Baker & Mckenzie

Baker McKenzie Advises Monomoy on Engineering Acquisition

Baker McKenzie advised private investment firm Monomoy Capital Partners in its acquisition of Kauffman Engineering Inc., an Indiana-based manufacturer of wire harnesses and cable assemblies for electrical systems.

Founded in 1973, Kauffman operates about 20 facilities across the United States and Mexico and serves clients across the HVAC, commercial equipment, specialty vehicle, lawn care, marine, medical and other industrial markets.

“We partner with our private equity clients to add value wherever we can and ensure a smooth process in negotiating and closing deals, so they are able to realize as much growth as possible. We are pleased to help Monomoy do just that in this acquisition,” said Michael Fieweger, Baker McKenzie’s lead M&A partner on the transaction.

Baker McKenzie has the world’s largest M&A practice, with nearly 1,400 lawyers executing more cross-border transactions than any other law firm.

The Baker McKenzie team included Michael Fieweger, Garry Jaunal and Emeka Chinwuba.

About Monomoy Capital Partners

Monomoy Capital Partners is a private equity firm with $1.5 billion in committed capital that invests in middle-market businesses in the manufacturing, industrial, distribution and consumer products sectors. The firm invests in the both the equity and debt of middle-market businesses that can benefit from operational and financial improvement. Monomoy designs and executes a customized value creation plan for each acquisition that seeks to generate significant cash flow and improve earnings within 12 to 18 months of an investment. Over the past 14 years, Monomoy has closed over 50 middle-market acquisitions. To learn more about Monomoy and its portfolio companies, please visit the firm’s website at www.mcpfunds.com.

 

Brexit: PM under fire over new Brexit plan

Theresa May will make the case for her new Brexit plan in Parliament later, amid signs that Conservative opposition to her leadership is hardening.

The prime minister will outline changes to the Withdrawal Agreement Bill – including a promise to give MPs a vote on holding another referendum.

But shadow Brexit secretary Sir Keir Starmer said the offer was “too weak”.

Some senior Tories will today ask party bosses for a rule change to allow a no-confidence vote in her leadership.

Environment Secretary Michael Gove defended the PM’s plan, urging MPs to “take a little bit of time and step back” to “reflect” on the detail of the bill – due to be published later today.

Fellow cabinet minister and prominent Brexiteer Andrea Leadsom said she was “looking very carefully at the legislation” and “making sure that it delivers Brexit”.

MPs have rejected the withdrawal agreement negotiated with the EU three times, and attempts to find a formal compromise with Labour have failed.

On Tuesday, the prime minister asked MPs to take “one last chance” to deliver a negotiated exit – or risk Brexit not happening at all.

But several Tory MPs have criticised her plan. Among them, Nigel Evans will today urge party bosses on the 1922 committee to change party rules to allow for an immediate vote of no-confidence in Mrs May.

Because the PM survived such a vote in December, the current rules say she cannot face another for 12 months.

The committee has said ‘no’ to such a change before.

But the Conservative Home website has urged people not to vote for the party in Thursday’s European elections if Mrs May is still in post “by the end of today”.

HONG KONG HK

Hong Kong Dispute Resolution: Plans for 2019 and Beyond?

Here, we take a look at market trends and emerging best practices in the dispute resolution space to offer a guide as to what could be top of mind for practitioners in 2019 and beyond

Arbitration

What’s on the horizon? We’ve seen key changes in the evolution of the arbitration arena in Hong Kong, with a host of reforms undertaken to boost efficiency, create clarity, and to align the city’s mechanisms with those of England & Wales, Australia and Singapore. Most notably, the issuance of the Code of Practice for Third Party Funding came into effect on 1 February. This expressly allows for third party funding for arbitration and related matters and this key development irrefutably abolishes the doctrines of champerty and maintenance. What we will expect to see this year is greater clarity and transparency in the Hong Kong panorama as it enables a person or entity who has no interest recognised by law in the arbitration to be a third party funder. The Code, which was published in early December 2018, outlines the practices and standards for third party funders. An advisory body will oversee elements that pertain to funding agreements, confidentiality, conflicts of interest, termination and other related issues.

What you can expect to see: Greater clarity and transparency and a spike in the number of funding agreements as Hong Kong’s landscape aligns itself with forward-thinking jurisdictions. It is likely that these new provisions will make it easier to ensure that strong claims can be pursued; and will allow claimants to hedge their costs. In construction disputes, which are often lengthy and expensive, funding may allow parties to spread risk by not having to bear the whole cost of bringing or defending a claim, and will certainly provide considerable cash flow benefits – the traditional ‘life-blood’ of the construction industry.

DVC’s Anthony Houghton SC and Benny Lo closely examined the impact of the Code at the high-level Think Hong Kong, Think Global event in Tokyo recently.

For more on recent trends on how third party funding is viewed by the courts in a civil claim, refer to the recent Raafat Imam v. Life (China) Company Limited and Others [2018] HKCFI 1852 case featuring DVC’s Clifford Smith SC, Sabrina Ho and Tommy Cheung. The Mongolian Mining and China Solar cases, are cases of third party funding in the insolvency context.

For more on third party funding in the insolvency domain and the interaction between insolvency and arbitration please see Look-Chan Ho’s overview from 2018’s Arbitration Week and Look-Chan Ho and Tommy Cheung‘s presentation on Controlling Costs.

Belt & Road Initiative

Another prominent change to Hong Kong’s landscape in 2019 includes the Belt & Road Initiative.

The Belt & Road Initiative which is made up of a belt of overland corridors and a maritime road of shipping lanes linking over 60 countries will bring about complex investment opportunities bisecting the transport, logistic, maritime, telecommunications and other sectors. With multiple cross-border investors tied together contractually, this will inevitably (and unavoidably) lead to a myriad of disputes impacting international trade, commercial, company & insolvency, intellectual property, construction, telecommunications and other major sectors. Given that arbitration is the most popular and cost-efficient mechanism used to resolve cross-border disputes, Hong Kong is geographically poised to leverage contentions arising from these ventures. DVC has handled numerous enforcement (and setting aside) of awards.

The proposed Greater Bay Area initiative is potentially another landmark infrastructure project that will link Hong Kong, Macau and nine cities in Guangdong Province in order to establish a trading, logistical, manufacturing and technological axis for commercial activity. Another significant change entailed the implementation of the new administered arbitration rules (‘HKIAC Rules’) enacted in Q4 of last year.

What you can expect to see: 2019 and going forward, due to the HKIAC Rules being implemented, we will likely see many gridlocked parties turn to Hong Kong as a seat for these arbitrations.

Trump signs order banning Huawei in US

US President Donald Trump signed an executive order Wednesday that effectively prohibits US companies from using any telecoms equipment manufactured by China’s Huawei.

The executive order, which has been under consideration for a year, cites the International Emergency Economics Power Act, a law enacted in 1977 that gives the president broad power to control trade in response to a national emergency.

The order does not mention any countries or companies by name. It instead creates a review process that allows the US commerce secretary to review any transactions involving companies that are viewed as posing a security threat to the country, which would include Huawei.

Chinese Foreign Ministry spokesman Geng Shuang said during a daily briefing in Beijing on Wednesday that “for some time, the US has been abusing its national power to tarnish the image of and crack down on specific Chinese companies.” Nevertheless, the United States has been actively pushing other countries not to use Huawei’s equipment in next-generation 5G networks that it calls “untrustworthy.”

Baker McKenzie Named Mainland Europe’s Strongest Law Brand

Leading Global law firm Baker McKenzie has been named Europe’s strongest law brand in the 2018 Acritas Mainland Europe Index.

The Firm received an overall score of 100 – nearly 30 points ahead of the firm that ranked second place – and ranked top for awareness, favourability, top level engagement, multi-jurisdictional deals, multi-jurisdictional litigation, high value usage and inbound usage. The Firm ranked number one in France and Russia, and placed high in Germany, Spain and Italy.

Constanze Ulmer-Eilfort, Baker McKenzie’s Chair of the EMEA region, said: “To be named the top legal brand in Europe is an outstanding endorsement of the work we do and is welcome validation from the European market of the progress we have made. We’ve built our business around investing in our client relationships and innovating to stay relevant to clients so we’re delighted that commitment has been recognised by senior legal buyers across Europe.”

Ranking is based on the responses of 448 senior legal buyers, based in Mainland Europe about their organization’s overall legal needs, and a further 311 senior legal buyers about their international needs in the key jurisdictions of France, Germany, Netherlands, Russia and Spain.

Esteban Raventós, a member of the Firm’s Global Executive Committee, said: “Brands are built upon trust, and in professional services trust is built through excellent service and expertise. We’re pleased to be recognised for the depth of our practice in mainland Europe and our unique ability to deliver global perspectives and local expertise simultaneously.”

The Firm’s European ranking follows Acritas naming Baker McKenzie the strongest global law firm brand in its Global Elite Law Firm Brand Index for the ninth year in a row. In the global survey, the Firm ranked at the top for each of the measures in the Acritas Index – awareness, favourability, consideration for multijurisdictional deals and for multijurisdictional litigation.

HRW condemns Bolivia dismissal of judges

Human Rights Watch (HRW) accused Bolivia on Monday of undermining judicial independence in the country by arbitrarily dismissing nearly 100 judges since 2017 and called for the Organization of American States (OAS) to address the issue.

The organization called for OAS to convene a meeting of its Permanent Council to address the ongoing changes to the Bolivian justice system that are weakening the rule of law, and to “remind Bolivian authorities that judicial independence, including guarantees protecting judges from arbitrary removal, is a key component of any rights-respecting democracy.”

HRW has accused Bolivia’s Magistrates Council, the body that appoints and dismisses judges, of arbitrarily dismissing dozens of permanent judges without cause or an opportunity to contest their dismissals.

According to HRW, President Evo Morales has taken a stance against judicial independence. HRW reports, in “October 2018, for example, he said that judicial independence was a ‘doctrine of North America,’ meaning the United States, and of ‘capitalism.’”

The current three-member council was elected by popular vote in December 2017. Voters chose from a list created by the Plurinational Assembly, the Bolivian legislature, where the Morales administration held a two-thirds majority. The list presented 10 candidates, six of whom had worked for the Morales administration at some point. Even though the mandate regulating the process set out requirements for the assembly to select candidates based on their experience as lawyers, lawmakers reserved substantial discretion to rank candidates based on interviews.

The dismissals were part of a broader justice reform, which started in 2016, led by a nine-member commission. The commission has sweeping powers, which include controlling the appointment of new judges and taking “other actions necessary” to reform the judiciary. Five of the commission’s members are either Morales supporters in the Assembly or government officials he appointed.

HRW also notes that Bolivia is a party to several treaties regarding human rights, “including the International Covenant on Civil and Political Rights (ICCPR) and the American Convention on Human Rights, that require it to safeguard the independence and impartiality of its judiciary.” Additionally, the UN Human Rights Committee, which oversees compliance with the ICCPR, has advised governments that the right to an independent and impartial judiciary is an absolute right, not subject to any exceptions.

According to HRW, in a comment regarding the absolute right of an independent and impartial judiciary, the UN committee has taken the position that “the requirement of independence refers, in particular, to the procedure and qualifications for the appointment of judges, and guarantees relating to their security of tenure,” noting that “judges may be dismissed only on serious grounds of misconduct or incompetence, in accordance with fair procedures ensuring objectivity and impartiality set out in the constitution or the law.”

EU court advisor sides with Airbnb against French restrictions

The European Court of Justice Advocate General submitted an opinion Tuesday siding with Airbnb in a case challenging strict French rules.

The Prosecutor’s Office in Paris France filed an indictment for infringement of Hoguet law (real estate law) concerning real estate agents against Airbnb Ireland. Airbnb Ireland denies acting as a real estate agent and the Court of Justice agreed. The opinion found that Airbnb services fall within the scope of “information society services.” The AG rejected that the Irish company would be covered by the nation’s Hoguet Law because there was not proper notification of the intention to apply French law to the Irish company.

In a press release accompanying the opinion the court said that the AG found that Airbnb is a “service consisting in connecting potential guests with hosts offering short-term accommodation, via a electronic portal, in a situation in which the provider of that service does not exercise control over the essential procedures for the provision of those services, constitutes an information society service.”

The opinion is not binding on the court, but is likely to be adopted.

ECJ rules EU and Canada trade agreement follows EU laws

The European Court of Justice (ECJ) ruled on Tuesday that the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU follows EU laws. The court decision was requested by Belgium and was focused on the section of CETA that concerns resolution of investment disputes between investors and states.

CETA will establish a Investment Court System (ICS) to handle disputes between investors and states. The system will include a Tribunal, an Appellate Tribunal, and a multilateral investment tribunal. The Tribunal will include 15 members: five from Canada, five from EU member states and five from third countries.

Belgium filed the request for a decision from the ECJ because the ECJ has exclusive jurisdiction over the definitive interpretation of EU law. The ECJ found that CETA did not violate this principle as long as the CETA Tribunals do not attempt to interpret EU laws.

Belgium was also concerned that the Investor-State Dispute Settlement (ISDS) mechanism would violate the EU’s principle of equal treatment in regards to treatment of a suit raised by a Canadian investor against an EU enterprise. The ECJ found that the equal treatment provision is not violated for a non-EU investor making a suit against an EU member state. The ECJ also found that EU law permits annulment of a fine by an EU member state if the CETA Tribunal finds a defect.

The EU Charter of Fundamental Rights also gives the right of access to an independent tribunal, which Belgium believed may be violated by the establishment of the CETA Tribunal. The concern was based on the fees and costs associated with the Tribunal which may make it difficult for small enterprises to bring a claim. The Commission has committed to providing co-financing for small and medium-sized entities before the Tribunal. The ECJ found these commitments to be sufficient to meet EU law.

Conyers advises AXA on agreement to acquire XL Group

Conyers advises AXA in connection with an agreement to acquire 100% of Bermuda-based XL Group Ltd (NYSE: XL), a leading global property and casualty commercial lines insurer and reinsurer, for a total consideration of US$15.3 billion, to be fully paid in cash. Completion of the transaction, which was unanimously approved by the boards of AXA and XL Group, is subject to approval by XL Group shareholders and other customary closing conditions, including the receipt of required regulatory approvals, and is expected to take place during the second half of 2018.

US to end sanction waivers for countries importing Iranian oil

The White House announced Monday that US President Donald Trump will not reissue Significant Reduction Exceptions (SREs) when they expire in early May in an effort deny Iran’s principal source of revenue and bring its oil exports to zero.

The SRE waivers allowed eight economies to purchase Iranian oil without facing US sanctions. However, by canceling the waivers, Washington hopes to deplete exports of Iranian oil in order to press Iran to curtail its nuclear program and disrupt its terror network.

The Trump Administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies, and security in the Middle East.

The White House statement reiterated that the United States, Saudi Arabia, and the United Arab Emirates are committed to ensuring that global oil markets remain adequately supplied. “We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market.”

The eight governments who benefited from the SREs are China, India, Japan, Turkey, Italy, Greece, South Korea and Taiwan. The US has no plans to give any grace period beyond May 1 for countries to end Iranian oil imports.