17 Mar 11 New Legislation Regulating Online Gambling and Betting Services
On April 6, 2010, the French Parliament passed new legislation to regulate online gambling and betting services. This new law consists in ending the state monopoly on on-line gambling thus enabling private operators to offer their online poker, sports and horse racing betting and gambling services through a licensing procedure. The main purpose of this law is to have transparent, reputable and honest operators providing players with a safe and secure online gambling and betting experience.
Although this e-gaming law was referred to the French Constitutional Council on April 13, 2010 for a control of its constitutionality, the French Constitutional Council upheld the entire law in a decision dated May 12, 2010, considering that (i) it was not competent to assess compliance of the new law with EU rules; (ii) the opening up to competition of on-line gambling services is regulated since it is subject to a prior licensing procedure carried out by a regulating authority; (iii) the prohibition, exception and exclusivity principles justifying the state monopoly on on-line gambling are not fundamental principles acknowledged by French republican laws that could be raised as grounds to the unconstitutionality of the law; and that (iv) the law does not disregard public interests since a regulating authority shall grant licenses and that measures have been adopted to hunt down misdemeanours, combat gambling addiction and money laundering, and regulate advertising on the legal offer of on-line gambling.
Following this decision, the e-gaming law was promulgated on May 12, 2010. The implementing decrees as well as a ministerial order approving the required specifications issued by the regulating authority in view of the private operators’ applications for the license were also all published on May 12 and 14, 2010. Therefore, the legal framework necessary for the opening up to competition of on-line gambling services is now set, although some e-gaming actors regret that the new law seems to ignore the cross border nature of the market forcing well-established EU operators to comply with French requirements and constraints and exposing players to unregulated non-EU operators.
The new law entered into force just in time before the launch of the FIFA World Cup in South Africa on June 11, 2010. To date, about a dozen applications have already been filed.
For more information please contact Bertrand Liard (bliard@whitecase.com) or Clara Hainsdorf (chainsdorf@whitecase.com).
This article is provided for your convenience and does not constitute legal advice. It is prepared for the general information of interested persons. This article should not be acted upon in any specific situation without appropriate legal advice, and it may include links to websites other than the White & Case website. White & Case LLP has no responsibility for any websites other than its own, and does not endorse the information, content, presentation or accuracy, or make any warranty, express or implied, regarding any other website.
White and Case is one of the top international law firms with 36 offices in 25 countries around the world. White and Case law firm has the expertise and represent in almost all areas of law from international arbitration and cross – border transactions to local US and English laws.
17 Feb 11 The SEC Puts on Hold its Proxy Access Rules
On September 29, 2010, the Business Roundtable and the US Chamber of Commerce filed a lawsuit challenging the final rules issued by the US Securities and Exchange Commission (SEC) on proxy access. The plaintiffs also requested that the SEC stay the effectiveness of the rules pending determination of the case.
On October 4, 2010, the SEC granted that stay. As a result, even if the US Court of Appeals for the DC Circuit court acts quickly and upholds the rule, the proxy access regime is unlikely to be in effect for the upcoming proxy season. In granting a stay of its rules pending judicial review, the SEC stated that “under all of the circumstances of this matter, a stay of Rule 14a-11 and related rule amendments is consistent with what justice requires [because] a stay avoids potentially unnecessary costs, regulatory uncertainty, and disruption that could occur if the rules were to become effective during the pendency of a challenge to their validity.”
The challenged rules, adopted on August 25, 2010, afford shareholders of public companies that have held more than a three percent stake for at least three years the right to use the company’s proxy materials to nominate their own candidates to the board of directors. The rules were to have become effective on November 15, 2010 and would have impacted the upcoming 2011 proxy season for many public companies. The stay applies to new Rule 14a-11 as well as to the amended Rule 14a-8, which would have allowed investors to submit for inclusion in a company’s proxy statement proposals that seek more permissive access procedures “because the amendment to Rule 14a-8 was designed to complement Rule 14a-11 and is intertwined, and there is a potential for confusion if the amendment to Rule 14a-8 were to become effective while Rule 14a-11 is stayed.”
This article is provided for your convenience and does not constitute legal advice. It is prepared for the general information of interested persons. This article should not be acted upon in any specific situation without appropriate legal advice, and it may include links to websites other than the White & Case website. White & Case LLP has no responsibility for any websites other than its own, and does not endorse the information, content, presentation or accuracy, or make any warranty, express or implied, regarding any other website.
This article is protected by copyright. Material appearing herein may be reproduced or translated with appropriate credit.
White and Case LLP is a leading international law firm , founded in New York in 1901,it has 36 offices in 25 countries around the world. With such a global presence the firm provides counsel and representation to a wide range of clients from state governments to multinational businesses and firms from construction companies to investment banks. White and Case law firm has the expertise and represent in almost all areas of law from international arbitration and cross – border transactions to local US and English laws.
Tags: global law firm, International arbitration, International Law Firm
28 Jan 11 NTA Amends Transfer Pricing Guidelines
The National Tax Agency has amended its transfer pricing guidelines to issue to its transfer pricing examiners concerning the implementation of Japan’s new transfer pricing documentation rules as well as examinations of transactions involving joint venture companies.
The guidelines continue to instruct the examiners to determine whether there are transfer pricing issues by reviewing various described documents, which now include the documents listed in the pertinent finance ministerial order as of April 1, 2010.
The guidelines also continue to remind examiners that if a taxpayer does not submit the required documents without delay, it shall be possible to apply the presumptive taxation rules or the similar enterprise investigation provisions (which can lead to the application of secret comparables) and they are required to explain these potential consequences to the taxpayer and record such explanations and the subsequent submissions.
However, the amended guidelines now instruct the examiners to request submissions by determining deadlines within a scope recognised to be necessary, and they are to allow for the time ordinarily necessary to prepare the submission based upon listening to the opinions of the taxpayer.
The amended guidelines state that, if the taxpayer itself has computed the arm’s-length price, the examiners are to study whether it is possible to calculate the arm’s-length price based upon the documents used by the taxpayer and to decide whether it is necessary to request the submission of additional documents. This suggests that, if the taxpayers’ original submissions are considered to be insufficient, the examiners should request additional submissions, rather than just decide that there has been a lack of compliance.
The amended guidelines also require the examiners to determine whether it is possible to calculate the arm’s-length price by studying the submitted documents comprehensively. This suggests that examiners are to evaluate the submitted documents on an overall basis to determine if it is possible to determine arm’s-length prices, rather than to immediately conclude that any failure to submit a document automatically results in a lack of compliance.
However, it is not clear how the above instructions will be applied in practice by particular examiners.
If examiners decide that it is not possible to calculate the arm’s-length price based on submitted documents and the presumptive taxation rules or similar enterprise audit provisions apply, the guidelines require that they explain the reasons to the taxpayer.
The guidelines also note that, in a case in which submitted documents were prepared based upon factors such as inaccurate information, the submission does not satisfy the requirements. In such case, the examiners are to request the submission promptly of documents prepared based upon accurate information. Inaccurate information is not defined, so this is left to examiners to determine.
For joint venture companies, the guidelines instruct examiners to sufficiently study the process by which prices were determined in negotiations based upon considering a number of situations. They note that when a taxpayer or its foreign related person had been established by two or more persons, in some cases a person other than a party to the foreign related transaction, such as an investor, was a party to the negotiations. In these situations, the negotiations may have been carried out taking into account the arm’s-length principle. However the guidelines also instruct examiners that the existence of certain described facts such as intense negotiations or participation by a third party does not constitute a basis for concluding that a foreign related transaction has been conducted on conditions the same as those as an unrelated person transaction.
White and Case LLP is a leading international law firm with lawyers in 36 offices in 25 different countries. With a global presence the firm provides counsel and representation to a wide range of clients from state governments to multinational businesses and firms from construction companies to investment banks. White and Case law firm have years of expertise and represent in almost all areas of law from international arbitration and cross – border transactions to local US and English laws.
Tags: global law firm, International arbitration, International Law Firm
30 Dec 10 Drafting and Launching a Multinational Employer’s Global Code of Conduct
According to the International Labour Organisation, “corporate codes of conduct do not have any authorized definition…. [T]here is a great variance in the way these statements are drafted.” Indeed, “code of conduct” is not a term of art, but is merely a label affixed to a range of corporate and non-governmental-organization policies.
Most major multinationals, particularly those based in the US, seem to have issued a global conduct code that spells out certain rules applicable to their worldwide operations. These global codes of conduct vary substantially in both purpose and content. Moreover, the focus and content of these codes differs widely. But global codes of conduct do not always do what their issuers intend.
Many corporate policies called “codes of conduct” have little to do with employment relationships: There are professional-association antitrust compliance codes of conduct, environmental-protection codes of conduct, and advisory codes of conduct on topics like intellectual property and computer programming. These codes – while vital – are only loosely connected to global efforts at legal and ethical human resources compliance.
Anchoring the code of conduct discussion in the international employment context, there are two very different types of codes to distinguish: External supplier codes chiefly protect employees working for a multinational’s suppliers from so-called “sweatshop” conditions; whereas internal ethics codes chiefly impose compliance rules on a multinational’s own employees across its worldwide workforces. In one sense, these two global codes of conduct are opposites: External supplier codes seek to protect employees who are not on the code issuer’s payroll, while internal ethics codes seek to restrict (impose rules on) a code issuer’s own employees. Some multinational codes of conduct try to combine these two types of document, but effectively combining them is difficult because both the goals and the intended audiences differ.
As such, any multinational launching a global “code of conduct” should: first clarify which type of code it needs, then determine what the code of conduct should say, and finally implement the code properly across global operations. As such, part 1 of this article distinguishes the two types of codes of conduct, part 2 is a checklist of topics to address in an internal (“ethics”) code of conduct, and part 3 addresses the steps in properly launching a multinational’s internal code of conduct.
White & Case LLP is a leading international law firm founded in New York in 1901, with lawyers in the United States, Latin America, Europe, the Middle East, Africa and Asia. Among the first US-based law firms to establish a truly global presence, White & Case provide counsel and representation in virtually every area of law that affects cross-border business. The Firm’s lawyers have decades of experience in multijurisdictional issues in numerous legal systems, and have successfully guided businesses and top executives through the minefields of local, national and international labor and employment law regulations.
Tags: global law firm, International Law Firm, labor and employment law
18 Oct 10 DOL Publishes Model CHIPRA Notice
The Department of Labor (“DOL”) recently issued a model notice that can be used by employers to fulfill their notice obligations under the Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”). CHIPRA extended and expanded the Children’s Health Insurance Program (“CHIP”) to allow states to subsidize the premiums for employer-provided group health coverage for eligible children and their families. In addition to requiring group health plans to offer new special enrollment opportunities to certain employees and their dependents who are eligible for, but not enrolled in, a group health plan, CHIPRA also requires that employers offering such a group health plan, in states that provide subsidized premiums, to notify employees residing in each such state of the potential opportunities available in that state for premium assistance under Medicaid and CHIP for health coverage of the employee and/or the employee’s dependents.
Notice Requirements
CHIPRA requires that an employer provide notice of the potential opportunity for premium assistance to employees residing in states that provide premium assistance programs; however, the employer may send the notice to all employees, regardless of whether the employees’ state of residence offers such a program, for sake of administrative ease. Approximately 40 states offer one or more such premium assistance programs, including California, Florida, New Jersey, New York and Virginia.
The model notice issued by the DOL meets CHIPRA’s basic content requirements, including a very brief description of the premium assistance available and contact information for each state’s specific program descriptions, and may be used by employers nationwide. Employers may choose to modify or supplement the DOL’s model notice, but must still include the relevant state contact information as required by CHIPRA. The model notice issued by the DOL must be provided by the date that is the later of (a) the beginning of the first plan year that begins after February 4, 2010 or (b) May 1, 2010. Therefore, group health plans with a calendar plan year are required to provide the notice by January 1, 2011, while group health plans with a plan year beginning between February 4, 2010 and April 30, 2010, must provide the notice by May 1, 2010.
Employers are not required to send the CHIPRA notice separately; they may include the notice in a single mailing along with other plan-related materials, such as open enrollment materials or the group health plan summary plan description, so long as (a) such materials are provided by the notification deadline discussed above, (b) such materials are provided to all employees entitled to receive the CHIPRA notice and (c) the CHIPRA notice appears separately and in such a manner that employees receiving the notice could reasonably be expected to appreciate its significance.
The CHIPRA notice must be provided annually and free of charge; it may be sent by first-class mail or, alternatively, may be sent electronically to the extent the DOL’s electronic disclosure safe harbor rules are met. Failure to comply with CHIPRA’s notice requirements may result in penalties of up to US$100 per day, per violation, with respect to each affected employee.
Additional CHIPRA Requirements
Note that, in addition to CHIPRA’s notice requirement, CHIPRA also requires group health plans to provide, upon request, information about their benefits to state Medicaid or CHIP programs in order for states to determine whether premium assistance is a cost-effective way to provide medical coverage. Although the DOL has not yet released the model coverage coordination disclosure form that would satisfy such disclosure requirements, states may begin requesting such information beginning with the first plan year that begins after February 4, 2010.
Material appearing herein may be reproduced or translated with appropriate credit. Due to space limitations and the general nature of its content, this information is not intended to be and should not be regarded as legal advice.
White & Case LLP is an international law firm with a century of legal practice experience. As always, White & Case would be happy to discuss how the above CHIPRA notice and disclosure requirements affect your group health plan and how to implement a cost-effective strategy to meet the requirements. With over 65 labor, employment and immigration attorneys and professionals in New York, London and 26 other cities in 19 countries, their expertise allows for solutions that are tailored to different legal standards around the world. White & Case are constantly expanding their White Collar and litigation expertise by introducing new partners, such as Kenneth Caruso, to their worldwide offices.
14 Oct 10 White & Case Expands White Collar and Litigation Expertise With New Partners in New York and Paris
Global law firm White & Case LLP has expanded its market-leading white collar and litigation capabilities with the addition of partner Kenneth Caruso in New York and a seven-lawyer team, including partners Michel Beaussier and Isabelle Fenayrou-Degas, from the French specialist white collar firm Beaussier & Associés in Paris.
“We are delighted to welcome Ken, Michel and Isabelle, as well as the entire Beaussier & Associés team,” said George Terwilliger, head of White & Case’s Global White Collar Practice and former Deputy Attorney General of the United States. “These lawyers are a great addition for our clients who increasingly need the benefit of experienced judgment to address global investigations, enforcement actions and related civil claims.”
Caruso joins White & Case from Bracewell & Giuliani LLP, where he was a partner in the firm’s litigation and international business practice in New York. He has more than 30 years of private and public legal experience, including serving as Assistant US Attorney for the Southern District of New York.
Caruso’s practice focuses on civil and criminal litigation and investigations involving international and transnational matters, primarily for financial institutions both in the United States and worldwide. He advises clients on internal corporate and cross-border asset recovery investigations relating to the proceeds of fraud, insolvency, money laundering and commercial bribery, and he has appeared in numerous international criminal matters and related civil litigation, including cases arising under the USA PATRIOT Act, US Treasury Office of Foreign Assets Control regulations, the Foreign Corrupt Practices Act, the Racketeer Influenced and Corrupt Organizations Act, the Alien Tort Statute, the Anti-Terrorism Act and federal export control laws.
Earlier in his career, Caruso served as Assistant US Attorney for the Southern District of New York, Special Assistant to former Associate Attorney General Rudolph W. Giuliani and Deputy Associate Attorney General, a role in which he helped supervise and coordinate the US Justice Department’s Criminal Division, US Attorneys, Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Prisons and US Marshals Service.
In Paris, partners Michel Beaussier and Isabelle Fenayrou-Degas join White & Case and bring with them five additional lawyers comprising the white collar and litigation boutique Beaussier & Associés. With their arrival, the Paris dispute resolution team now stands at 10 partners, six counsel and more than 30 associates.
“Michel and Isabelle and their team command a high reputation in the French legal market as leading practitioners in the white collar, criminal law and contentious regulatory fields, advising leading French and international banks,” said John Willems, head of White & Case’s Disputes Practice in Western Europe, Middle East and Africa. “We could see immediately the parallels between their business and our own: we share many of the same clients and their arrival brings specialist expertise in this increasingly important area for multinational businesses.”
Beaussier is a senior white collar lawyer, with more than 30 years’ experience. He has a leading reputation in the French legal market for criminal and bank regulatory matters. He regularly teaches and speaks on white collar crime issues and banking law and has written extensively about the topic, including co-authoring the 2010 book Money Laundering and Terrorism Financing – Analysis and Practical Implementation of the Third Directive.
Fenayrou-Degas is a highly respected white collar lawyer who represents banks and corporations in criminal and regulatory proceedings. She has previously held posts as a high-level criminal magistrate, the Permanent Rapporteur to the Competition Council in France and head of the Regulations Office of the French Ministry of Justice.
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About White & Case
White & Case LLP is a leading global international law firm with lawyers in 36 offices in 25 countries. Among the first US-based law firms to establish a truly global presence, we provide counsel and representation in virtually every area of law that affects cross-border business. Our clients value both the breadth of our global network and depth of our US, English and local law capabilities in each of our regions and rely on us for their complex cross-border transactions, arbitration and litigation provided by our global practices.
12 Aug 10 Prosecution for Attempted TARP Fraud
The focus of investigators and prosecutors in exposing fraudulent criminal activity related to federal government bailout efforts has resulted in the first criminal charge for attempting to defraud the Troubled Asset Relief Program (“TARP”).
On March 15, 2010, Charles J. Antonucci, Sr., former President and Chief Executive Officer of a bank in New York City, was arrested and charged with, among other unlawful conduct, making and causing to be made false statements “in connection with [a bank's] application for an [approximately US$11 million] investment from the Capital Purchase Program of [TARP].” The federal false statements statute covers statements made in connection with TARP applications, as the statute broadly proscribes false statements made “in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States.” Such jurisdiction can include state agencies receiving federal support, and false statements to officials of those state agencies receiving federal assistance are federal crimes even if the person making the false statement was unaware of the federal assistance. The criminal complaint also charges Antonucci with federal mail fraud in connection with the submission of the application via the US Postal Service.
According to a Department of Justice press release, Antonucci’s case represents the first instance of a criminal charge for attempting to defraud TARP. Notably, the bank allegedly voluntarily withdrew the TARP application on which the government based the charges in February 2009, after the Federal Deposit Insurance Corporation (“FDIC”) advised the bank that its application would not be recommended for approval.
Agents of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) participated in the investigation, combining the SIGTARP’s substantial regulatory resources with those of several other federal and state agencies. In discussing Antonucci’s case, SIGTARP Neil M. Barofsky stated:
This case should stand as a stark warning to would-be wrongdoers that if you attempt to profit criminally from this historic program, SIGTARP and its law enforcement partners will work tirelessly to ensure that you will be caught, you will be charged, and you will be brought to justice.
Antonucci’s case is just the latest example of the federal government’s aggressive use of its broad regulatory authority to investigate and prosecute financial crimes. Antonucci’s prosecution results from the increased coordination of enforcement resources possible through the federal Financial Fraud Enforcement Task Force (“Task Force”), which President Obama established in November 2009. The efforts of the Task Force and the investigative resources of SIGTARP are examples of the federal government’s commitment to “wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.” As The Wall Street Journal recently noted, “regulators are ratcheting up their efforts to hold bank executives responsible as more financial institutions succumb to bad real-estate loans and other problems.”
In this regulatory environment, recipients of—and even applicants for—TARP and other federal funds continue to be well advised to consider the broad regulatory and investigative authority associated with federal funds and to carefully consider any statements made to federal agents related to TARP funds. In addition to the false statements and mail fraud criminal risks apparent in Antonucci’s prosecution, the risk to TARP recipients from False Claims Act whistleblower allegations, see White & Case’s prior advisory, remains. Additionally—as yet another example of the risks of requesting federal assistance—on March 15, 2010, the Recovery Accountability and Transparency Board (“RATB”) issued its Quarterly Report to the President and Congress: Insight and Information on the Recovery Board’s Operations through February 2010. In the report, the RATB disclosed that it and the relevant Inspectors General have received 1,771 complaints related to the US$787 billion in spending under the American Recovery and Reinvestment Act of 2009. Those complaints, through February, resulted in 49 referrals to the Department of Justice, of which the DOJ accepted 43 for criminal prosecution. As previously noted in our prior client alert taking into account the aggressive regulatory stance of federal agencies continues to be wise practice when applying for or utilizing federal funds.
This article is provided for your convenience and does not constitute legal advice. It is prepared for the general information of our clients and other interested persons. This article should not be acted upon in any specific situation without appropriate legal advice, and it may include links to websites other than the White & Case website. White & Case LLP has no responsibility for any websites other than its own, and does not endorse the information, content, presentation or accuracy, or make any warranty, express or implied, regarding any other website.
This article is protected by copyright. Material appearing herein may be reproduced or translated with appropriate credit.
White & Case LLP is a leading international law firm with more than 2,000 lawyers in five continents. Specialists in a range of practices including the white collar practice which offers clients expertise in dealing with government investigations and enforcement matters.
06 Jul 10 LCIA India: A New Dawn for Indian Arbitration
The absence of credible, efficient Indian arbitral institutions has long been perceived to be a major drawback to arbitration in India. In April 2009, the London Court of International Arbitration (LCIA) launched its India centre in an attempt to plug this gap. ‘LCIA India’ seeks to provide world-class administration of arbitrations in India in an accessible manner and at competitive rates. Located in New Delhi, LCIA India is incorporated in India, and is staffed with a local registrar and counsel. The rates—both for arbitrators and administration—are not yet available, but are expected to be lower than those charged by the LCIA in London.
Its opening is a positive development, not least because there has been an urgent need for arbitral institutions to play a greater role in expediting the conduct of arbitrations within India. The centre should help enhance the credibility of institutional arbitration in the eyes of the Indian judiciary and among arbitration users in India. Although not an immediate solution to all of the problems encountered when arbitrating within India, it is certainly a step in the right direction.
Pitfalls associated with Indian arbitration
Given the endemic delays associated with Indian courts, litigating in India has never been an attractive option for corporate entities seeking speedy resolution of their disputes. At present, there is a backlog of almost 30 million cases in the Indian judicial system. As a result, arbitration is increasingly seen as the preferred option for resolving disputes between Indian and foreign parties. That too, however, has been fraught with difficulty.
First, most arbitrations in India are conducted on an ad hoc basis i.e., not administered by an arbitral institution. Such arbitrations tend to resemble the very Indian court proceedings which they are meant to substitute by being procedurally cumbersome and excessively time consuming.
Second, Indian courts have adopted an interventionist approach towards the conduct of arbitration proceedings. In particular, Indian courts have assumed the power to set aside awards that they consider to be contrary to Indian law.
All in all, as the Indian Law Minister himself succinctly acknowledged in his address at the launch of LCIA India, “arbitration in India is not done well.”
How could LCIA India help?
LCIA India will likely provide a direct solution to the first problem and, one hopes, over the longer term, go some way towards addressing the second problem.
Ad hoc arbitrations are popular in India for two reasons: (i) the absence of a well-established and popular local arbitration institution; and (ii) the perception that they are generally less expensive than institutional arbitrations. By making an internationally recognised brand such as the LCIA available at the doorstep of Indian parties, and (presumably) at competitive rates, LCIA India should address the long-held concerns of Indian entities about institutional arbitration.
With respect to intervention by Indian courts, LCIA India does not eliminate this problem. It could, however, provide a long-term solution. In the absence of a credible institutional framework within India, Indian courts have tended to view ad hoc arbitrations with some scepticism, often perceiving them to be unreliable or unfair. The hope is that LCIA India will enhance the credibility of institutional arbitration within India. A well-run, transparent, impartial and reliable administrative institution such as LCIA India could be the necessary catalyst in reviving the Indian judiciary’s confidence in the arbitral process, and encourage the courts to take a less interventionist approach towards arbitrations.
A new dawn?
It would be premature to suggest that the opening of LCIA India will, in and of itself, eradicate overnight all problems associated with arbitration in India. The current approach of the Indian courts means that losing parties in an arbitration can still obstruct the enforcement of awards by asserting spurious challenges in courts. Arbitral awards can still be overturned, and intervention by Indian courts in the arbitral process is more likely than not.
It is therefore likely that parties wishing to minimise the scope for Indian judicial intervention (in particular, foreign investors) would continue to prefer to arbitrate outside India. What LCIA India does, however, is to offer a credible institutional alternative to parties who wish to arbitrate within India. It remains to be seen whether LCIA India can make the transition from this and become the arbitral institution of choice for India-related disputes. Much will depend upon its actual performance, and it is too early to make any predictions.
Indian arbitration has seen many false dawns. The Arbitration and Conciliation Act 1996 based on the modern UNCITRAL Model Law and enacted with great expectations was one such example. For several reasons, the legislation did not deliver on its promise. It is hoped that LCIA India will buck the trend and provide a much needed fillip to Indian arbitration.
The White & Case International Disputes Quarterly is prepared for the general information of our clients and other interested persons. It should not be acted upon in any specific situation without appropriate legal advice.
This article may include links to websites other than the White & Case website. White & Case LLP has no responsibility for any websites other than its own, and does not endorse the information, content, presentation or accuracy, or make any warranty, express or implied, regarding any other website.
This article is protected by copyright. Material appearing herein may be reproduced or translated with appropriate credit.
About White & Case:
White & Case LLP is an international law firm with a century of legal practice experience. The pioneering International Arbitration Group is a recognised global leader in commercial arbitration, with over 160 practitioners based around the world.
Tags: Commercial arbitration, International arbitration, International commercial arbitration, International Law Firm
11 Jun 10 Hong Kong’s Legislature Considers Arbitration Bill
On July 8, 2009 Hong Kong’s draft Arbitration Bill, which abolishes the distinction between international and domestic arbitration, was read for a second time. The draft Bill is still being considered by the Legislative Council.
This update sets out the progress of the Bill, and describes an amendment made to the Bill since it was last reported on in the Spring 2009 issue of IDQ. The Bill has had a long gestation. In 1992, a committee of the Hong Kong International Arbitration Centre was invited to consider whether amendments to the Arbitration Ordinance were required. The 1996 report prepared by the Committee recommended that the Ordinance be completely redrawn in order to apply the UNCITRAL Model Law equally to domestic and international arbitrations and recommended interim measures to minimize the differences between domestic and international arbitration.
In 1998, a Committee on Hong Kong Arbitration Law was established to follow up on the 1996 report. This Committee issued its report in 2003. In 2005, the Department of Justice set up a Working Group with a view to implementing the recommendations in the 2003 report. The Department of Justice issued a consultation paper and the draft Bill in December 2007. The consultation period closed in June 2008, and the amended draft Bill was introduced into the Legislative Council a year later, in July 2009, with largely minor changes. The Department of Justice has published a document that includes the views of consultees on various issues, and its decisions on those issues.
A Bills Committee was formed and has met on six occasions. It is expected that the new Arbitration Bill will come into force during the Summer of 2010.
Open Court for Proceedings Under the Draft Arbitration Bill?
Various technical changes have been made to the draft Bill following the consultation, but one particularly contentious issue is the extent to which court proceedings under the Arbitration Bill (for example, an application to set aside an arbitral award) should be held in open court. The arguments both for and against open court are well known. On the one hand, courts should administer justice as transparently as possible, since they carry the coercive power of the state behind them. On the other hand, parties often choose arbitration over litigation for its confidentiality, so an over-eager desire for open justice may discourage international parties from arbitrating in Hong Kong.
The existing law provides that proceedings under the Arbitration Ordinance in Hong Kong must be held in private if any party to the proceedings so desires. In the Consultation Paper, the Working Group proposed that there should be a presumption that proceedings would be held in open court, but that if any party asked for them to be held in private they would be, unless the court was satisfied that they ought to be held in open court.
The Hong Kong Bar Association and the Hong Kong Institute of Arbitrators argued that it is more logical to start with the presumption that court proceedings be held in private unless either party requests otherwise (or the court decides on its own initiative) and the court is satisfied that the proceedings ought to be so heard. This would reduce the expense of parties as they would not have to make an application in each case. Some practitioners argued that the move to open court would be seen by international businesses and advisers as an undesirable erosion of arbitral confidentiality.
The Department of Justice has endorsed the consultees’ views in the amended draft Bill. If the Bill is passed in its current form, the courts will have a new discretion to order hearings on arbitration matters to be held in public, even when the parties want the hearing to be held in private.
The White & Case International Disputes Quarterly is prepared for the general information of our clients and other interested persons. It should not be acted upon in any specific situation without appropriate legal advice.
This article may include links to websites other than the White & Case website. White & Case LLP has no responsibility for any websites other than its own, and does not endorse the information, content, presentation or accuracy, or make any warranty, express or implied, regarding any other website.
This article is protected by copyright. Material appearing herein may be reproduced or translated with appropriate credit.
About White & Case:
White & Case LLP an international law firm with experience in five continents and over a century of legal practice. The pioneering International Arbitration Group is a recognised global leader in the field of international arbitration law, with over 160 practitioners around the world.
Tags: International arbitration, International arbitration law, International Law Firm
14 May 10 Senate Amends Patent Reform Bill
March 4, 2010 – The United States Senate Judiciary Committee released details of a new compromised patent reform bill entitled the “Patent Reform Act of 2010.” Introduced by Senators Patrick Leahy (D-VT) and Orrin Hatch (R-UT), the proposed amendment retains several of the key components of the original bill but also adds new provisions such as a provision limiting false patent marking lawsuits and the creation of a new administrative post-grant review procedure.
First to File:
As in the previous patent reform bills, the proposed bill would transform the United States’ unique first-to-invent patent system into the more common first-to-file system. In a first-to-file patent system the patent is granted to the first person who files a patent application, regardless of the date of conception.
Limitation on Damages:
The amended bill also retains the provision designed to prevent excessive damages awards. This provision allows the judge to act as gatekeeper during the damages phase of the trial, including determining whether a party’s damages theories and methodologies are sound and, therefore, should be allowed before the jury. The judge may keep potentially damaging evidence from the jury if the party’s damages theory lacks legally sufficient evidentiary basis. Therefore, the court acts as the gatekeeper, permitting the jury to hear evidence relating to the determination of damages only if the evidence is relevant to the methodologies and factors that the court determines are sound.
Opponents of the gatekeeper provision argue that the provision is unnecessary because the existing judicial framework already allows the court to prevent excessive damages awards, as seen in the recent Lucent Techs. v. Gateway, Inc. case, (580 F.3d 1301 (Fed. Cir. 2009)). In Lucent v. Gateway, the Court of Appeals for the Federal Circuit vacated a US$357 million damages award against Microsoft because the evidentiary record failed to show how the US$357 million lump sum award was calculated.
Heightened Willfulness Pleading Standard:
In addition, the amended bill makes it harder to plead willful infringement because, under the amended bill, the plaintiff must plead willfulness with particularity as set forth under Federal Rule of Civil Procedure 9(b). The amended bill also allows bifurcation so that the infringement and validity portions of the case are decided before the issues of damages and willful infringement.
Post-Grant Review:
Also new to the bill is an administrative post-grant provision which allows third parties to challenge the patentability of newly issued patents within nine (9) months of issue. Similar to inter parte re-examination, the patent owner is allowed to file responses throughout the process. Final determination in any post-grant review is to be issued within one (1) year after the post-grant review petition is granted.
False Marking Provision:
Finally, the new bill includes a provision addressing the flood of false marking litigations since the Court of Appeals for the Federal Circuit’s decision in Forest Group, Inc. v. Bon Tool Co., 590 F.3d 1295 (Fed. Cir. 2009) (imposing a US$500 penalty for each article falsely marked). Under the amended bill, the plaintiff must show it has suffered a competitive injury as a result of the false marking. If enacted, this provision would apply to all pending and future cases.
Due to the bipartisan compromises contained in the current bill, the full Senate is likely to vote on the bill without additional amendments.
The press release can be found here.
The full text of the proposed bill, S. 515, is here.
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