Nigerian Economy PHOTO

Legal Issues arising from a Technical Expatriate’s Business in Nigeria

Apart from the oil and gas sector which remains the mainstay of Nigerian economy, the technical knowhow of expatriates are also needed in other budding sectors of the Nigerian economy such as tourism, mining, agriculture, manufacturing, power, real estate, construction, cable television and telecommunication. For expatriates to carry on their businesses in Nigeria some legal issues arises and same must be effectively dealt with to ensure smooth running of their businesses. The issues include;

a. Registration of the expatriate’s business in Nigeria and securing a convenient place of business for the expatriates;
b. Advice on formalities and documents for application of Nigerian Visa, Work and Resident and Business Permits and petition on matters arising thereto;
c. Ensure the Employment Agreement of the expatriate conforms with Nigerian immigration, labor, tax, social security law and other relevant legislations;
d. Advice on government policies and regulations on the expatriate’s business as well as technical or legal hitches the expatriate may encounter in the course of its business;
e. Advice on tax holiday and concessions in the expatriate’s business;
f. Identify Nigerian legislations which provide for employment and training of Nigerian employees by the expatriates;
g. Advice the expatriate whether it is more advantageous and cheaper for the expatriates to employ and train Nigerian employees instead of bringing in more expatriates;
h. To estimate the overall labor costs the expatriates will bear in respect to its employees, taxes, social security contribution and Medicare costs and other charges under Nigerian law.

This will not only protect the expatriate from avoidable litigation, it will guide the expatriate in carrying on its business and protect his investment in Nigeria.

Brexit-shattered-glass

‘There is a pre-Brexit window to aim for’

London capital markets partners are anticipating a flurry of initial public offerings (IPOs) this year, ahead of the UK’s exit from the European Union in 2019.

Partners says there is an impetus to start IPO processes early in order to avoid any uncertainty in the run-up to Brexit, scheduled for 29 March next year.

Clifford Chance (CC) global capital markets head Adrian Cartwright (pictured above) comments: “Most companies are looking to get IPOs away in 2018, as the first half of 2019 will be overshadowed by Brexit. You really need to be getting a process underway in the next two to three months to hit an execution window in the second half of 2018.”

White & Case partner Jonathan Parry (pictured right) adds: “There is definitely a pre-Brexit window to aim for. A number of IPOs are expected to hit the early summer window.”

With Brexit looming, partners say the volume of deals will at least match 2017. Last year, there were 106 IPOs raising a total of £15bn in London, a three-year high – a strong increase on 2016, which saw 65 IPOs raise £5.7bn.

 

If you haven’t got a deal done by the end of the third quarter, you will be getting into a nervous period

Key IPOs in 2017 include the Irish Government’s May flotation of a 25% stake in Allied Irish Bank, which valued the group at €12bn (£10.5bn). The dual-listing in London and Dublin threw up roles for Linklaters, Allen & Overy and Herbert Smith Freehills.

Meanwhile, in November, Russian aluminium company EN+ floated in London and Moscow, giving the overall business a value of $8bn (£5.6bn). It was the first major primary listing by a Russian company in London since sanctions were imposed on Moscow. White & Case acted for EN+ and Linklaters advised the banks.

In April, logistics company Eddie Stobart raised £393m on AIM, the largest AIM IPO since 2005. King & Spalding acted for Eddie Stobart while Hogan Lovells advised the banks.

Ashurst partner Nicholas Holmes comments: “I think 2018 could be broadly comparable to 2017, but my suspicion is that activity in 2018 will be compressed into three rather than four quarters. If you haven’t got a deal done by the end of the third quarter, you will be getting into a nervous period as Brexit becomes more imminent.”

Parry adds: “Overall volumes could be higher this year. Last year, volumes in the first half were pretty low in terms of premium listing IPOs and it was a very sluggish market. There was a change post-summer – the IPO pipeline picked up considerably in Q3, and as a result overall volumes for the 2017 were fairly high.”

At the same time, some companies may opt to take their chances in a less crowded market in early 2019, comments Allen & Overy partner James Roe (pictured right). “There’s an impetus to get transactions done before October 2018, but equally if the market is crowded as a consequence there may be opportunities towards the end of this year or the first quarter of 2019 for a prepared company to IPO.”

By region, partners say the London listings are expected to come from a range of locations including Turkey – spurred on by general elections in the country scheduled for November 2019 – Greece and the Middle East.

Cartwright comments: “There is activity across a whole mix of jurisdictions, including the UK, continental Europe, Turkey, and Russia is also back, despite the threat of further sanctions. The Middle East is also busy.”

Herbert Smith Freehills equity capital markets head Charles Howarth adds: “There are some UK IPOs of non-UK companies, but much of the IPOs are from the far end of the Mediterranean, Turkish and Greek. There is a burgeoning pipeline of Turkish IPOs, both domestic and London, driven in part by uncertainty over the elections due late next year.”

Much talk in the market is dominated by the potentially record-breaking Saudi Aramco IPO, which could value the company at as much as $2.5trn (£1.7trn). It is understood the company has shortlisted London, New York and Hong Kong for the international portion of the listing. White & Case is acting for Saudi Aramco, but further legal advisers have yet to be appointed.

Other IPOs that could launch this year include UK cinema chain Vue Cinema International, which would reportedly value the group at at least £1.6bn, while its rival Odeon is also looking at a listing of a similar value.

Overall, companies and investors seem more likely to take their chances sooner rather than later.

Parry concludes: “There is still very little clarity as to what is going to happen in March 2019. At the moment, with investor sentiment and stock market valuations where they are, there does seem to be an open window that issuers and investment banks are looking to take advantage of.”

Singapore

A&O loses banking duo to Mayer Brown in Singapore

Allen & Overy (A&O) partner Kayal Sachi and counsel Ian Roebuck have exited the firm to join Mayer Brown JSM in Singapore as partners.

The new hires will focus on acquisition and leveraged finance, corporate lending and restructuring in South East Asia and India.

Sachi was a partner at A&O for over 14 years, having joined from Clifford Chance in 2003. Sachi became a partner in 1997 at Clifford Chance, and worked in both Singapore and London for over 15 years.

Roebuck joined Allen & Overy as a trainee in 2001, and has been made a partner through this move.

Mayer Brown has invested in its Asia offering in recent months, hiring former Tokyo managing partner Rupert Burrows from Ashurst to launch its first office in Japan.

In Singapore, its most recent joiners include Angelia Chia and Ben Sandstad in Singapore, who were both global heads of legal at Standard Chartered Bank in the region.

City of London

Vinson & Elkins hires Paul Simcock from Jones Day’s London base

Vinson & Elkins has hired acquisition and leveraged finance partner Paul Simcock from Jones Day’s London base.

Simcock, who joined the US firm in 2014 from Berwin Leighton Paisner, was previously a counsel at Skadden Arps Slate Meagher & Flom, having trained at Allen & Overy.

Last year he was part of the Jones Day team which advised L1 Retail, the retail investment arm of LetterOne, on a £900m financing in connection with the acquisition of Holland & Barrett.

Vinson EMEA corporate head Jeff Eldredge said: “Our corporate team has been growing rapidly, and with the addition of another top-tier hire, we’re positioned to push even further into one of the leading finance capitals of the world.

“Paul is an extremely accomplished lawyer whose strong relationships and energetic approach to client service are exactly what we look for at Vinson.”

Other recent London hires for Vinson include Clifford Chance finance partner John Dawson and Simpson Thacher & Bartlett finance counsel Federico Fruhbeck, who both joined as partners.

Simcock said: “Vinson’s commitment to the continuing expansion of its London team is a big part of what prompted me to make this move. I’ve worked with many members of the team – as a colleague or across the table – and have always been impressed by the firm’s collegial and entrepreneurial culture as well as the sophistication of its attorneys.”

Jones Day saw a number of London partner departures during the 2015-16 financial year, including several practice heads, with tensions around the firm’s lack of transparency over pay and a disconnection between the London office and the rest of the firm blamed by some for the spate of exits.

British Land appoints former Co-op Bank GC to head legal team

The Co-operative Bank’s former general counsel Brona McKeown has joined British Land as GC and company secretary.

McKeown, who was the FTSE 100 company’s first GC, takes over from Elaine Williams who left the property company to join UK logistics company Eddie Stobart after just two years in the role, in November 2017.

McKeown left the Co-op in October 2017, after joining in 2013 as its first legal head. She departed just two months after the company had secured a £700m bailout from hedge funds and other investors. She was replaced by the bank’s regulatory risk director David Bagley.

Before joining the Co-op Bank, McKeown had been interim general counsel at Coventry Building Society for less than a year. Prior to that, she held a number of roles at Barclays, most recently serving as global general counsel of its corporate arm. She joined the bank in 1998 after a six-year stint working for CMS.

Last year, British Land appointed former easyJet group company secretary Bruce James as interim company secretary after Williams left. Previously, James was a consultant at the company for a year, having moved over from easyJet in 2016.

Williams was involved in putting together British Land’s first legal panel in 2015. In January 2017, the company confirmed that Hogan Lovells was to take over KWM’s position on the roster after the firm’s European arm collapsed at the beginning of 2017.

In May that year, British Land sold London’s Leadenhall Building to Chinese investors for £1.15bn. Herbert Smith Freehills, Mayer Brown and Berwin Leighton Paisner picked up key roles acting on the sale of the the building, known as the Cheesegrater.

ADR PHOTO

The Rise of Alternative Resolution Mechanisms in Nigeria

In the course of business, it is inevitable that disputes will arise occasionally among business associates. While commercial disputes are common, the way they are handled can have a profound impact on the profitability, viability and survival of the business. It is true that full blown disputes are always bad news for a business venture as they can lead to poor performance, scare investors, produce waste, divert resources, cause share values to decline, and, in some cases, paralyze a business.

In Nigeria’s pre-colonial society, disputes were resolved by respected members of the society or by the sovereign able assisted by his council of chiefs. Customary arbitration as it is later referred to, has similarities with the modern day Alternative Dispute Resolution (“ADR”) mechanisms because apart from the fact that it is quicker and less technical, it is also friendlier in nature and in most cases preserves the relationship of the parties to the dispute.

With the advent of the British, litigation relegated customary arbitration to the background but sooner than later, it was discovered that the composition of the litigation process is acrimonious and did not take into cognizance the value system of the pre-colonial societies. Though litigation has the advantage of finality and sanction, in most cases it destroys the business relationship between the parties. Either by design or coincidence, litigation with its inherence complexities became the main means of resolving commercial disputes in Nigeria. Hence, there grew a natural need amongst the business community, for a dispute mechanism that quickly resolves commercial disputes whilst preserving business relationships. As the Nigerian market became more competitive, businesses strived to maintain their customers while seeking new ones. But this is not always possible where commercial disputes drag on and on in the Courts.

Consequently, in Nigeria today, there are 3 (three) main methods of resolving commercial disputes. They are litigation, arbitration and mediation/conciliation. Large commercial disputes are litigated at the State and Federal High Court. The Federal High Court has exclusive jurisdiction over matters of revenue, company taxation, customs and excise, banking, aviation and shipping. A large portion of commercial disputes cases are adjudicated upon at the State High Court which has unlimited jurisdiction to hear and determine matters other than those within the exclusive list of the Federal High Court. Appeal from these courts lie to the Court of Appeal and further to the Supreme Court.

The clog experienced with litigation has led to a greater awareness of the advantages of ADR mechanisms among business associates, investors and legal practitioners. Most contracts today contain ADR clauses or arbitration clauses. The Courts now refer parties to a dispute to the multi-door Court-house attached to the Courts to explore settlement of their dispute through one of the ADR mechanisms available at the multi-door Court-house. The Arbitration and Conciliation Act is being adopted or modified by many states of the Federation and there has been an increase in institutional and ad-hoc, local and international arbitrations as well as a tremendous rise in the activities of institutional arbitration centers in Nigeria and other parts of Africa. It is without doubt that Nigeria is equipping itself to grapple with the escalating commercial disputes resulting from the growth in business activities and increase in international trade and investment.

BLP-Bryan Cave merger vote delayed as firms face tax hit

Merger talks between Berwin Leighton Paisner (BLP) and Bryan Cave have been held up as the pair wrangle with tax issues relating to their desire for full financial integration.

Sources at both firms confirmed to Legal Week that a vote on the deal has been pushed back while the pair continue to address the tax complications of a fully integrated UK/US merger.

Some partners had initially expected to vote on the deal, which was announced in October last year, before the end of 2017, with the union potentially going live as early as January. However, BLP partners have said that no vote date has yet been communicated to them by management.

Both firms have previously stated their intention to pursue a fully integrated merger, rather than the looser Swiss verein or company limited by guarantee structures that have been adopted by many other recent transatlantic tie-ups.

One BLP partner said: “I think we are hoping to hear more [about the tax situation] before the end of the month. It should be imminent. People want to get on with it.”

A source at Bryan Cave in the US also said that they expected an update by the end of the month.

Jomati Consultants principal Tony Williams speculated that given the size of BLP and Bryan Cave, the tax bill associated with full financial integration could run into tens of millions. BLP posted revenue of £272m in 2016-17 against profit per equity partner (PEP) of £630,000. Meanwhile, Bryan Cave’s revenue for 2016 stood at $608m (£440m), against PEP of $865,000 (£650,000).

He said: “The basic problem that arises on this type of law firm combination is that in the UK, firms have to operate using accrual accounting, where the US work on cash accounting. Converting one to the other has a significant cost element and a US firm will probably want to stay on cash accounting to avoid taking a tax hit. It is a very significant issue, which is why the vast majority of mergers – even when they have one profit pool – tend to have the US still operating on a cash basis.

“You are probably talking between 20% and 25% of turnover being uplifted and that being subject to whatever the US tax rate is on that. That may be negated on accruing further expenses, but you are comfortably looking in the tens of millions.”

A partner at one transatlantic firm added: “Tax regulation often slows these things down because the UK firm becomes liable for US tax if you go for a consolidated approach. It is a one-off hit, but it normally creates a liability of many millions of pounds that you have to find out of the current year, and partners will have to swallow that.”

However, one BLP partner maintained that the two firms still wanted to push ahead with the one-firm structure referenced by Bryan Cave chair Therese Pritchard when the talks were confirmed.

He said: “None of the other [transatlantic mergers] are really fully financially integrated. With all of the other people who have tied up, the plumbing isn’t quite right.”

Big four accountant Deloitte is advising the firms on the tax structure of the proposed merger.

Earlier this month, BLP announced an earlier-than-usual round of partner promotions. Typically, the firm’s new partners are confirmed in April or May, but this year’s promotions were brought forward as a result of the merger talks.

Bryan Cave declined to comment. BLP said estimates into the tens of millions were incorrect and added: “we will not comment any further on what are confidential discussions”.

Latham & Watkins hires two Litigation partners from HL

Latham & Watkins has boosted its City office with the hire of two litigation partners from Hogan Lovells.

Co-head of global financial services litigation Jon Holland and banking litigation partner Andrea Monks will join the firm’s litigation and trial department in London.

Holland joined legacy Lovells in 1986 and is also qualified to practice in Hong Kong and Australia. He specialises in financial services investigations and litigation.

Monks’ practice includes advising banks on contentious regulatory investigations and acting for banks and corporates on anti-money laundering issues.

Latham London managing partner Jay Sadanandan said: “Jon and Andrea have outstanding reputations in high-stakes, market-defining disputes and investigations. “Their broad expertise knits well with our growing litigation and regulatory practices in the City and fits with our strategy of building top-notch litigation strength across the globe.”

Last year the US heavyweight set out ambitious targets to ramp up its presence in the London litigation market.

It is aiming to double the number of lawyers in its London litigation department during the next three to five years.

In October last year the firm hired CMS UK litigator Ian Felstead, following the appointment of Stuart Alford QC and Oliver Browne as co-chairs of the City disputes practice earlier in the year.

Other recent City litigation recruits include Martin Davies who joined in January 2017 from Quinn Emanuel Urquhart & Sullivan and arbitration partner Sophie Lamb, who joined from Debevoise & Plimpton in 2016.

The firm’s most recent significant hire came in November, when DLA Piper international senior partner and global co-chair Juan Picon joined the firm in Madrid.

Ropes & Gray Logo

Ropes & Gray hires white collar crime partner from Clifford Chance

Ropes & Gray has hired white collar crime partner Judith Seddon from Clifford Chance as co-head of its London international risk practice.

Seddon joined the magic circle firm in 2008 as a director in its business crime and regulatory enforcement group, before being made up to partner in 2014.

She specialises in advising clients on UK and cross-border regulatory and criminal investigations and prosecutions, with a particular focus on the financial services sector.

Fellow Ropes London international risk co-head Amanda Raad said: “After working alongside Judith for years, I have witnessed her substantive expertise and ability to exceed client expectations.  She is the perfect fit to help drive forward our growing global financial crime and international risk practice.”

Seddon’s hire comes after a number of partner walk-outs from Ropes’ London base last year.

The firm saw eight City partners depart during 2017, including funds partners Anand Damodaran, Michelle Moran and Monica Gogna to Kirkland & Ellis, K&L Gates and Dechert respectively.

BNP

Global legal panel of BNP Paribas to be reviewed

BNP Paribas is gearing up to review its global panel of legal advisers, six years after it last overhauled the line-up.

The French bank is understood to be in the early stages of kicking off the process and has started initial interviews with existing firms.

A full review is expected to start later this year. The French bank’s last review saw first-time appointments for Freshfields Bruckhaus Deringer and Herbert Smith Freehills (HSF). Allen & Overy (A&O), Clifford Chance, Linklaters, Hogan Lovells, Norton Rose Fulbright, Cleary Gottlieb Steen & Hamilton, White & Case and Gide Loyrette Nouel were all reappointed to the roster, with other firms understood to have been appointed for specific advice.

That review was led by Georges Dirani, who joined BNP Paribas as global GC in October 2010 and remains in the same role today.

News of BNP Paribas’s planned review comes after Legal Week reported earlier this week that Lloyds Banking Group had finalised its customer pay panel, with firms including Clifford Chance and CMS among those making the cut.

The panel is known within the bank as its ‘pass-through’ panel. It covers legal advice to the bank’s clients on transactions, with fees passed directly onto the client, rather than paid by the bank itself.

BNP Paribas declined to comment.