Monthly Archives: August 2015

Comments on 2015 Version of CIETAC

Chinese International Economic and Trade Arbitration Commission (“CIETAC”), probably one of the busiest arbitration administration institution all over the world, has promulgated its new version of arbitration rules on 2015. (“2015 Rules”)

Compared to the 2012 version of CIETAC arbitration rules, there are more than 20 changes in the text and 3 in the appendix of the 2015 Rules. Among others, such revisions aim to alter the structure of CIETAC by employing functional division between the Secretariat – providing public service under Art 19 of the Charter of CIETAC, and the Arbitration Court – replacing the Secretariat in administering cases. In the meantime, the new 2015 Rules also take steps to embrace existing practices in international arbitration practice.

Lease Contract and Illegal Buildings in China

Please do not be surprised that if the premises your PRC entities are using turn out to be illegal buildings. This is especially the case if the buildings are factory buildings or warehouse in the area which was still a village not long ago. In fact, in some rapidly developing area of China such as the Longgang district or Baoan district of Shenzhen City of China, almost 90% of the buildings were built without proper legal planning or construction permits.

Are Online “Hidden” On-Line General Terms and Conditions Valid?

In China and probably the rest of the world, for the sake of efficiency, it has been a well established, if not best, practice to negotiate the key commercial terms and conditions on a short term sheet on a particular transaction and then incorporate a master agreement to cover other general issues.

In the context of our new internet world, the incorporation of such master agreement is often merely reflected in a link hidden somewhere in the party’s official website, which in turn leads to the master agreement containing dozens of pages of internal policy or terms and conditions. You might not be able to recall when is the last time you read, or even discover, such pages of tedious legal terms, but it is arguably a contract you agree to enter into. However, under PRC law, such contract might be deemed as a “standardized contract”.

Sweet Cookies Vs. Bitter Privacy?

Nowadays, any news on ISPs having been hacked and leakage of customer’s private information can barely be considered news anymore. Most people might blame the ISP which tracks and collects their information by putting a small set of data structure called “Cookies” in your computer with or without your consent or even knowledge for tailored made advertisement or precisely, behavioural marketing.

However, on the other hand, you might not be able to recall the good old days when the earth spinned without Google, which to a large extent was fed on such sweet “Cookies”.

Independent Guarantee in China

Independent guarantee has been well established in developed countries, which has been reflected in the ICC Uniform Rules on Demand Guarantees. Although it may be called as many other names, the common characteristics or requirements of independent guarantee can be summarized as below:

Characteristics of Independent Guarantee

As a general legal principle, a guarantee is a collateral contract subject to the principal underlying contract. If the principal underlying contract is deemed invalid, the guarantee will also be affected.

Branch or subsidiary in Hong Kong?

The major difference between a branch( a representative office) and subsidiary in Hong Kong is that a subsidiary, (also known as a private limited company), is an entity which is entirely separate from its parent under HK law, which differs for a branch. Generally, it will not matter whether a company is locally incorporated as to the business activities available to a company in HK, and there is little practical difference in respect to profit calculation between operating a branch or subsidiary.