Friday, October 30, 2015

New Book: Shipping and Logistics Law: Principles and Practice in Hong Kong, 2nd ed (HKU Press)

Shipping and Logistics Law: Principles and Practice in Hong Kong, 2nd Edition
Felix WH Chan, Jimmy JM Ng, Sik Kwan Tai
HKU Press, October 2015
Description: This book provides a general introduction to the basic principles of shipping and logistics law in Hong Kong. It contains many practical examples and illustrations from case law. Extracts of the relevant legislation and sample shipping documents are annexed in this book for reference. In this second edition, the authors have reformatted some of the materials. The book has been reoriented to concentrate on the parts of the legal framework which are most directly relevant to the logistics and maritime industry of Hong Kong. This new edition takes account of a number of new cases, new international conventions (such as the Rotterdam Rules), and significant changes introduced by legislative amendments since the last edition. 
      The book is intended primarily for students and teachers of transport studies and business logistics management and also provides useful guidance to shipowners, carriers, shipping agents, traders, insurers, bankers, logistics managers, arbitrators, mediators, and lawyers who need to acquire a clear understanding of the key principles in a practical context. 
Felix W H Chan is an associate professor in the Faculty of Law, the University of Hong Kong. 
Jimmy J M Ng is an assistant professor in the Department of Logistics and Maritime Studies, Hong Kong Polytechnic University. 
Sik Kwan Tai is a visiting lecturer in the Department of Logistics and Maritime Studies, Hong Kong Polytechnic University. 
“The material in the book is excellent . . . as a textbook for students and teachers of transport study and business logistics management, as well as a book of general interest to traders, bankers, logistics managers and lawyers.” 
—Mary Thomson, barrister and arbitrator
Click here to order the book.

Thursday, October 29, 2015

Sherif Elgebeily on the War Crime of Hospital Air Strikes (SCMP)

"When apologies for hospital air strikes are not enough"
Sherif Elgebeily
South China Morning Post
30 October 2015
For the second time in less than a month, Médecins Sans Frontières (MSF) is coming to terms with the fallout from errant air strikes, first by US forces in Afghanistan and, this time, allegedly by Saudi forces in Yemen. On both occasions, MSF clearly and repeatedly relayed the coordinates of their locations to all parties. The strikes, then, seem deliberate and in clear violation of international humanitarian law; the bombings appear to be war crimes.
       Article 8(1) of the Rome Statute of the International Criminal Court is unequivocal in its condemnation of "intentionally directing attacks against personnel [and] installations … involved in a humanitarian assistance" as part of an international armed conflict. While the Rome Statute is arguably an international treaty, rather than customary law which is applicable upon states irrespective of whether they have signed and ratified it, international humanitarian workers are substantially protected by the Geneva Conventions of 1949, which are universally applicable. In short, there is no escape from the wrongful act.
      Despite an apology by US President Barack Obama for the attack that killed over 20 in Kunduz, there is yet to be a transparent investigation. On Yemen, there was an admission of a "mistake" but the Saudi-led coalition has subsequently denied responsibility. Rumours are circulating that MSF improperly relayed its coordinates in Yemen, and that the targeted facilities in Afghanistan were under the control of enemy combatants and therefore lost their protected status under the laws of war... Click here to read the full article.

Saturday, October 24, 2015

CCPL Submission on Combatting Domestic and Sexual Violence (HK Legislative Council)

"Submission to the Legislative Council Social Welfare Panel's Subcommittee on Strategy and Measures to Combat Domestic and Sexual Violence"
Centre for Comparative and Public Law
2 October 2015
The Executive Summary of the Research findings (Appendix) makes a number of Recommendations, including: 
1. Set up a multi-agency response network with regular cooperation between police, health services, legal profession, government agencies and NGOs for each case to improve the quality of domestic violence services for ethnic minority victims. This would obviate the need for victims to repeatedly tell their stories and would also save resources and time, particularly where interpreters and third party interveners are necessary to come to a comprehensive view of the situation and conduct risk assessment. 
2. Set up and implement a uniform and coordinated data intake and collection process to record disaggregated data and allow for a systematic review and evaluation of the patterns of help-seeking, follow up and service provision on an ongoing basis. This would assist in informing strategies for intervention to ensure their suitability in cross-cultural settings. 
3. Mandatory and Regular in-service training for front line responders, including the police officers, lawyers, healthcare professionals, social workers and other service providers, in human rights and cultural sensitivity to ensure that knowledge can be harnessed and applied when handling domestic violence amongst ethnic minorities. 
4. Review the quality and impact of existing materials.The experiences shared by the ethnic minority women in their encounters with frontline staff and respondents and the interviews with frontline responders revealed that some of the materials used in cultural sensitivity training contain harmful and negative stereotypes about ethnic minority and immigrant women. 
5. Establish a one-stop shop service centre in the long run for ethnic minority and immigrant women, to improve cultural intelligence and competence to handle the needs of ethnic minority victims and empower them in terms of financial independence, literacy, vocational training and social integration. 
6. Establish specialist agencies for the intake of ethnic minority and immigrant victims of domestic violence, such as those in place in United Kingdom.
Click here to download the full submission.

Friday, October 23, 2015

The Evolution of Fintech: A New Post-Crisis Paradigm? (SSRN)

"The Evolution of Fintech: A New Post-Crisis Paradigm?"
Douglas Arner, Janos Barberis, Ross Buckley
SSRN Legal Scholarship Network
October 2015
Abstract: "Financial technology" or "FinTech" refers to technology enabled financial solutions. FinTech is often seen today as the new marriage of financial services and information technology. However, the interlinkage of finance and technology has a long history and has evolved over three distinct eras. FinTech 1.0, from 1866 to 1987, was the first period of financial globalization supported by technological infrastructure such as transatlantic transmission cables. This was followed by FinTech 2.0, from 1987 to 2008, during which financial services firms increasingly digitized their processes. Since 2008 a new era of FinTech has emerged in both the developed and developing world. This era is defined not by the financial products or services delivered but by who delivers them. This latest evolution of FinTech, led by start-ups, poses challenges for regulators and market participants alike, particularly in balancing the potential benefits of innovation with the possible risks of new approaches.  Click here to download the full paper.  For related posts on FinTech, click here.  This paper and other work by Arner and Barberis were cited extensively in the Our Hong Kong Foundation's policy paper, "The Ecosystem of Innovation and Technology in Hong Kong" (December 2015).

Congratulations to Dr Shitong Qiao on Receiving the Judge Ralph K Winter Prize (Yale Law School)

Congratulations to Dr Shitong Qiao whose JSD dissertation was awarded the Judge Ralph K Winter Prize 2014-15 by Yale Law School. The prize is awarded annually to the best student paper written in law and economics. Dr Qiao's thesis was entitled, "Chinese Small Property: The Co-Evolution of Law and Social Norms". The dissertation investigates a market of informal real estate in China, referenced by the term “small property” (xiaochanquan), as their property rights are smaller/weaker than the big/formal property rights. His dissertation investigates the formation and operation of this market, and how it interacts with the legal system and eventually leads to legal reforms. Based on this case study Dr. Qiao argues that property norms can change more swiftly than property law and serve as imperfect institutional infrastructure for market transition. His dissertation also develops a model for the co-evolution of property law and norms with particular implications for developing countries. Click here for some of Dr Qiao's recent research outputs.

Tuesday, October 20, 2015

New Issue: SSRN Legal Studies Research Paper Series (HKU)

Vol. 5, No. 9, 19 October 2015
Table of Contents

1. Macau’s Nascent Constitutionalism During the Ming-Qing Transition
Jason G. Buhi, The University of Hong Kong Faculty of Law, Peking University - School of Transnational Law

2. Present at the Creation: Nascent Constitutionalism During the First 25 Years of Portuguese Settlement at Macau
Jason G. Buhi, The University of Hong Kong Faculty of Law, Peking University - School of Transnational Law

3. The Potential Contributions of Maryland’s Referendum Laws to the Practice of Referenda in Vietnam (TRƯNG CẦU DÂN Ý BANG MARYLAND (HÒA KỲ)
Jason G. Buhi, The University of Hong Kong Faculty of Law, Peking University - School of Transnational Law

4. Institutionalising Mediation in Hong Kong
A. K. C. Koo, The University of Hong Kong - Faculty of Law

5. Regulation of Digital Financial Services in China: Last Mover or First Mover?
Weihuan Zhou, University of New South Wales
Douglas W. Arner, University of Hong Kong - Faculty of Law
Ross P. Buckley, University of New South Wales (UNSW) - Faculty of Law

Faculty Interviewed on 3rd Party Funding for Arbitration (SCMP)

"Third parties should be able to fund arbitrations in Hong Kong, Law Reform Commission says"
Stuart Lau
South China Morning Post
20 October 2015
Third parties should be allowed to put up funding for arbitration cases in Hong Kong even though such arrangements remain illegal in court cases, government advisers have recommended.
     The Law Reform Commission's proposal makes it the first official body to break the taboo on allowing third parties to take an interest in legal proceedings, amid fears of ambulance-chasing, which refers to lawyers soliciting for clients at a disaster site, and vexatious litigation.
     The suggestion is seen as a way of promoting arbitration which, together with mediation, has been pushed by the Department of Justice as a way to resolve disputes outside court.
     "The reform can bring clear benefits … and enhance Hong Kong's competitive position as an international arbitration centre," the commission's subcommittee on third-party funding for arbitration said as it launched a public consultation on its proposal yesterday.
     Australia, England and the United States already permit parties to arbitration to seek financial support from third parties.
     "Parties considering whether to resolve their disputes in [Hong Kong] by international arbitration are starting to take into account, among others, the potential financing options available," the subcommittee said. "Clarity and certainty of the relevant law concerning third party funding for arbitration will be desirable."
     At present, it remains unclear whether the law of champerty and maintenance, which bans third parties from funding a court case in return for an interest in any subsequent payout, applies to arbitration. No court has yet ruled on whether the 700-year-old legal doctrine - long since abolished in many jurisdictions - applies in such cases.
     Gary Meggitt, director of the Asian Institute of International Financial Law, welcomed the consultation paper and said it would resolve legal uncertainties.
      Explaining the difference between arbitration and litigation, University of Hong Kong legal scholar Eric Cheung Tat-ming said the former could only be initiated by the agreement of all parties, while litigation "can be forced upon by a party"... Click here to read the article.

Sunday, October 18, 2015

Convergence of China's Investment Regimes and Investment Treaty Commitments (CL Lim)

"The Convergence of China's Foreign and Domestic Investment Regimes and China's Investment Treaty Commitments"
Seung Chong and Chin Leng Lim
Journal of International Arbitration
Vol. 32, Issue 5, 2015, pp 461-492
Abstract: The Ministry of Commerce of the People’s Republic of China has issued a Draft Foreign Investment Law that proposes to cause the convergence of the PRC’s foreign and domestic investment regimes. That convergence in its current form will result in existing rights of foreign investors being extinguished or compromised. We discuss the loss of such rights in the light of the types of investors’ remedies that are currently provided for under China’s Bilateral Investment Treaties. In doing so, we show how the issues raised by the newly proposed investment regime can be framed as claims under the various standards of PRC treaty protection and the particular complexities that arise for consideration. This article is an assessment of the propensity and prospect of future arbitration claims concerning a complex draft law that, whether legislated in its current or in an amended form, will have significant commercial and economic implications. This matter is probably the single most important issue today in China corporate practice and we believe it has a strong investment law and arbitration dimension that demands to be explored and explained.  Click here to view the article.

Saturday, October 17, 2015

CCPL Submission on the Review of the Environment, Social and Governance Guide (HK Exchanges & Clearing)

"Submission for Public Consultation on the Review of the Environmental, Social and Governance Guide"
Farzana Aslam
Centre for Comparative and Public Law
September 2015
Introduction: The Centre for Comparative and Public Law (CCPL) at the University of Hong Kong welcomes the opportunity to comment on the Hong Kong Exchange (HKEx) Consultation Paper on the Review of the Environmental, Social and Governance Reporting Guide (‘the Consultation Paper’). CCPL commends the HKEx’s desire to improve the quality, sustainability and reputation of the Hong Kong market, and to align Hong Kong with international best practice related to sustainability and environmental, social and governance (ESG) reporting. CCPL broadly supports most of the proposals put forward by the HKEx in its Consultation Paper including the need to upgrade many of the environmental and social disclosure requirements to require issuers to report on a ‘comply and explain’ basis... Click here to download the full submission.

Faculty Interviewed on the Ken Tsang Police Assault Case (SCMP)

Stuart Lau, Samuel Chan and Christy Leung
South China Morning Post
17 October 2015
A decision by prosecutors to synchronise actions against an Occupy protester charged with assaulting police and seven officers who allegedly beat him up means the order of their trials could affect witness credibility, lawyers said yesterday.
     A complicating element in the legal drama is the dual identity of Ken Tsang Kin-chiu, who is in one case a victim and potential prosecution witness while in the other a defendant. He is due to appear in Eastern Court on Monday, the same day the seven policemen are due to appear in the same court, in a move justice officials insist will ensure "fairness".
     Yesterday Tsang and his lawyers spent two hours inside police headquarters in Wan Chai but later declined to comment on the reason they were there.
     Tsang's case will be handled by magistrates while the officers' case will be taken up at a higher level in the District Court.
     Cases can proceed faster before magistrates than in the District Court, and timing could bear on the outcome of each case because the credibility of witnesses could be put into doubt. "If a defendant was convicted and had a criminal record, it might affect the judge's impression on the credibility of his evidence in another case," said Jeffrey Tam Chun-kit, a barrister who has handled criminal cases arising from protests.
     University of Hong Kong legal scholar Professor Simon Young said the result of one case could offer reference for the other. "At some point, the courts will need to address the order of trials. I would think that those advising Mr Tsang would want to see the trial of the seven officers handled first," Young said. "If there are convictions, it will provide the factual basis for pre-trial motions ahead of Tsang's trial. In particular, there will be a basis to argue for a stay of Tsang's proceedings on grounds of police brutality."
     Fellow HKU legal scholar Eric Cheung Tat-ming said the Department of Justice's statement on Thursday did not say whether any of the seven officers was involved in four further charges against Tsang of resisting arrest. If they were, they could appear in his case as witnesses... Click here to read the full article and for related post on this blog, click here.

Friday, October 16, 2015

Sherif Elgebeily on a 'Royal Rumble' in Syria

Sherif Elgebeily (CCPL)
The Conversation
15 October 2015
As a child, I would eagerly await the annual World Wrestling Federation (now WWE) “Royal Rumble” – 30 of the best wrestlers, all in one ring, fighting it out in a lengthy and often brutal (and yes, scripted) affair over the course of hours to be the last man standing.
     The most entertaining part, I found, were the “stables” – groups of wrestlers who joined forces only to knock out stronger opponents like Andre the Giant. At the end of the showcase, when only a few wrestlers remained, the true agenda emerged. Any “stables” forged to get this far were tossed aside like prop chairs. Without a common enemy, the wrestlers turned on each other.
     In Syria, a disastrous “Royal Rumble” is now under way.
      While working on the Iraq Team of the UN Department of Political Affairs in 2008, I learned the importance of interstate cooperation in the pursuit of a shared goal. Having also researched the decision-making process of the UN Security Council, I am aware, too, of the failures that emerge when countries cannot reach mutual agreement.
United against ISIS
Russia’s military intervention to fight the Islamic State shares some of the common goals of the anti-Assad alliance involving the US, UK, Australia, Canada, France, Turkey and no less than six regional Arab States. All sides have already intervened to varying degrees with military force, bombing or supporting the bombing of targets each claims are strategic. But strategic to whom?
     On the surface, Russian strikes can be interpreted as a lifeline for Syria against the creeping lava of ISIS, which destroys everything in its path and stubbornly solidifies. After all, anyone bombing ISIS is good news, right?... Click here to read the full article.

Thursday, October 15, 2015

A Decent Respect: Honour in the Life of People and of Nations (New Book)

Hochelaga Lectures 2013-2014

A Decent Respect: Honour in the Life of People and of Nations
Kwame Anthony Appiah
Edited by Puja Kapai
Published by the Faculty of Law, University of Hong Kong, 2015, 110 pp.
Other contributors include: Vincent Chung, Jose Manuel Diokno, Li Hui, Puja Kapai, Joshua Wong, and Anna Wu.
Excerpt from the Foreword by Puja Kapai
As part of the 2012-2013 Hochelaga Lectures, Professor Anthony Kwame Appiah discussed the concept of respect and honour in the life of people and of nations under the general theme of ‘civic honour’ in terms of the individual and collective dimensions of this construct. He advances a compelling account of how the use of the notions of honour, respect and shame can inspire much-needed conversations locally, regionally and globally, about our expectations of each other as individuals living in community with each other in a shared land but also, how these can be fruitfully applied to shape progressive discourse across nations in contested areas of cultural, civic and national life.
      In his first lecture, entitled “How do I save my honour?”, Professor Appiah invites us to reflect on the answers to the critical questions that we in Hong Kong need to seriously consider as we fervently await the day when we will have the power to vote for our own leaders, who will be accountable to the people of Hong Kong. As Professor Appiah alludes to in his first lecture, in order to prove ourselves worthy of the honour of the right to vote for our government, we must begin to act now as citizens who aspire to live in a thriving democracy would. We need to ask, what are our responsibilities and how can each of us contribute to the effective functioning of the society?     
     Recent events have forced the citizens of Hong Kong to be jolted out of their slumber to participate and actively contribute to the ongoing debate about their future under the “One Country Two Systems” framework. As sectors of our society turn the likes of Benny Tai Yu Ting and Joshua Wong Chi Fung into heroes or enemies depending on which side of the political spectrum they fall on, we are implicitly reflecting on the questions Professor Appiah so aptly raises: ‘What kinds of behaviour fall below the level that entitles you to citizen honour — the political respect of your fellow citizens?’ and ‘What is the fair share of the burdens of maintaining [the Hong Kong that we were promised or we envision] that each of us owes…?’ What types of behaviour do we show contempt for on the grounds that it is‘inconsistent with the norms that govern our shared life’? How can we, in Hong Kong and elsewhere, redefine the notions of honour and shame to motivate people to do what we now know to be an indispensable part of our civic duty in public life?
     Professor Appiah’s lecture draws on numerous examples to illustrate just how effective notions of ‘honour’ and ‘shame’ can be when channelled to elicit desirable conduct in individuals as a result of the way in which our psychological DNA as human beings triggers impulses to navigate towards or away from what we value as right and wrong. Crucially, Professor Appiah demonstrates how the monitoring and judgment we all routinely engage in by drawing on the existing honour code can be usefully deployed to push ourselves and others to strive for higher moral standards. However, this requires an open discussion of and reflection on the values we ascribe to basic civic activities that each citizen should partake in. 
     Professor Appiah’s second lecture builds upon the foundations of the idea of civic honour presented in the first lecture by focusing on its collective dimension in the form of ‘national honour’. In “A Decent Respect to the Opinion of Mankind,” Professor Appiah uses several examples, including female genital cutting, honour killings, foot-binding and slavery, to examine and illustrate how, through the strategic use of the concepts of honour and shame, national and cultural practices that are recognised as morally problematic and even, gross violations of human rights, can be effectively and gradually eliminated. As his account of the processes and conversations between nations in relation to the abandonment of the practices of slavery and footbinding illustrates, the most crucial component of a successful strategy to facilitate change is the due and respectful engagement of the community or society in which the practice is embedded. Without the careful and strategic enlistment of the notions of honour and shame, it is unlikely that a constructive dialogue can be had to facilitate change that is lasting and indeed, may have unintended consequences or suffer from a backlash.
     These are crucial messages and ideas that should find a permanent home in the toolkit of any human rights advocate who is invariably engaged in a necessary but controversial exercise (depending on one’s mandate, standing and approach to advocacy) of seeking to garner a seismic shift in values from the outside. That said, however, as Professor Appiah beckons, we, as citizens of the world and in the interests of our shared humanity, have a civic duty to raise the bar of our communities as a whole, to aspire to higher ideals...  Contact Jean (jeanko@hku.hk) to order a copy of the book.

Wednesday, October 14, 2015

Melissa Loja (PhD Candidate) Wins 2014 Willoughby Prize for South China Sea Article

Congratulations to Melissa Loja (PhD candidate) on winning the 2014 Willoughby Prize for the best article published in the Journal of Energy & Natural Resources Law.  The winning publication was titled "Is the Rule of Capture Countenanced in the South China Sea? The Policy and Practice of China, the Philippines and Vietnam" and was reported on in this blog in December 2014.  About the Willoughby Prize: In memory of Geoffrey Willoughby (1936-1989), one of the leading contributors to the development of United Kingdom oil and gas law both as practitioner and scholar, his partners in Herbert Smith, and the Trustees of the Energy, Petroleum, Mineral and Natural Resources Law and Policy Education Trust, in 1991 created a fund for the award of a Willoughby Prize. The Prize is awarded each year to the author or authors of an article of outstanding merit published during the year in the Journal of Energy & Natural Resources Law
      Every article submitted for publication in the Journal will be taken into consideration unless the author explicitly requests otherwise. In making his recommendation the Editor will have particular regard to the desirability of encouraging younger legal scholars, whether engaged in academic life or in legal practice, to undertake research on legal issues relating to energy, petroleum, minerals and natural resources law and policy. 

Tuesday, October 13, 2015

Susan Finder on China Domestic Violence and US-China Cooperation on Judicial Reform

"Why Hong Kong must point out failings of mainland's draft law on domestic violence"
Susan Finder (Adjunct Professor)
South China Morning Post
13 October 2015
The tragedy of an injured and malnourished seven-year-old girl from a cross-border family dramatically highlights why Hong Kong needs to express its views on a draft anti-domestic violence law issued by the National People's Congress Standing Committee last month for public comments.
      Hong Kong is affected by such legislation because many of the domestic violence cases that occur in the city are found in cross-border families. According to a study in Shenzhen, 55 per cent of Shenzhen families have experienced domestic violence, though it is unclear how many of those families have children who study here in Hong Kong. Many of the domestic violence issues the city faces are also prevalent on the mainland.
     Hong Kong has a great deal of expertise in such issues against the backdrop of a multi-ethnic, primarily Chinese society. The city's organisations concerned with children, women, the elderly and ethnic minorities should work with the Law Society or volunteer lawyers to submit comments on the draft legislation, because domestic violence experts who have worked with mainland authorities on improving enforcement have described the draft as disappointing.
     Inadequacies with the draft include the following.... Click here to read the article.

Susan Finder (Adjunct Professor)
Supreme People's Court Monitor Blog
13 October 2015
One of the lesser known outcomes of Xi Jinping's trip to the United States is the commitment by the United States government to work with China on judicial reform. 
     The official White House press release (mirrored in statements by the Chinese Ministry of Foreign Affairs) states: 
the United States and China commit to conduct high-level and expert discussions commencing in early 2016 to provide a forum to support and exchange views on judicial reform and identify and evaluate the challenges and strategies in implementing the rule of law. U.S. participants are to include leading members of the U.S. judiciary, U.S. government legal policy experts, and officials from the Departments of Commerce and Justice and the Office of the United States Trade Representative. Chinese participants are to include officials from the Central Leading Group on Judicial Reform, leading members of the Chinese judiciary, and Chinese government legal policy experts. This dialogue is to result in an improvement in the transparency and predictability of the business environment. This dialogue does not replace, duplicate or weaken existing regular bilateral legal and human rights dialogues between the United States and China. 
This statement deserves more attention from the legal community than it has received so far. Some brief comments below... Click here to read the full article.

Monday, October 12, 2015

New Volume of Asia-Pacific Journal on Human Rights and the Law Published (2015)

Editors-in-Chief: Simon NM Young and Kelley Loper
Publisher: Brill, Leiden

Special Section on Lao People’s Democratic Republic
Introduction
Rhona K. M. Smith 1-7

Women’s Rights in Intellectual Property and Traditional Knowledge Protection in Lao PDR
Champathong Phochanthilath 9-25

The Right of Children in Accessing Primary Education: Vientiane Province Case Study
Khonsavanh Vongvannasay, Khamphang Vongphachanh, and Vilay Langkavong 26-41          

The Right to Access a Lawyer in Laotian Criminal Law
Bounmy Ladsamyxay 42-54

Articles
Investment Promotion as Progressive Realization of Economic and Social Rights
Johanna Aleria P. Lorenzo 55-103

The Politics of Domestic Implementation of International Human Rights Law: A Case Study of Sri Lanka
Deepika Udagama 104-149

Equality and Singapore’s First Constitutional Challenges to the Criminalization of Male Homosexual Conduct
Jack Tsen-Ta Lee 150-185

Click here for more information information about the APJHRL and for instructions on article submission.

Sunday, October 11, 2015

Rebecca Lee on the Limits of 'Politics' in Charity Law (J of Civil Society)

"Charity without Politics?  Exploring the Limits of 'Politics' in Charity Law"
Rebecca Lee
Journal of Civil Society
Vol. 11, Issue 3, 2015
Abstract: In Anglo-American common law jurisdictions, there are well-entrenched constraints on political engagement by charities. However, three recent decisions in Australia, New Zealand, and England have either relaxed these constraints or shown early signs of a jurisprudential shift. Against the background of recent charity law reforms in Hong Kong, which have sparked a renewed interest in the relationship between charity and politics, and the limits on the pursuit of political purposes by charities, this article examines the justifications for the political constraints and their underlying assumptions. It argues that while the blanket rule against political purposes should not be maintained, political purposes should not, in themselves, be considered sufficiently charitable. In defining the boundaries between charity and politics, one must balance a charity's legitimate political expression against its pursuit of private gain in the name of charity. This article therefore proposes that whether political activities are permissible should depend on whether they pertain to the promotion of a common good exclusively, leaving no room for private gain occasioning from these activities.

Saturday, October 10, 2015

New Updates on Chinese Courts (Susan Finder)

"Judge Xi Xiaoming and his vanishing assets"
7 October 2015
Although Chinese judicial reforms include establishing a trial-centered judicial system that provides better protection for human rights (including property rights), under Party disciplinary regulations senior Party officials (such as former Supreme People’s Court Vice President Xi Xiaoming, subject of an earlier blogpost), often have property confiscated or other property punishments imposed at the conclusion of Party disciplinary proceedings. This means that confiscation of assets occurs before an official’s case is transferred to the procuracy and heard by the courts. According to the official statementon the disposition of Judge Xi’s case:
(He) was ordered to make restitution of certain amounts that were in violation of discipline;the issues related to his suspected crimes and related amounts are transferred to the judicial organs for handing.责令退赔违纪款;将其涉嫌犯罪问题及涉款物移送司法机关依法处理.
The wording is similar to official statements issued in relation to other senior officials investigated by the CCDI and the same language is to be found in reports on the dispositions of local Communist Party disciplinary investigations... Click here to read the full post.

3 October 2015
Buried in the depths of documents issued in the course of this year are the outlines of the way the Supreme People’s Court (Court) intends to create a corps of judges in which litigants, domestic and foreign, have faith will provide justice. The many measures set out in the 4th Five Year Judicial Reform Plan raise the competency bar for judges. A more litigious and rights conscious public, the increasingly complex economy and greater number of cross-border transactions and interaction, as well as smaller number of judges to hear more cases means that judicial training is an important part of of preparing Chinese judges for the new normal.
      The broad outlines of the Court’s plans for judicial training are set out in the following documents:
  • the Court’s latest 5 Year Training Plan, for 2015-2019, issued in June, the framework document;
  • the September 17, 2015 Communist Party Central Committee/State Council document on the open economy, calling for improving foreign-related competence in the judiciary; and
  • the September 25 White House press release, in which the United States and China commit to conduct high-level and expert discussions commencing in early 2016 to provide a forum to support and exchange views on judicial reform and identify and evaluate the challenges and strategies in implementing the rule of law.
Click here to read the full post.
     Susan Finder is a Visiting Fellow in the Centre for Chinese Law and an Adjunct Professor in the Faculty of Law in the fall semester 2015.  She recently spoke at the European China Law Studies Association's 10th Annual Conference held at the University of Cologne, Germany, on 26 September 2015.  She spoke on 'Assessing China's Court Reforms after One Year' in the panel on Chinese Courts and Recent Judicial Reforms.  She will also be speaking on the rule of law and criminal justice/fair trials at the one-day Symposium on Rule of Law and the Magna Carta on 16 October 2015, to be held at Guangzhou University, sponsored by the British Consulate.

Tony Carty on the HKU Academic Freedom Issue (SCMP)

Tony Carty (Visiting Professor)
South China Morning Post
8 October 2015
It is widely thought that the decision by the University of Hong Kong council to reject Johannes Chan Man-mun's appointment as a pro-vice-chancellor is connected with the fact that he is "an internationally renowned legal scholar and administrator who champions the fundamental values of human rights and the rule of law". The failure to provide credible reasons for not appointing him is, therefore, a "litmus test for academic freedom", according to a Post article by Jerome A. Cohen and Alvin Cheung.
     These sentiments are echoed by Chan himself who says that a publicly funded institution, acting in a matter of general interest, should be transparent in its reasons for decisions. There is even talk of a judicial review to see whether the institution took into account irrelevant considerations in reaching its decision.
      Any influence of the Hong Kong government, which has six nominees on the council, will be widely assumed to be nothing more than a "diktat" from Beijing. So, it is easy to widen the Chan nomination dispute to include evidence of a failure of China's "trumpeted support for the rule of law", particularly in view of the "personal smear attacks" on Chan by the pro-Beijing press in Hong Kong (Cohen and Cheung again). Chan has counted 350 such attacks.
      So it may appear that Beijing is directly engaged in an attack on the academic autonomy of HKU, one more incident in a global struggle where the Chinese government is itself seen as incompatible with "the fundamental values of human rights and the rule of law". No wonder Chan is seen as a threat! To my knowledge, the content of these smears has not been addressed in English-language media in Hong Kong...
      If there was to be a judicial review of these smears, I would expect any judge to say that they are "fair comment". That is, they come within a margin where reasonable people could hold differing views.  While I was a member of the faculty, I invited many of my senior colleagues, including the present dean, to comment on these criticisms and received no answer...  Click here to view the full article.  A Chinese translation of the article is available here.

Friday, October 9, 2015

Hualing Fu Writes on President Xi's New Anti-Corruption Campaign

"Wielding the Sword: President Xi's New Anti-Corruption Campaign"
Hualing Fu
in S Rose-Ackerman & P Felipe Lagunes (eds), Greed, Corruption, and the Modern State (Edward Elgar, 2015) 134-157
Corruption closely correlates with legitimacy. While a perceived pervasive, endemic corruption undermines the legitimacy of a regime, a successful anti-corruption campaign can allow a regime to recover from a crisis of legitimacy. This is the rationale behind the periodical campaigns against corruption that have been conducted by the Chinese Communist Party. Political leaders in China have found it expedient to use anti-corruption campaigns to remove their political foes, to rein in the bureaucracy and to restore public confidence in their ability to rule. Through anti-corruption campaigns, emerging political leaders consolidate their political power, secure loyalty from political factions and regional political forces, and enhance their legitimacy in the eyes of the general public. This paper provides broadly outlines the political nature of the Party’s anti-corruption campaign and the way in which corruption and anti-corruption are used as tools for the concentration of political power.  Click here to download the full chapter.

Thursday, October 8, 2015

Maisie Ooi on the Effect of Intermediation on Investor Rights (LQR)

"Intermediation and its Effect on Investor Rights"
Maisie Ooi
Law Quarterly Review
2015, Vol 131, pp. 536-542
Secure Capital SA v Credit Suisse AG [2015] EWHC 388 (Comm); [2015] 1 Lloyd’s Rep. 556 considered an issue of immense importance to investors who purchase and hold securities on an intermediated holding system. Do they enjoy the same rights in relation to those securities as would have accrued to them had the securities not been on the intermediated system? The answer was decided by the court’s choice of the applicable law, underlining the importance of conflicts law to corporate and securities transactions these days. As these transactions are increasingly cross-border it is no longer sufficient for corporate and securities lawyers to be familiar only with the substantive law relating to these matters. 
     This note analyses the scope and application of the court’s choice of the governing law of the securities to determine the investor’s rights in relation to intermediated securities. The securities were two tranches of notes (Notes), a form of debt security, which had been issued by Credit Suisse. Secure Capital sued Credit Suisse for breach of a term of the Notes that it had taken all reasonable care to ensure accuracy of information on the Notes. 
     The Notes had been issued in bearer form which meant that transfer of title was by delivery of their certificates. Had Credit Suisse (very unusually) decided against placing the Notes on an intermediated system, Secure Capital, which acquired some of the Notes at issuance, would have been issued with the relevant certificates making it the legal owner. This would also have made Secure Capital counterparty to Credit Suisse in relation to the Notes contracts. Secure Capital would, then, indubitably have been entitled to sue for breach of the terms of the Notes. 
     Credit Suisse had however, as is common these days, placed the Notes on an intermediated system, specifically Clearstream. This was done by depositing with the Common Depository, which held the Notes for Clearstream, a global certificate representing the entire issue of each tranche, constituting it their legal owner. In place of the certificates Secure Capital’s acquisition was reflected by a credit entry in its securities account with its intermediary on Clearstream.... Full article is available from Westlaw or from the author.

Wednesday, October 7, 2015

BBC News Features Puja Kapai's Research on Ethnic Minorities

"Hong Kong minorities 'marginalised' in school"
Jody-Lan Castle
BBC News
7 October 2015
Ethnic minorities in Hong Kong are "marginalised" by the education system, says a university study.
It found children of minority families do not get enough support to learn Cantonese - putting them behind in school and causing long-term problems in the jobs market.
    "One of the main barriers to equal access has been a de facto racial segregation of ethnic minority students from Chinese students in the public school system," says University of Hong Kong law professor, Puja Kapai, who carried out the study.
     The practice of communities studying separately has also meant that children grow up without interacting with other cultures.
     Hong Kong is home to 365,000 ethnic minority people, making up 6% of its total population. Communities of Indians, Pakistanis, Nepalese and Filipinos have lived in Hong Kong for generations.
     But the city still lacks a curriculum for children speaking Chinese as a second language, which would enable them to learn Cantonese, a requirement for many jobs and university places.
     "The language requirement that forms a barrier for ethnic minorities to receive equal access in education and the labour market, can be seen as an indirect form of discrimination," says Raymond Ho, a senior member of the Equal Opportunities Commission in Hong Kong.
      But he is confident that since the government made it unlawful to discriminate on the grounds of race in 2009, there is more public awareness of the needs of ethnic minorities.
     In the past there have been claims that Chinese locals are "less accepting" of people with darker skin. That was the claim of a report in 2008 from Unison, a group that campaigns for the rights of ethnic minorities.
   This acceptance level was found to be lowest in the education sector...
Limited options
Prof Kapai's report emphasises interlinked problems for minority groups.
      A lack of Cantonese language skills will present barriers in employment, leading to an increase in poverty, and difficulty accessing healthcare.  Cantonese language proficiency is a core requirement for some jobs, such as the civil service.  Typical occupations taken up by ethnic minorities are in the catering, construction and manual labour industries.... Click here to read the full article.

Sherif Elgebeily on Russia's Involvement in the Syrian Conflict (SCMP)

Sherif Elgebeily (CCPL)
South China Morning Post
8 October 2015
It has been over a quarter of a century since the collapse of the USSR, the fall of the Berlin Wall and, accordingly, the thawing of the cold war that crippled international relations for decades in the mid-to-late 20th century. But it seems that Russia's decision to enter the war in Syria with military strikes - as opposed to simply bolstering and protecting President Bashar al-Assad on the international stage and supplying arms - has jolted East-West relations back to a time of high tensions.
     Syria looks set to become the battleground for a proxy war between titans: pro-Assad Russian forces and the anti-Assad Western coalition that includes the US, France and the UK.
     Syria therefore threatens to be more dangerous than the post-millennial wars in Iraq, Afghanistan or Ukraine, where foreign forces were fighting local militaries or populations. The conflict in Syria pits East against West in ways not seen since the Korean or Vietnam wars.
     For Syria, its population, its heritage and its infrastructure, a proxy war would be catastrophic - it is yet more calamity to add to the existing menaces of Assad and Islamic State
     Under the guise of fighting Islamic State, both sides have intervened with military force, bombing targets each claims are strategically linked to the group. Yet despite superficial US-Russian talks on deconfliction of Syrian airspace last week, designed to avoid overlap in operations and mid-air collisions, the first Russian strikes not only targeted areas that were not affiliated with Islamic State, but focused on the US-backed Syrian opposition fighters that pose a threat to Assad instead. 
     Indeed, Russian President Vladimir Putin has said Russian forces are in Syria to rescue the Assad administration. There can be no doubt as to the motives behind Russia’s intervention....
     Russia's intervention in Syria is legally sound under international law. Russian chief of staff Sergei Ivanov has stated that the Assad government explicitly requested Russian military assistance.
     From a Russian standpoint, it may also be politically sound; with a military base in Tartus dating back to the era of the Soviet Union, and a historic Russian-Syrian alliance spanning over four decades back to Assad's father Hafez, Russia's last strategic bastion outside the former USSR is worth protecting.... Click here to read the full article.

Tuesday, October 6, 2015

Kelvin Kwok on Fair Use and the Google Books Case (Yale J L & Technology)

Yale Journal of Law & Technology
2015, Vol. 17, pp 283-318
Abstract: This Article examines two important features of many copyright fair use cases: transformative use and commercial intermediation. While the issue of transformative use has arisen in many fair use cases, there is a lack of consistency and clear guidance on the meaning of “transformativeness” and how the degree of transformativeness is to be assessed. Additionally, in analyzing commercial use, courts have largely failed to appreciate the distinctive role played by “commercial intermediaries” in facilitating socially beneficial uses of copyrighted works. This Article advances economically grounded proposals for improving the way in which courts analyze transformative use and commercial intermediation. First, courts should focus on the economic effects of transformation instead of employing a purely conceptual analysis. In particular, courts should ascertain any complementary or substitutive effects as well as the cost and innovative-efficiency implications of the use: the more transformative the use, the more it tends to minimize market harm to the copyright owner and maximize social benefits such as transaction-cost economies and follow-on innovation. Second, courts should view commercial intermediaries favorably insofar as they facilitate educational or other beneficial fair uses of copyrighted works through cost-efficient production or substantial innovative investments. In other words, courts should view the commercial use in context and recognize that commercial uses may nonetheless produce social benefits that substantially outweigh any harm caused to copyright owners. This Article uses the 2013 Google Books decision as a primary case study, supplemented by related cases from the United States and abroad, to illustrate these arguments, concluding that the court’s decision to uphold Google’s fair use defense for Google Books is well-supported by the complementary relationship between Google Books and copyrighted books, Google’s substantial investments in promoting productive uses of books through Google Books, and transaction-cost and innovative-incentive considerations.  Click here to download the full article.

Monday, October 5, 2015

Is Cooperation Possible Between Hong Kong's Legislature and Executive?

Simon Young
South China Morning Post
6 October 2015
As the Legislative Council prepares for its last year before the 2016 election, it is timely to reflect on its relationship with the executive branch. In his speech last month, Zhang Xiaoming , director of the central government's liaison office in Hong Kong, spoke of the Basic Law ideal that there be "cooperation" between the two branches and "checks and balances of power". With glass throwing in the chamber, endless filibustering and the ongoing saga of approval for the innovation and technology bureau, cooperation seems far from reality.
      Zhang also made this ambiguous statement about the relationship: "There is cooperation in checks and balances and there are checks and balances in cooperation." Was he simply trying to be clever or was there something more substantive to those words? If it was the latter, then let me try to flesh out what might have been intended.
     Let's start with "checks and balances in cooperation". I think this means that checks and balances should be exercised with mutual respect for the authority and powers of the other branches. It implies that each branch knows its own limits and does not overreach into another branch's sphere of authority. In a 2013 judgment of the Court of Final Appeal, non-permanent judge Sir Anthony Mason took note of the limits on courts in judicial review. He wrote: "The separation of powers may deny jurisdiction to the courts when the function involved is exclusively the province of the legislature or the executive". Courts back off "where a political rather than a legal solution may be called for" or when "courts are not institutionally equipped or competent to deal with the issues". The legislative and executive branches should follow this example of having a self-awareness of, and respect for, the limits of each branch's authority, so as to achieve better cooperation.
      Does "cooperation in checks and balances" mean anything different? I offer this interpretation... Click here to read the full article.

P.Y. Lo (PhD 2012) Marks the Anniversary of the HK Umbrella Movement

"Back to the Legal Basics: A Note at the Anniversary of the Hong Kong Umbrella Movement"
Dr. P.Y. Lo (PhD 2012)
ICONnect
3 October 2015
The Umbrella Movement erupted in Hong Kong, a Special Administrative Region (SAR) of the People’s Republic China (PRC), on 28 September 2014 when protestors began to occupy major thoroughfares in mainly three busy business and commercial districts in Hong Kong after the police failed to disperse them using CS gas and pepper spray. These unlawful occupations lasted for 79 days and came to an end with the removal of the last protestors by members of the police said to be assisting in the execution of several court orders made at the suit of private transportation businesses.
      The Umbrella Movement was the unintended culmination of a course of advocacy by various political factions in Hong Kong in 2014 to threaten to use civil disobedience tactics to force the Central Authorities of the PRC to grant at the next stage of the development of Hong Kong’s political system in 2017 a method of election of the Chief Executive that is “genuinely democratic universal suffrage” and the Central Authorities’ substantive rejection of such a demand by a Decision of the Standing Committee of National People’s Congress (SCNPC) adopted on 31 August 2014 (the 8.31 Decision).
      This Note marks the first anniversary of the Umbrella Movement by examining the substantive provisions of the 8.31 Decision as to how restrictive they are and whether they can or cannot be justified as “reasonable restrictions” of a Hong Kong SAR permanent resident’s rights to vote and to be elected, which are guaranteed under Article 26 of the Basic Law of the Hong Kong SAR.
      Although the Hong Kong SAR Government’s proposal for amending the method of selecting the Chief Executive in 2017 by universal suffrage was rejected by the Legislative Council in farcical circumstances on 18 June 2015, the first anniversary of the Umbrella Movement has presented an opportunity for all those concerned to re-focus on the debate about the direction of Hong Kong’s political system for the mid and long-term, not only because the pre-existing electoral method for electing the Chief Executive (based upon an Election Committee composing of four sectors of a total of 1,200 persons elected to represent various sub-sectors in one of those sectors) will continue to be the electoral method for the Chief Executive election in 2017, but also due to the legal bind and the political reality that any future move in developing the Chief Executive electoral method towards a method by universal suffrage will continue to have the 8.31 Decision as the starting point.
      I had earlier in this blog in February 2014 outlined the current electoral method for electing the Chief Executive and considered what the Basic Law of the Hong Kong SAR, particularly Article 45 thereof, envisages to be the electoral framework for returning the Chief Executive of the Hong Kong SAR by universal suffrage. More debates had followed, which led to the 8.31 Decision. The analysis I am going to embark on follows recent scholarship on how the SCNPC works in law-making and extends the coverage to decision-making said to be in accordance with law, which might not be normatively different. The analysis is also necessary to enable the stakeholders (the Central Authorities included) to view the legal position dispassionately and take more rational positions in future negotiations, including revisiting the 8.31 Decision at appropriate time and circumstances... Click here to read the full article.

Sunday, October 4, 2015

CCPL Publishes Empirical Study on Domestic Violence and Ethnic Minority/Immigrant Victims

Press Release: "HKU Empirical Study on Help-Seeking Behaviour of Ethnic Minority and Immigrant Victims of Domestic Violence Reveals Institutional Incompetence of Frontline Responders"
     Existing protections and institutional capacities to effectively combat domestic violence continue to be challenged by cultural and religious frameworks that predominate individuals’ private and public lives. Inadequate attention to the differences in value systems (internal factors) and personal circumstances that impact the capacities (external factors) of ethnic minority or immigrant victims to access relief measures effectively forces the women to live at the peripheries of society, in isolation and grossly vulnerable to future violence and at risk of falling through ‘the justice gap’. 
      The Director of Centre for Comparative and Public Law at the University of Hong Kong, Ms. Puja Kapai, critically examined the assumptions underlying existing laws and policies governing protection against domestic violence in a recent Study. Upon an intersectional impact assessment and analysis of the responses of 100 participants, the findings in the Study bear out the importance and indispensability of accounting for factors that impact help-seeking behaviour of ethnic minority and immigrant women, including race, culture and religion, language barrier, financial dependence on their partners, immigration status, their perceptions of the legal system and frontline responders to domestic violence, and lack of relevant legal and practical knowledge. Furthermore, institutional incompetence of frontline responders on multiple levels often deters ethnic minority victims from seeking help from existing resources when they face domestic violence.  
      The study was presented at a HKU seminar on 3 October 2015, deputations were made in the Legislative Council on 6 October 2015 and a press conference with legislator Fernando Cheung and others was held afterwards.  For media coverage of the report and its impact, see on.cc (Chinese), EJInsight, immediahk.net (Chinese), yahoo (Chinese), Hong Kong Standard, South China Morning Post, and FinTV (Chinese) .  To download the report's executive summary, click here, and to access the submission to the Legislative Council, click here.  

Friday, October 2, 2015

Puja Kapai on the Issue of Undocumented Children in Hong Kong (RTHK)

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"RTHK's Vicky Kung spoke to local NGOs and lawyers about cases of 'undocumented' children and young people and why their parents choose to live with their families under the radar."  Puja Kapai was asked why there were no statistics on the prevalence of the problem.  Click here to view the video interview.

Yash Ghai's Statement on the HKU Council's Decision of 29 September 2015

I was shocked to learn that the Council of Hong Kong University has rejected Professor Johannes Chan's nomination as the University's Pro-Vice Chancellor. The reasons given by the Council are spurious and totally unbecoming the Council.
     I was Professor Chan's colleague for several years at the Faculty of Law at HKU. We are both public law teachers and collaborated on several research projects. He is also a distinguished lawyer who has participated in several leading cases on constitutional and administrative law.
      It is absurd to say that he is not qualified to "process" job applications because he does not have a PhD. Some of the world's leading law professors and scholars do not have a PhD degree. This is the case also at Hong Kong's own distinguished universities, including HKU and and Chinese University of Hong Kong. Certainly in my period at the HKU, the appointments boards usually had only a minority of members with PhDs. When I was law student, first at Oxford, and then Harvard for graduate studies, not one of my teachers had a PhD! Even my own study for the Ph D degree at Oxford was supervised by a professor who had merely a BA--and was acknowledged as one of the most distinguished British professors of public law.
      To say that Professor Chan has seldom published in academic journal or is seldom the "key author of the publication" is a deliberate attempt to vilify him. I collaborated with him in writing and editing two books, one on human rights in Hong Kong, following the adoption by the Legco of the Hong Kong Bill of Rights Ordinance, and the other on the decision of the Court of Final Appeal in the right of abode case, soon after the Basic Law came into force. Chan edited most of the chapters, co-authored one with me, and one on his own, in the first of these books. In the second book, he took responsibility for editing contributions in the Chinese language, and wrote a chapter himself. Both these books were well received and provoked considerable debate--as a good book should. Two years ago in a book that I edited with Professor Simon Young, on the first 13 years of the Court of Final Appeal and that of CJ Andrew Li, Chan contributed an excellent chapter on public law. He has published articles in well known law journals, in Hong Kong and abroad.
      To say that his achievement is "not even comparable to an assistant professor's", shows the spite and vindictiveness of the Council, and its determination to get rid of Chan at any cost--or trickery. In all my years at the HKU, I cannot remember the Council stooping so low.
     Professor Chan has also written about Hong Kong's law in popular journals and newspapers, to educate ordinary people and to stimulate debate--which is also the responsibility of a good law teacher and professor. His involvement with cases in the Hong Kong courts is also consistent with a scholar's contribution to the development of the law. Developing good working relations with the judiciary and the legal profession, which Chan has done with great success, is also often regarded as the responsibility of a law teacher. His contribution to the reform of law is well known, through litigation and research, contrary to the claim of the Council that his work has been of "low impact".
     It is also a grave misrepresentation to say, as a member of the Council is quoted as having said, that Chan was elected Dean of the Law Faculty because he was "considered a nice guy". He is undoubtedly a nice guy. But before he became the Dean, he was the head of the Law Department. All the students and teachers had ample opportunities to see his leadership at close quarters. It is because we were convinced of his outstanding abilities, in giving leadership qualities, fundraising, relations with the judiciary and the legal profession, and a vision of the Faculty as a leading centre of legal scholarship, that we elected him as Dean. All the expectations that we had of him have been fulfilled. But there is no doubt that his achievements were at the sacrifice of his scholarship.
      As a long serving member of the HKU and now an Emeritus Professor, it grieves me greatly to see the Council turn to these nasty tricks to deny Professor Chan, a distinguished scholar and administrator, the office of the Pro-Vice Chancellor, in order -- one must assume -- to appease the Chinese government. Soon after the resumption of sovereignty, the HKU and its Governing Council, stood up for Hong Kong's high standards of the rule of law and the rights and freedoms of its people (even to the extent of effectively dismissing a Vice-Chancellor for lack of integrity and taking orders from the Chief Executive, himself under orders from Beijing). I wonder whether the Governing Council realises the harm that is inflicting on the university whose independence they were appointed to safeguard. The blow to academic freedom at HKU will also have equally devastating impacts on other institutions of higher education in Hong Kong.  Written by Yash Ghai.

Thursday, October 1, 2015

AIIFL Report on IPO Liability Featured in Global Capital Asia

"HK IPO sponsors could escape the prospectus noose"
Philippe Espinasse
Global Capital Asia
29 September 2015
As Hong Kong IPOs start to make a timid comeback after a long summer lull, I unearthed an interesting working paper entitled “IPO sponsors and prospectus liability: the bridge too far?”, published in August by the Asian Institute of International Financial Law (AIIFL) of the University of Hong Kong.
     Its authors, Syren Johnstone (in the interest of full disclosure, co-author with me of the study manual for IPO sponsor examinations published by the Hong Kong Securities and Investment Institute), Antonio da Roza and Nigel Davis (who runs a course at HKU where I teach as a honorary lecturer), are all members of the university’s faculty of law.
     They argue at some length that, contrary to the conclusions reached by the Securities and Futures Commission (SFC) in August 2014, there appear to be no clear legal grounds supporting the SFC’s view that sponsors are subject to statutory civil and criminal liabilities in respect of material mis-statements made in Hong Kong IPO prospectuses.
     "Criminal liability is as serious as it gets, but the SFC's two-page conclusion falls well short of explaining to sponsors on what basis they should fear criminal penalties" said the authors, in an interview with Clawback.
     Their findings could prove to be ground-breaking, and help to topple the SFC’s position. In such a case, it would then be up to the courts to determine the responsibility of sponsors on a case by case basis, a much more palatable outcome for brokers and investment banks accused of having been involved in sponsoring work of sub-standard quality... Click here to read the full article.  Click here to download the IPO report from the AIIFL website.

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