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GAR 100 - 11th Edition

Zhong Lun

04 April 2018

Successfully defended China at ICSID

People in Who’s Who Legal 1
People in Future Leaders 1
Pending cases as counsel 40
Value of pending counsel work US$2.8 billion
Treaty cases 1
Current arbitrator appointments 5 (of which 0 are as sole or chair)
Lawyers sitting as arbitrator 2

Zhong Lun was founded in 1993 as one of China’s earliest private partnership law firms. Since then it has grown from a single office in Beijing to one of China’s three largest firms. It has an international arbitration group full of English-speaking lawyers, which is part of the firm’s wider dispute resolution practice.

In the early days, this group focused on real estate and construction arbitrations at CIETAC, the Beijing Arbitration Centre and some overseas fora. As the firm has developed, the practice has grown and now handles disputes over joint ventures, equity transfer, international sale of goods, IP licensing, shipbuilding, banking and finance, distri­bution, energy, media and telecoms.

The dispute resolution department is headed by Yuming Liu, who worked as a Chinese Supreme Court judge for over 10 years before joining private practice, and has experience dealing with high-profile commercial lawsuits and enforcement applications before the courts. He also sits as an arbitrator at CIETAC and the Beijing Arbitrator Committee.

The head of the arbitration practice is Lijun Cao, a New York and China-qualified lawyer who worked with CIETAC for many years and is a member of the SIAC executive committee responsible for revising the institution’s rules. Other major partners include Lei Niu, a former deputy secretary general of the China Maritime Arbitration Commission’s Shanghai sub-commission, and New York-qualified Huawei Sun. Both Cao and Niu sit as arbitrators for various Asian institutions (Cao also sits on AAA-ICDR cases).

The firm’s eminence in Chinese arbitration was recognised when it picked up an award at the GAR Awards ceremony in Shanghai in 2016.

Network

Zhong Lun has eight offices in mainland China (Beijing, Shanghai, Shenzhen, Guangzhou, Wuhan, Chengdu, Qingdao and Chongqing), and others in Hong Kong, Tokyo, London, New York, Los Angeles and San Francisco.

Who uses it?

Domestic clients include Chinese state-owned electrical supplier Shandong Luneng; Dongfang Electric; the New York Stock Exchange listed CDEL; Paul Y Construction (China); Sinosure; Shanghai Motors; Zhejiang Tenglong Shipyard Company; and Chinachem Group. The Chinese government is a client at ICSID (see ‘Recent events’).

Outside China, clients include US’s Intel Security Group; InterContinental Hotels; Honeywell; Lacoste; BNP Paribas; Heineken-Asia Pacific Breweries Limited, which is engaged in a series of disputes in relation to a Chinese joint venture; and US-owned Invista Technologies, in a dispute arising from agreements between the client as licensor and a Chinese company as licensee.

Track record

In 2014, the firm won a landmark decision from a Chinese court for a Luxembourg subsidiary of Invista. The court found that a “hybrid” clause providing for arbitration at CIETAC under UNCITRAL rules was valid and enforceable. Norton Rose Fulbright acted as Zhong Lung’s co-counsel.

Zhong Lun defended a Hong Kong property service provider as respondent in two consolidated arbitrations worth US$10 million before CIETAC’s South China sub-commission in Shenzhen, succeeding on most counts.

It also knocked out claims brought against Shanghai Motors in an arbitration before a CIETAC Shanghai tribunal over a long-term auto parts sale contract (before CIETAC Shanghai broke away to become SHIAC).

Other successes were for Zhejiang Tenglong Shipyard as claimant in a London Maritime Arbitration Association case against Russian vessel owners; and Canada’s Absolute Energy in an international sale of goods dispute against a US subsidiary of a Chinese state-owned company.

The firm represented Puyang Steel Company as claimant in a CIETAC Beijing arbitration against an international air products company worth US$280 million. The claim was settled.

Recent events

Zhong Lun paired with Dentons to defend the Chinese government in an US$80 million ICSID claim brought by South Korea’s Ansung Housing. The case – concerning the failed construction of a golf course and condominium – was dismissed as “manifestly without legal merit” in March 2017. It is the first ICSID case against China to reach a final award.

The firm represented a leading Canadian engineering firm in a US$561 million SIAC dispute with Chinese state-owned enterprise. The case settled in December 2016.

A Hong Kong company used it for a US$60 million arbitration with a Dutch company over a Chinese-registered joint venture. The case was under UNCITRAL rules and administered by the HKIAC.

In two recent CIETAC arbitrations, the firm represented an Asian private equity firm in a US$70 million dispute over a put option; and another private equity firm in a US$55 million dispute over a share transfer agreement.

In the past year, Bing Wang in the Beijing office was promoted from non-equity partner to equity partner, and Changyu Fu joined the firm as equity partner.

Client comment

Geraldine Lim, general counsel to Heineken, had occasion to use a Zhong Lun team led by partner Lijun Cao. She praises them for their ability to “keep the big picture in mind, including the practicalities”. Cao is an “experienced arbitrator who knows the CIETAC system inside out.”

Renn Shi, CEO of China’s HRS Wind Power Technologies, says the firm provides “the right people with the right expertise at the right time”. Cao is “top class” and “a high-level orator” while partner Bing Wang is a “sharp-minded lady” with “excellent cross-examination skills”.

Jacky Huang, legal director at Accor China, says the company has used Zhong Lun for the past 10 years with “good results”. Lijun Cao and Lihua Wang are particularly impressive, she adds.

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