not bring any economic benefit. Of course, JT&N will strictly control the quality of the cases at the same time;
The third one is foreign exchange, which provides young attorneys with more opportunities to communicate with outstanding foreign attorneys. JT&N specifically requires outstanding domestic and foreign attorneys among its partners to unreservedly train JT&N’s young attorneys in practice in accordance with the requirements of their own teams.
The above-mentioned training activities cover many areas and different forms, with the aim of helping young attorneys to strengthen their skills in all aspects and to grow into truly complex and comprehensive talents in the field of cross-border dispute resolution.
Cross-field Integration of Resources
With the increasing opening to the outside world, the partners of JT&N have gradually come to a consensus that the demand for legal services in cross-border dispute resolution will inevitably increase in the future and that clients will become more demanding.
For this purpose, a large and professional team of cross-border dispute resolution covering multiple segments and composed of multiple types of interdisciplinary talent was created in 2018 and has been operating and growing ever since. They also communicate and collaborate with attorneys in the appropriate practice group when they encounter difficult and complex cases across practice areas and industries.
Take a complicated real estate dispute as an example: After many rounds of communication between the attorney and the client of a dispute case, the client still felt that there was something wrong with the understanding of the business logic but did not know how to “translate” it to the attorney in legal language. As a result, the attorney of the cross-border dispute resolution case worked with the attorney engaging in the field of real estate mergers and acquisitions. They spent two nights figuring out the whole logic, and, in the end, they understood the client’s business considerations and architectural design, so that the bridge of communication was unobstructed.
Currently, JT&N is more actively promoting the integration of resources across fields and industries among the firm’s business groups. “We have organized a wide range of internal communications, exchanges and seminars, including the creation of dedicated community platforms to facilitate communication between different areas of expertise.” Chen YANG said, “As we become more familiar with each other, we will have a higher level of trust and tacit agreement in cross-field cooperation, and of course, our business cooperation will become more harmonious.”
Chinese attorneys Accompany Chinese Companies
2300 years ago, Xun Zi wrote a sigh in his book Self-Cultivation: “Even the shortest journey can’t be finished without taking the first step. Even the most trivial task can’t be completed without taking action.”
After 2300 years, many people use a variation of this phrase to encourage themselves: “The road may be long, but walk it and you will get there.”
Step by step over the past 20 years, Chinese attorneys have made great progress in cross-border legal matters.
However, if we look at the global legal services market, the power of Chinese attorneys is still relatively weak, and the market is still dominated by European and American law firms. At a time when Chinese companies are overcoming all obstacles, Chinese attorneys must work hard and take on important tasks.
In terms of client service, Chen YANG has always stressed the importance of “professionalism” in the firm: “As a legal professional, the most important thing is always to meet the business needs of clients with the most professional legal services, whether the clients are Chinese enterprises or foreign enterprises.”
At the same time, however, he has also been very much in agreement with the “patriotism” of Chinese attorneys: “Although we are in the business of helping Chinese companies do business overseas, we are still representing Chinese companies and Chinese attorneys. For attorneys involved in cross-border dispute resolution, this is not only their responsibility and duty, but also an honor of which they should be proud.”
Chen YANG believes that professionalism and patriotism are the labels to which JT&N’s attorneys involved in cross-border dispute resolution should aspire. However, if we look at the legal profession as a whole, this is not necessarily the common goal of all attorneys who deal specifically with foreign affairs and have dreams. It is just like the name of JT&N: Perseverance and enthusiasm, working hand in hand to make dreams come true. Only with perseverance and enthusiasm can we work together to achieve the ideal future.