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GAR 100 - 9th Edition

Zhong Lun

18 February 2016

China’s top choice of local counsel in investment treaty disputes

People in Who’s Who Legal: 1
Pending cases as counsel: 21
Value of pending counsel work: US$1.5 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 was 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 who is currently 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 subcommission. Both Cao and Niu sit as arbitrators for various Asian institutions (Cao also sits on AAA-ICDR cases).

Network

In 2014, the firm opened new offices in Qingdao and Chongqing. Zhong Lun now has eight offices in mainland China (the others are in Beijing, Shanghai, Shenzhen, Guangzhou, Wuhan and Chengdu) as well as other offices in Hong Kong, Tokyo, London and New York, which opened in 2013.

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); Shanghai Motors; Zhejang Tenglong Shipyard Company; and Chinachem Group.

Foreign 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 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 scored a major victory for a Luxembourg subsidiary of Invista in a landmark decision from the Chinese courts, convincing the court that a “hybrid” clause providing for arbitration at CIETAC under UNCITRAL rules was valid and enforceable. Invista commenced the hybrid arbitration in 2012 against Chinese petrochemical company Zhejiang Yisheng. Norton Rose Fulbright acted as Zhong Lung’s co-counsel in the case.

Zhong Lun represented Paul Y Construction (China), a Hong Kong property service provider, as respondent and counterclaimant in two consolidated arbitrations worth US$10 million before CIETAC’s South China subcommission 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 the 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. That claim was settled. The team also obtained a settlement for Zhejiang Fulida Company avoiding an HKIAC arbitration with a Canadian company.

As for court work related to arbitration, Zhong Lun obtained an order setting aside a Beijing Arbitration Commission award for Meibang Yalian, a Beijing-based real estate developer.

Recent events

In 2015, the firm topped a list of 15 Chinese firms announced by China as its preferred counsel in investment treaty matters.

Other ongoing cases include a US$40 million SIAC arbitration involving a Canadian recycling company; a US$129 million SIAC arbitration where the firm is representing a British Virgin Islands company against a Chinese state-owned enterprise; and a US$108 million HKIAC arbitration between a Chinese trading company and US$108 million HKIAC arbitration between a Chinese trading company and an Italian shoe company.

The firm welcomed partner Huawei Sun in Beijing. Sun previously practised at the Hong Kong and Beijing offices of Allen & Overy for seven years, where she managed the firm’s Chinese arbitration matters. She also serves on the CIETAC panel of arbitrators.

Client comment

Geraldine Lim, general counsel to Heineken, had occasion to use a Zhong Lun team led by partner Cao Lijun, and praises them for their ability to “keep the big picture in mind, including the practicalities of implementation.” The team was so convincing that they even managed to persuade the tribunal to visit a site locally. She also describes Cao as an “experienced arbitrator who knows the CIETAC system inside out.”

Jonathan Fung of Paul Y Construction (China), a Hong Kong-based engineering group, has been using Zhong Lun for real estate, construction and contentious matters in mainland China for a long time. “In 2010, the firm offered very professional and insightful legal advice in the first ever China-based arbitration case we were involved in,” Fung reports. “Zhong Lun gave excellent advice in the preparation of submissions and strategies, so that we knew exactly when and what details mattered throughout.”

Renn Shi, CEO of China’s HRS Wind Power Technologies, tells GAR that the firm represented the company in a SIAC arbitration relating to intellectual property infringement.

Shi praises the firm for providing the “right people with the right expertise at the right time.” He says that the firm excelled at teamwork and has high praise for Cao: “His expertise in the international arbitration process and procedure is top class. He showed us great leadership and organizational abilities and proved himself to be a high-level orator.”

Shi also describes partner Wang Bing as a “sharp-minded lady” with “excellent cross-examination skills.”

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