Lawyer Issue

Aviation Industry in 

Myanmar 

European Union: Reforms to 

trade mark legislation 

The rise of Solar Power in the 

Netherlands

Contents 

Contact 

www.lawyerissue.com 

Project Finance: there’s no such thing as indisputable principles… 4 

The changing landscape of the Community Trade Mark application – EU trade 

mark reforms 9 

The Curious Attraction of Israel to Foreign Law Firms 13 

Cofely v Bingham and Anor 17 

Protecting a Brand Name or Logo in the European Community – What You 

Need to Know 22 

Aviation Industry in Myanmar 26 

Path Act Makes Changes to Captive Insurance Tax Rules 31 

Pakistan’s Competition Regime- Out of The Shadows, And in Lockstep with Best 

Global Practices 35 

European Union: Reforms to trade mark legislation 39 

Updates in the Pharmaceutical Sectors – under Chinese Competition Law 

Regime 44 

The rise of Solar Power in the Netherlands 48 

Further Changes Expected in Indian Companies Act 2013 51 

Waste-to-Energy in Vietnam 55 

Equity Driven Crowdfunding in Lebanon 59 

Common Terms in Pharmaceutical Trademarks 62 

Clinical Trial Tragedy in France – Implications for trial sponsors 

and CROs 66 

Incorporation of Chilean Companies 72

Project Finance 

Project Finance: there’s no such thing as 

indisputable principles… 

By Filipe Lowndes Marques, Francisco Cortez, 

Sofia Vaz Sampaio 

Project finance principles 

“The equity investment is ‘first in, last out’—that is, in 

principle any losses that the project suffers are 

borne first by the investors, and lenders begin 

to suffer only if the equity investment is lost“, 

Edward Farquharson, How to Engage with the 

Private Sector in Public-Private Partnerships in 

Emerging Markets, p. 53. 

“Thus the investors’ risk is the same whether the 

equity is invested early or late.”, E. R. Yescombe, 

Principles of Project Finance, p. 294. 

An experienced project finance practitioner will 

probably recognize the above statements as basic 

and indisputable principles of a project financed 

transaction. 

Indeed, it is (or it used to be) generally and 

consistently accepted among project finance 

practitioners and studiers that the first loss, in a 

project financed transaction, is always incurred 

by the sponsors of the project, for the maximum 

amount of the equity they undertake to bring to 

the project, and that the lenders’ losses will only 

commence to the extent the equity brought by 

the sponsors is lost. 

The sponsors’ liability is accordingly limited only in 

the sense that their contribution to the project is 

expressly provided for and limited to a maximum 

amount of equity. 

Sponsors and lenders are not therefore partners; 

the sponsors’ risk is always, in relative terms, 

higher than that of the lenders that fund the 

project, primarily because the sponsors’ return on 

the project is also greater than the banks’ return. 

This is in line with one of the most elementary 

market rules: the greater the risk, the greater the 

reward and vice versa. 

This is true irrespectively of whether the investors’ 

contribution is made up front, pro rata/pari passu 

or back ended because this only concerns the 

timing of the contribution, not the corresponding 

amount: it relates to the when, not to the 

how much. 

In fact, nowadays, lenders tend not to object to 

the equity being injected pro rata/pari passu or 

even at the end of the construction period or even 

later, and grant, in the latter case, an additional 

credit facility that replaces equity in the meantime, 

conditional upon the equity injection being the 

subject of a firm, legally binding commitment 

by the investors, i. e., duly secured, notably by 

providing bank guarantees or letters 

of credit. 

Postponement of the sponsors’ contributions 

does not impact on the allocation of the risk 

inherent in the project as the sponsors “credit 

exposure to the project is essentially the same 

as it would have been had it made its equity 

contribution to the project company in the usual 

way” (upfront), (John Dewar, International Project 

Finance, p. 311). 

Not quite indisputable 

A recent dispute made however clear that there’s 

no such thing as undisputable principles. 

The facts: 

• In 2008, a Portuguese company (a special 

purpose entity created for the effect, below 

“the Company”) and the Portuguese State 

entered into a concession agreement for the 

conception, construction, financing, operation 

and maintenance, with toll, of a motorway in 

Portugal. 

• In the context of the concession agreement, 

the Company, its shareholders (“the Sponsors”) 

and a syndicate of banks (“the Lenders”) 

entered into several agreements, including 

Facility Agreements – whereby the Lenders 

granted long term facilities and equity 

bridge facilities – and an equity subscription 

agreement according to which the Sponsors 

undertook to make additional capital 

contributions to a certain maximum amount. 

• The actual payment of the Sponsors’ additional 

capital contributions was partially deferred to 

the end of the construction period, but on first 

demand bank guarantees were provided as 

security for these contributions. 

• Since the long-term facilities were insufficient 

to satisfy all the funding needs of the 

project up to the end of the construction, 

postponement of the aforementioned 

Sponsors’ contributions implied additional 

short-term credit facilities, which would make it 

possible to overcome the aforementioned gap. 

• The construction works were suspended 

by a preliminary injunction requested by a 

company claiming damages arising from the 

construction. 

• Because the construction works were on hold 

and the Company could not assure that the 

completion date would occur on the estimated 

date or what impact the suspension would 

have on the feasibility of the Concession, the 

drawdowns under the Facility Agreements 

were suspended. 

• The equity bridge facilities were not used in 

full. 

• The Sponsors voluntarily made additional 

capital contributions but in an amount 

substantially lower than the maximum amount 

foreseen in the equity subscription agreement. 

• In 2012, on the date foreseen in the equity 

subscription agreement, the lenders and 

the Company requested the payment by the 

Sponsors of the remaining amount of the 

additional capital contributions up to the full 

amount foreseen in the referred agreement, 

failing which the Lenders would enforce the 

bank guarantees. 

4 | LawyerIssue 5


• The Sponsors refused to pay the outstanding 

In summary, the Sponsors’ thesis was based on 

risk, by limiting the amount of the additional 

created by the postponement of payment 

full amount, alleging that the amount of 

three main arguments: 

capital contributions to the amount disbursed 

of equity until the date the equity is injected 

the additional capital contributions was 

under the equity bridge facilities – because it 

by the sponsors. It is because the sponsors 

unquestionably linked to the sums withdrawn 

• That it resulted from the agreements and the 

isn’t made with that concern or purpose. The 

undertake from the outset to make their 

under the equity bridge facilities. 

Base Case (financial model) that the funding 

Base Case is nothing but a reference scenario 

contributions at a certain date in the future 

of the project would always have to respect a 

which cannot be used in case of disruption 

that the project company agrees a bridge loan 

• The Lenders therefore enforced the bank 

debt/equity ratio of 85/15 and a proportional 

of the construction works, suspension of the 

for the intervening period; and not the reverse, 

guarantees. 

and pari passu payment of funds, in the sense 

financing and collapse of the concession. 

i.e. the sponsors undertake to make their 

that the Sponsors could never be required to 

contributions at a certain date in the future 

• The Sponsors however filled two separate 

fund more than 15% of the total funds, even in 

The Base Case is not prepared to be applied 

because this is the date of repayment of the 

injunctions against the Company and the 

the event of collapse of the project; 

or solve abnormal situations and can only 

bridge loan. 

banks which provided for the on first demand 

be changed for the purposes of restoring 

bank guarantees – but not against the Lenders 

• That the terms of the equity subscription 

the financial balance of the Concession. It 

Both the Sponsors and the Lenders filled several 

who had to, by their own initiative, intervene 

agreement restricted the required amount 

is then irrelevant if there is in the financial 

legal opinions in support of their thesis. 

in the proceedings as a third party – to prevent 

of additional capital contributions to the sum 

model an operational connection between the 

the enforcement of the bank guarantees, 

outstanding under the equity bridge facilities; 

reimbursement of the equity bridge facilities 

In 2014, the arbitral tribunal issued its award 

alleging that their obligation to make additional 

and, finally, 

and the payment of the additional capital 

which was entirely favourable to the Banks: 

capital contributions was limited by the 

contributions. 

the arbitral tribunal endorsed the Lenders’ 

amounts withdrawn under the equity bridge 

• That the agreements contained no clause 

interpretation of the Equity Subscription 

facilities. 

providing for mandatory prepayment or 

• Once the Base Case of a project finance 

Agreement and sentenced the Sponsors to 

acceleration of the obligation to make 

transaction and the debt/equity ratio are 

pay the full amount of additional contributions 

• One of the injunctions was granted, with the 

additional capital contributions. 

agreed, the Sponsors undertake, from 

foreseen in the equity subscription agreement 

court actually analysing and interpreting the 

inception, to inject in the project company the 

and confirmed that the enforcement of the bank 

relevant clauses of the equity subscription 

On the other hand the Lenders argued that: 

equity foreseen in the Base Case, i.e. equity 

guarantees by the Lenders was entirely licit and 

agreement, despite the fact that it was deciding 

equal to the difference between what would 

compliant with the equity subscription agreement. 

on the enforcement of on first demand bank 

• The Sponsors had undertaken to make 

be, in the light of the aforementioned model, 

guarantees. The other injunction was rejected 

additional capital contributions in the 

the amount of the total funding needs of the 

The Sponsors then filed a request to set aside 

and two of the Sponsors’ bank guarantees 

maximum amount foreseen in the equity 

project and the amount of loans agreed to 

the arbitral proceedings – still pending – mainly 

were indeed enforced and paid. 

subscription agreement irrespectively of the 

meet these needs (whether they should do so 

sustaining violation of public policy’s principles, 

amount of debt service owed by the Company 

upfront, pari passu or at the end is a 

the main argument being that the arbitral 

• The Sponsors then commenced arbitral 

at any time or of the amounts disbursed under 

different issue). 

tribunal, by arguing that the obligation of payment 

proceedings against the Lenders and the 

the equity bridge facilities; 

of additional capital contributions also had a 

Company asking the arbitral tribunal to 

• If a project needs to secure funding to meet 

function of guarantee of the Lenders’ credits 

declare that the Sponsors had fulfilled their 

• The Sponsors’ risk is the same whether the 

costs possibly exceeding those contemplated 

over the Company violated the Portuguese rule 

obligations under the equity subscription 

equity is invested up front, pro rata or back 

in the Base Case, this is normally provided as 

according to which surety must be expressly 

agreement and that no amount was due under 

ended (as in case) and irrespectively of the 

contingency funding/ standby equity. 

declared because such rule applies to all personal 

the referred agreement and to declare that 

amount disbursed by the Lenders under the 

guarantees. 

the Lenders and the Company, by requesting 

equity bridge facilities, because the debt/equity 

• The additional capital contributions at stake 

the payment of the full outstanding amount of 

ratio only stands in normal conditions but 

corresponded to the equity required according 

The Lenders argued in response that (i) the 

additional capital contributions and enforcing 

does not necessarily stand when the project 

to the Base Case: they are, accordingly, base 

referred obligations are not and were not 

the bank guarantees, had breached the equity 

collapses, or of the amount disbursed under 

equity (equity that must always be injected) 

considered by the court as personal guarantees; 

subscription agreement. 

the equity bridge facilities (when they exist, as 

and not standby equity (equity that must be 

(ii) in any case, such obligations were expressly 

in case); 

injected only if certain circumstances occur). 

declared; (iii) in any case, the Portuguese rule 

The Lenders on the other hand asked the 

regarding surety does not apply to other personal 

arbitral tribunal to condemn the Sponsors 

• The Base Case (financial model) cannot be 

• A back-ended project finance transaction 

guarantees; (iv) in any case, such rule could not 

to pay the total amount of additional capital 

used as an element of interpretation of the 

includes an equity bridge component — a 

be considered as an international public order 

contributions plus interests. 

agreements – namely to limit the Sponsors’ 

facility whose purpose is to bridge the gap 

principle not only because the Portuguese rule 



has no specific correspondence to other countries 

rules regarding surety but also because in other 

countries’ courts and authors also defend that 

such surety’s rules do not apply to personal 

guarantees. 

Despite all Sponsors’ creative attempts not 

to comply with their obligations, postponing 

the payment of the full amount of the 

additional capital contributions, at the end the 

abovementioned principles were reinforced as 

basic principles of project finance transactions. 

The changing landscape of the Community 

Trade Mark application – EU trade mark reforms 

by Keeley Millar 

Filipe Lowndes Marques 

Partner at Morais Leitão, Galvão Teles, Soares da Silva e Associados 

T: +351 213 826 601 

Email: flmarques@mlgts.pt 

Filipe Lowndes Marques is a member of the banking and finance team and has extensive experience in the 

area of project finance, having worked since 1995 on several types of projects, including bridges, motorways, 

power plants, wind farms, football stadiums, LNG terminals and natural gas concessions. He has also been 

active in the field of capital markets, having advised on several securitization transactions, covered bonds 

issuances and worked on several IPOs of state owned companies. Filipe has been selected by Best Lawyers 

2016’s edition as “Leading Lawyer in Portugal” in Banking and Finance. 

Francisco Cortez 

Partner at Morais Leitão, Galvão Teles, Soares da Silva e Associados 

T: +351 213 817 455 

Email: fcortez@mlgts.pt 

Francisco Cortez coordinates one of the litigation and arbitration teams as well as the sports law team and is 

a very experienced lawyer in the litigation area, specializing in civil, corporate and commercial litigation. He 

has been responsible for several highly complex cases, both in judicial courts and arbitration. As a lawyer and 

as an arbitrator he has participated in more than three dozen arbitrations in Portugal, since 2000. Francisco 

also teaches on a post-graduate course on Arbitration. The 2014 and 2015 editions of the “Client Choice 

Awards” recognized Francisco as the best lawyer in Portugal in litigation. 

The unitary Community Trade Mark (CTM) was introduced in 1996. 

Since then there have been no major changes to the system. However, the 

IP landscape and business environment have changed dramatically leaving 

Europe’s trade mark system behind. 

Sofia Vaz Sampaio 

Senior Associate at Morais Leitão, Galvão Teles, Soares da Silva e Associados 

T: +351 210 091 738 

Email: sofiasampaio@mlgts.pt 

Sofia Vaz Sampaio is a member of the litigation and arbitration team. Sofia has acted as counsel in several 

judicial and arbitration proceedings, domestic and international, in a variety of industrial sectors, such as 

banking, construction, food and beverage, infrastructures, media and advertising, public-private partnerships, 

energy, and telecommunications. In 2011 Sofia practiced law as foreign intern at Skadden, Arps, Slate, 

To review and remedy this problem, 

the European Commission carried out a 

comprehensive evaluation of the overall 

functioning of the CTM in 2008, finding that many 

aspects of the system continue to meet business 

needs and expectations, but that the system 

needs modernising to bring it up to speed with 

the internet era and to ensure it functions more 

effectively, efficiently and consistently as a whole. 

For these reasons, the European Counsel called 

on the Commission to present proposals for the 

revision of the European trade mark system. 

The Commission has recently published draft 

legislation in relation to the proposed reforms of 

the European trade mark system. These are the 

key reforms which will overhaul existing CTM law: 

• Terminology 

The term “Community Trade Mark” will 


Intellectual Property 

be replaced with “European Union Trade 

decided that the use of general terms in 

if the applicant can show that the mark has 

fees payable directly to the Office have been 

Mark” and the OHIM is to be replaced with 

a specification should be interpreted as 

acquired a distinctive character through use 

reconsidered. The most significant change is 

“European Union Intellectual Property Office” 

including all goods and services covered 

before the application date. 

class coverage. Under the current system it 

or “Agency”. 

by the literal meaning of the term, and 

is the same price to register a CTM in three 

that specifications must meet the requisite 

Under the new system, the same has been 

classes as it is in one class. Under the new 

• Harmonisation 

standard of clarity and precision. 

adopted with regard to trade marks that 

system, a European Union trade mark will 

National laws and practices will be 

are subject to invalidation proceedings: 

only cover one class and the cost to cover 

further harmonised and brought in line 

To ensure all trade marks comply with this, 

a mark will not be declared invalid if the 

a second class and subsequent classes has 

with the EU trade mark system to create 

the Commission is giving proprietors of 

proprietor can show that the mark has 

been reduced from EUR 150 to EUR 50. 

equal conditions for the registration and 

European Union trade marks applied for 

acquired distinctiveness before the date of 

protection of trade marks throughout 

before 22 June 2012 registered in respect of 

the application for invalidity. 

The new fee structure discourages broad 

the Union. A more streamlined approach 

the entire class heading, an opportunity to 

filings and encourages smaller businesses 

will lead to faster and less burdensome 

amend their specification. 

• Counterfeit goods 

to seek protection, with the European 

procedures especially for SMEs that conduct 

One of the stated aims of the reforms 

Commission claiming that the changes 

business in multiple member states and 

Proprietors can do this by filing a 

was to improve the means to fight against 

will lead to savings of up to 37 per cent for 

seek protection and enforcement assistance 

declaration at the Office within six 

counterfeit goods within the EU. Under the 

businesses that seek protection of their EU 

in multiple EU jurisdictions. 

months of the entry into force of the 

new system, rights holders can prevent 

trade marks beyond an initial period of 

new Regulation, confirming that their 

goods from entering the EU when those 

10 years. 

• Graphic representation 

intention on the date of filing had been 

goods are likely to infringe their registered 

At present, the EU trade mark system 

to seek protection in respect of goods 

trade mark rights regardless of whether 

Many of the other fees payable directly to 

requires a sign to be represented 

or services beyond those covered by the 

the goods are released for free circulation 

the Office have been reduced. 

graphically in order to be protectable as 

literal meaning of the class heading with an 

within the EU. 

a trade mark. This requirement has made 

indication of those goods or services. Where 

• Mediation Centre 

it virtually impossible for proprietors to 

no declaration is filed, the trade mark will be 

The new provisions are aimed at preventing 

In order to “facilitate amicable, expeditions 

register non-conventional trade marks 

deemed to cover only the goods or services 

third parties from importing counterfeit 

and efficient dispute resolution” the 

such as sounds, smells and tastes, which 

covered by the literal meaning. 

goods for commercial activity from outside 

Commission has given the Office an 

cannot be represented graphically in a way 

the EU into the EU and at discouraging the 

opportunity to establish a Mediation 

that is clear, precise, self-contained, easily 

It is strongly recommend that owners 

ordering and sale of counterfeit goods over 

Centre. The Mediation Centre may be used 

accessible, intelligible, durable and objective 

of CTM marks that were filed prior to 22 

the Internet to EU consumers. 

by any person wishing to achieve friendly 

– criteria set by the European Court of 

June 2012 review the coverage of their 

settlement of disputes arising from EU 

Justice and known as the Sieckmann criteria. 

registrations and contact us immediately 

• Filing and fees 

trade marks and Community designs on a 

should they have concerns. 

The filing of CTMs at national offices will be 

voluntary basis. 

The Commission has now abolished the 

abolished: EU trade marks may only be filed 

graphic representation requirement from 

• Bad faith 

at the EU Trade Mark Office. 

Parties wishing to use the services must 

the definition of an EU trade mark. Instead, 

Previously, bad faith could only be raised as 

file a joint request to mediate along with 

“any appropriate form” is allowed as long 

a ground for invalidation, but the reforms 

Currently filing fees are payable within one 

payment of the corresponding charge at 

as it fulfils the Sieckmann criteria. This may 

have now introduced bad faith as a ground 

month after filing. This enables applicants 

the Office. Where the parties are involved in 

open the flood gates for the registration 

for opposition making it possible for a third 

to file ‘test applications’ to see whether 

proceedings before the Office, ie opposition 

of non-conventional trade marks such 

party to oppose a registered trade mark on 

their mark encounters objections during 

/ revocation / invalidation proceedings, the 

as sounds and smells, particularly as 

the grounds that the proprietor was acting 

examination and if it does, they can avoid 

request for mediation can be filed at any 

the definition of a trade mark has been 

in bad faith when they applied to register 

paying the filing fees by not responding to 

time from lodging the proceedings to filing 

expanded to include “sounds” and “colours”. 

their mark. 

the examination report. To prevent this, 

a notice of appeal and the corresponding 

filing fees will now be due immediately upon 

proceedings will be suspended. 

• Use of general terms 

• Acquired distinctiveness 

filing. 

In the landmark IP Translator decision, 

A mark that is non-distinctive, descriptive 

If the parties are able to reach a settlement 

the Court of Justice of the European Union 

or generic shall not be refused registration 

To help balance the budget of the Office the 

agreement, one of the parties wishes to 



end mediation or the mediator believes the 

parties are unable to reach a settlement, 

the mediator will inform the Office the 

mediation proceedings are closed and the 

suspended proceedings will resume or be 

concluded. 

• Surplus funds 

The Commission’s reforms also address 

the Office’s growing budget. It said that 

the accumulation of significant budgetary 

surpluses should be avoided and that 

the Office should maintain a financial 

reserve covering one year of its operational 

expenditure to ensure it can continue its 

operations as specified in the Regulation. 

Part of the reforms place an obligation on 

the Office to prepare a biannual report to 

the European Parliament, the Council and 

the Commission on its financial situation 

so that the Commission can review the 

financial situation of the Office and make 

changes to the budget as necessary. 

On 15 December 2015 the European Parliament 

adopted the EU trade mark reform package. The 

final text of the draft legislation has now been 

published in the Official Journal of the European 

Union. 

The draft legislation consists of the EU Trade 

Mark Directive, which was published on 23 

December 2015 and entered into force on 13 

January 2016 and, the EU Trade Mark Regulation, 

which was published on 24 December 2015 and 

enters into force on 23 March 2016. 

Overall the changes cater for a more modern 

and streamlined system of trade mark protection 

ensuring the system is brought into the internet 

era. While some commentators believe the 

proposed changes may not represent a major 

overhaul of the existing system, the new 

legislation includes some important changes 

that will modernise trade mark law and impact 

brand owners, in particular those regarding use 

of general terms. 

The Curious Attraction of Israel to 

Foreign Law Firms 

By Zohar Fisher 

Keeley Millar 

Associate at Marks & Clerk LLP 

T: +44 (0) 20 7420 0000 

Email: kmillar@marks-clerk.com 

Keeley graduated from Reading University with an honours degree in Law and began her professional 

training at another leading Patent and Trade Mark firm before joining Marks & Clerk in late 2013. Keeley 

completed her training with Marks & Clerk and qualified as a Registered Trade Mark Attorney (UK) and 

European Trade Mark Attorney in 2014. Keeley assists with all aspects of trade mark portfolio management 

and prosecution and works with clients in a variety of sectors. Keeley is a member of the Institute of Trade 

Mark Attorneys and regularly volunteers at the UK IPO clinic providing free trade mark advice. 

For a foreign law firm, Israel is no easy market 

to crack. 

Israel is the ‘Lawyers’ Nation’, a country which 

boasts 126 lawyers per capita, with no signs of a 

slowdown. 

Imagine: for every couple of public buses that 

goes past, there’s one lawyer. Attend a ball game? 

Probably three dozen lawyers in the stands. 

Someone hit your car when sitting in traffic? Put 

your head out the window and call for a lawyer 

– you’ll get a couple of quotes before the lights 

change. We’re being facetious; still, competition 

for a slice of the Israeli legal pie is cutthroat. 

Add to that: Israeli legal fees are extremely low by 

international standards. 

In Israel, a lawyer works the same long hours as 

their EU or US cousins, and earns a third or even 

a quarter of the fees. A legal intern might bill $75 

per hour, and at higher rungs of the ladder, $250 

per hour is considered not-too-bad of a deal for 

associates and partners. 

In some sectors of Law, dog-eat-dog competition 

has lawyers scrapping for minuscule margins. In 

real estate, some firms charge a trifling 0.5% of 

transaction values. Great for buyers, virtual suicide 

for lawyers. 


Anti-trust/Competition Doing Business in IsraelLaw 

No Accounting for Taste 

opportunities for foreign law firms. 

Cyber 

Real Estate 

You’d think heavy competition and low fees would 

chase away foreign law firms. 

Think again. 

Actually, more than 85 foreign law firms operate 

inside Israel. In 2012 new legislation opened the 

door to non-Israeli firms, allowing them to practice 

laws of their country of origin without needing to 

join the Israel Bar Association. 

Early arrivals were Greenberg Traurig from the US 

and London’s BLP (Berwin Leighton Paisner), both 

in 2012. It’s almost as if they were bursting for the 

chance to get into the Start-Up nation. 

There’s been an explosion of foreign activity; large 

firms such as Skadden Arps Slate, Freshfields 

Bruckhaus Deringer, Linklaters, White & Case, and 

DLA Piper recently entered the Israeli market. 

Mid-size firms are following suit, sometimes from 

unexpected countries: Ireland, Poland, Belgium, 

Cyprus, and Greece have turned their eyes to 

Israel. For some firms, presence is simply a desk 

occupied by a visiting partner, perhaps half a week 

in the month. For other, braver firms, a presence 

inside Israel means serious investment of money 

and human resources. 

Yingke, China’s second-largest law firm, has made 

heavy inroads into Israel. Through a merger, they 

assembled Yingke Israel in 2013, partnering with 

local Israeli firm Eyal Khayat Zolty Neiger & Co 

(who specialize in high-tech, venture capital and 

corporate legislation). 

It’s no accident a Chinese firm has become so 

prominent – here’s a clear reflection of Israeli 

government encouragement of stronger ties with 

China and Southeast Asia. 

There’s something in the water 

Famously fueled by high-tech and biotech, there’s 

more to the Israeli market than meets the eye. 

Foreign investors take active interest in local 

industries such as food, insurance, defense and, 

most recently, natural gas. 

As mentioned, in the Holy Land, fee rates tend 

to favour the client; there’s nothing too special 

about servicing average deals in these industries. 

However, from time to time a treasure chest 

drops, for example, in the form of massive 

outbound and inbound international M&A deals. 

Hot sectors of the Israeli 

Economy 

Tech 

As far as High Tech is concerned, Israel remains a 

world leader. In 2013 a total of $380 million (USD) 

was raised by Israeli start-ups, of which 25% went 

to internet companies. 

Historically, Israel has played a major role in global 

technological developments, with Intel’s Israel 

Development Centre in Haifa developing the 8088 

chip used for the IBM PC, plus the game-changing 

Pentium and Centrino chips. 

There’s big money in Israel’s App niche. The 

$1.1bn takeover of navigation technology-maker 

Waze Mobile by Google is a prime example. 

Waze Mobile’ 100 employees received a reported 

$120m. And the lawyers didn’t do too badly, 

either. Any firm taking a percentage on such a 

deal stood to earn handsomely. 

Another Israeli navigation app, Moovit, 

transformed the way people use public transport, 

providing real-time travel information about buses 

and trains. The funding round was closed in 2013, 

at $28 million (USD). Not bad returns on a few 

blips on a moving screen! 

Surrounded by hostile neighbors for 60-odd years, 

it’s no surprise that Israel makes considerable 

military and security investments. Lately, much 

has been made of Cyber security, the front line in 

the military-industrial merry-go round. 

Cyber-Security is another profitable area for Israeli 

business, where canny lawyers can take a lion’s 

share of upside. The country boasts a newlyestablished 

National Cyber Defense Authority, 

described by Prime Minister Binyamin Netanyahu 

as an ‘air force’ to protect facilities, security 

agencies and civilians against cyber attacks. 

This compliments the existing Israel National 

Cyber Bureau, created in 2011, which defends 

business and infrastructure. The Authority and 

Bureau now operate in close tandem, and wield 

real financial and political clout. 

The sector has had significant benefits for Israel, 

with a recent spike in commercial activity. In 

November 2014 Aorato – an Israeli hybrid cloud 

security startup – was purchased by Microsoft for 

an estimated $200m (USD). In September 2014 

CyberArk, Israel’s largest privately-held cyber 

company went public on NASDAQ, reflecting a 

valuation just shy of $0.5 billion (USD). 

Energy 

Elsewhere in the economy, the energy sector is 

also booming. This is largely down to discovery 

of two major natural gas reserves off the 

Mediterranean coast: Tamar (2009), the larger 

Leviathan (2010), the latter being the largest gas 

field in the Mediterranean Sea. At 622 billion cubic 

metres, Leviathan reserves are too large for Israeli 

domestic use alone. Supplying this gas abroad will 

create an entirely new revenue stream for Israel. 

Naturally there are disputes between private 

sector and government-backed, concerning how 

best to divide the cake. 

In Tel Aviv property prices are rocketing. The 

city’s prime residential property market grew 75.4 

% in the five years to the first quarter of 2014, 

according to a report by Knight Frank. Having said 

that, the International Monetary Fund warns: this 

bubble ready to burst. 

Despite the huge volume of work, legal fees 

on real estate deals have hit rock-bottom 

– sometimes less than 0.5 per cent of the 

transaction value. The Israel Bar Association 

pushed for a minimum legal fee on property 

transactions to prevent ridiculously low 

undercutting. As yet, this hasn’t budged an inch. 

Foreign Takeovers 

On the horizon is the serious prospect of lucrative 

foreign takeovers of Israeli firms. In 2015 a 

law was passed, forcing conglomerates to sell 

assets, part of a broader Israeli domestic war on 

monopolies. 

One headline-making deal was Chinese stateowned 

Bright Food buying a 56% stake in major 

Israeli food maker Tnuva in May 2015 for $960m 

(USD) from UK private equity group Apax Partners. 

Conclusion 

Business in Israeli is never a walk in the park, 

especially for lawyers. A small competitive market 

with low fees never sounds as the best business 

plan for a law firm. 

Having said that, Israel still manage to become an 

incredibly attractive piece of land, with industries 

that are in constant growth and development, 

offering a dynamic technological world that has 

much to offer to the world. 

The uniqueness of Israel lies mainly on its people’s 

spirit of enterprise; the desire to create new 

Look hard enough and you’ll find plenty of 

and profitable ventures, tenacity in driving ideas 

14 | LawyerIssue 

15

Doing Business in Israel 

through to delivery, sheer will power, and the 

relentless wish to cut inefficiencies. There’s an 

energy and optimism in this little country that’s 

hard to beat. 

Israelis drive a hard, bargain and are deeply 

skeptical. There are many cultural barriers 

to overcome, not least of which a fierce 

independence, and lack of trust in outsiders. 

Israelis exude the sense ‘we know best’, even 

when the facts scream loudly to the contrary. 

Crack past the hard ‘sabra’ shell, through to the 

warm, soft fruit, and you’ll find fertile soil in Israel 

for a patient, perhaps slightly adventurous, legal 

mind. 

About Robus: 

• As Israel’s leading legal marketing 

consultants, Robus see its outbound services 

to foreign law firms as part of the company’s 

DNA. 

• Representing a full spectrum of Israeli law 

firms, from boutique to Israel’s largest law 

firms, Robus is a valuable strategic partner 

for foreign law firms asking to obtain a 

foothold in Israel. 

• Robus consult many foreign law firms, among 

others – US law firms, European law firms 

from the UK, Germany, France and east 

Europe, all asking to provide legal services in 

Israel. 

• With a team of native English speaking jurists 

and lawyers, rich business experience and 

in-depth acquaintance with the Israeli legal 

market, Robus is the perfect starting point 

from which your law firm can set sail for new 

opportunities in Israel. 

• Founder of Robus, Adv. Zohar Fisher is a 

vastly experienced strategic and business 

advisor, and a commercial lawyer who has 

been practicing Legal Marketing for many 

years, inter alia, as the business development 

manager of one of the leading and largest 

Israeli law firms. 

Cofely v Bingham and Anor 

By Ben Beaumont Beaumont 

Zohar Fisher 

Founder at Robus 

The judgment published on 17 February 2016, Cofely Limited v Bingham and Another 

[2016] EWHC 240 (Comm), considers the situation where circumstances might exist 

to give rise to justifiable doubts as to the impartiality of an Arbitrator.The Claimant 

sought an order for the removal of Anthony Bingham, a very well known and respected 

Arbitrator, from an ongoing Arbitration. 

T: +972 3 6763533 

Email: zohar@robus.co.il 

Adv. Zohar Fisher is the founder of Robus, Israel’s leading Legal Marketing company, which 

represents Israeli and foreign law firms alike. 

Adv. Fisher is a vastly experienced strategic and business advisor, and a commercial lawyer who 

has been practicing Legal Marketing since 2006, inter alia, as the business development manager 

of one of Israel’s leading and largest law firms. 

Robus is also behind “Israel Foreign Law Firm Conference”, the only annually held conference 

devoted to foreign law firms and their practice in Israel. 

The Claimant did not allege actual bias. 

The Claimant is a construction company. The 

2 nd Defendant, JR Knowles, is a well-known and 

respected claims consultant. 

Disputes arose between the Claimant and the 

2nd Defendant from a Success Fee Agreement 

dated 26 October 2011. That agreement 

contained an Arbitration Clause. On 21 

January 2013 JR Knowles, having given Notice 

of Arbitration to the Claimant, sought the 

appointment of an Arbitrator from the Chartered 

Institute of Arbitrators. The Notice stated that 

the 2nd Defendant considered it was preferable 

that the Arbitrator had both Quantity Surveying 

and Delay Analysis experience and specifically 

identified Anthony Bingham as the likely 

Arbitrator. 

Those representing the Claimant informed the 

Chartered Institute of Arbitrators that while 


Real Estate and Construction Law 

concurring that it agreed that the Arbitrator 

therefore unable to act. Mr Justice Ramsay, in his 

Arbitrations referred to above? 

towards it, and further the Claimant considered 

should have legal experience, it did not consider 

judgment, stated that there was a “very strong 

that the Arbitrator showed impatience when 

that experience as a Quantity Surveyor or in 

case that Mr Giles (of JR Knowles) deliberately or 

What proportion of your professional income as a 

questions were asked relating to facts potentially 

Construction Delay was necessary. It proposed 

recklessly answered the question as to whether 

barrister/ adjudicator/ Arbitrator was accounted 

relevant to the apparent impartiality of the 

the appointment of a member of Keating 

there were conflicts of interest so as to exclude 

for from the referrals covered by requests 1 and 2 

Arbitrator. 

Chambers. The Chartered Institute appointed Mr 

adjudicators who he did not want to be appointed”. 

above for each of the 3 years in question? 

Bingham. 

On 30 April 2015, Anthony Bingham issued 

Subsequently, the Court considered that this was 

What proportion of your professional income as a 

an Arbitrator’s Ruling which decided that 

Thereafter, various procedural matters were 

a general practice of Mr Giles. 

barrister/ adjudicator/ Arbitrator was accounted for 

the Tribunal, his own position, was properly 

dealt with in the Arbitration and on 21 August a 

from the referrals covered by request 3 above for 

constituted and that there was no conflict of 

Partial Award in favour of JR Knowles was issued. 

The letter described earlier, 18 th of February 

each of the 3 years in question? 

interest as far as he was concerned. 

That award was not challenged. 

2015, stated that it had concerns arising out of 

that Eurocom judgment. The letter then asked 

What, if anything, have you done during this 

Further correspondence relating to the concerns 

Thereafter, various exchanges of 

6 questions seeking information concerning the 

Arbitration to satisfy yourself that there is no 

of the Claimant was exchanged between the 

correspondence between the parties and also 

nature and extent of the relationship between JR 

information that you should disclose to Cofely which 

parties. On 5 June 2015, JR Knowles asked the 

between the parties and Mr Bingham took place. 

Knowles and the Arbitrator. 

could reasonably be interpreted (on an objective 

Arbitrator to provide specific total figures as to 

On 18 February 2015, matters took a different 

basis) as undermining your apparent impartiality?” 

his income derived over the previous 3 years and 

turn. 

On 27 February 2015, JR Knowles responded 

the amount of fees he had earned as a result of 

to the Claimant’s letter answering 5 of the 

On 17 March, Stephenson Harwood sent a 

appointments from JR Knowles. 

The Claimant wrote to JR Knowles seeking 

questions. On 11 March 2015, Stephenson 

further communication to the Arbitrator seeking 

information in relation to its dealings with the 

Harwood, on behalf of the Claimant, raised 

answers to the questions asked so that the 

The Arbitrator replied on the same day that he 

Arbitrator in the light of the decision of Mr Justice 

further questions as a result of the responses 

Claimant might feel reassured about its position 

had earned £1,146,939 and £284,593.75 (from JR 

Ramsay in Eurocom Ltd v Siemens PLC [2014] 

provided by JR Knowles. 

in the Arbitration. 

Knowles). 

EWHC 3710 (TCC). 

On the same day for the first time Stephenson 

On 19 March, the Arbitrator responded that he 

On 3 July 2015, JR Knowles responded to 

In that case, Eurocom applied, by summary 

Harwood wrote to the Arbitrator seeking related 

had been appointed as an Adjudicator/Arbitrator 

Stephenson Harwood stating that JR Knowles 

judgment, to enforce a decision of the 

information and setting out a series of specific 

137 times in the last 3 years. The Arbitrator asked 

had in the application forms excluded other 

Adjudicator, Mr Anthony Bingham. The 

questions: 

Stephenson Harwood what they alleged was 

candidates on the basis of being conflicted on 

application was dismissed and the Court found, 

wrong in the light of this answer combined with 

16 occasions, when as a result Anthony Bingham 

that as it had determined that the Adjudicator 

“How many times in the last 3 years have you acted 

the answers given by JR Knowles in the letter of 

had been appointed without Mr Bingham being 

had no jurisdiction by reasonable fraudulent 

as adjudicator or Arbitrator in disputes where 

27 February. 

named specifically in the application form. 

misrepresentation allegedly made by JR 

Knowles represented, or was itself, the claimant/ 

Knowles in applying for the appointment of 

referring party? 

On 23 March, Stephenson Harwood asked the 

On 8 July, Stephenson Harwood requested the 

Mr Bingham on behalf of Eurocom, Siemens 

Arbitrator to confirm that he had received 25 

Arbitrator to recuse himself. The Arbitrator had 

had real prospects of success in defending the 

Please would you break your answer in 1 down so 

appointments from JR Knowles in the previous 

not responded to that request at the time of the 

application for enforcement of the Adjudicator’s 

as to clarify how many of the above relate to: 

3 years and further that he, the Arbitrator, 

hearing. 

determination. 

was willing to answer questions as to what 

• appointments first made in the last 3 years; 

proportion of his income had arisen from these 

The Court considered the requirements of 

The alleged misrepresentation made on 

and 

appointments. 

Section 24 (1) (a) of the Arbitration Act 1996. 

behalf of JR Knowles to the Royal Institution of 

Chartered Surveyors was made when seeking 

• appointments made more than 3 years ago in 

Further exchange of correspondence took place 

“A party to arbitral proceedings may (on notice to 

the appointment of an adjudicator and related to 

respect of matters which are ongoing or have 

between the parties. As a result, the Arbitrator 

the other parties, to the Arbitrator concerned and 

the application form. 

been decided in the last 3 years. 

determined that a hearing would take place on 

any other Arbitrator) apply to the court to remove 

17 April 2015 at the offices of JR Knowles. 

an Arbitrator on any of the following grounds - 

On the application form, the agent of JR 

How many times have you made an award or 

that circumstances exist that give rise to justifiable 

Knowles stated that numerous other named 

decision in favour of the claimant/referring party 

The Claimant alleged that at the hearing the 

doubts as to his impartiality;” 

candidates had a conflict of interest and were 

(either in whole or in part) in the adjudications and 

approach of the Arbitrator was aggressive 


Real Estate and Construction Law 

The Court reviewed the main authorities relating 

to that Section of the Act. The judgment 

further stated: 

• “The fact that an Arbitrator is regularly 

appointed or nominated by the same party/ 

legal representative may be relevant to the 

issue of apparent bias, particularly if it raises 

questions of material financial dependence – 

see A v B [2011] 2 Lloyds Rep 591 per Flaux J at 

[62]; Fileturn Ltd v Royal Garden Hotel [2010] 

TCC 1736, [2010] BLR per Edwards-Stuart J at 

[20(7)]. 

• The tribunal’s explanations as to his/her 

knowledge or appreciation of the relevant 

circumstances are also a factor which the 

fair minded observer may need to consider 

when reaching a view as to apparent bias 

– see, for example, In re Medicaments and 

Related Classes of Goods (No 2) [2001] 1 

WLR 700 and Woods Hardwick Ltd v Chiltern 

Air Conditioning Ltd [2001] BLR 23. In this 

regard Cofely relies in particular on Paice v 

Harding [2015] EWHC 661, [2015] BLR 345, 

per Coulson J at [46]-[51] in which it was held 

that the explanations given by the adjudicator 

made apparent bias more rather than less 

likely having regard in particular to the 

“aggressive” and “unapologetic” terms in which 

they were expressed which suggested that 

he had concluded that something had gone 

wrong and that “attack was the best form of 

defence”.” 

It is these judgments that appear to be 

particularly relevant to the facts in this case. 

There are concerns within the arbitral 

community that Specialist Arbitrators who are 

appointed regularly by certain parties and whose 

conduct may be impeccable may however be at 

risk as a result of the trend of these judgments. 

However, this comment is not necessarily 

applicable to the facts in this particular case. 

The judgment noted that Anthony Bingham did 

not answer the following question, which was 

set out in the form supplied by the Charted 

Institute of Arbitrators on his acceptance of the 

nomination: 

“If you are aware of any involvement, however 

remote, but in particular any involvement you or 

your firm has (or has had in the last 5 years) with 

either party to the dispute, please disclose.” 

The Court concluded that evidence of unilateral 

communications with JR Knowles and a review 

of the general conduct of the referral did not 

provide any basis for concluding that there was 

a real possibility of bias, whether considered 

individually or together with the other grounds 

relied upon. 

The Court found that various matters set out 

in the applications by the Claimant raised 

concerns of apparent bias. These concerns 

included: 

• the relationship between the Arbitrator and 

JR Knowles; 

• the evidence that while JR Knowles did not 

appoint an Arbitrator/ Adjudicator directly, 

it was able to influence and did influence 

such appointments both positively and 

negatively; 

• the existence of the appointment blacklist 

by JR Knowles was also a matter of 

significance; this blacklist was important 

for any Adjudicator/ Arbitrator whose 

appointments and income were materially 

dependent upon JR Knowles; 

• while noting that only 3 of the 25 cases 

(where Anthony Bingham was appointed) 

involved JR Knowles as a party, those facts 

in themselves would be sufficient to trigger 

disclosure in the general circumstances 

of the nomination forms and under the 

Orange list guidance; 

• the aggressive response by the Arbitrator 

to the questions raised by Stephenson 

Harwood heightened concerns as the 

relationship; 

• the fact that neither party sought a ruling 

as to apparent bias could be seen when 

the ruling was issued to be evidence of 

pressure being placed upon the parties by 

the Arbitrator to pre-empt any request that 

he recuse himself; 

• that evidence that the Arbitrator descended 

into the arena was exhibited by the tone of 

the cross-examination of the representative 

of the Claimant by Mr Bingham during the 

hearing as to impartiality; 

Ben Beaumont Beaumont 

Barrister at Thomas More Chambers 

T: +44 (0) 207 404 7000 

Email: bbeaumont@thomasmore.co.uk 

The Court therefore found that there was 

sufficient force in the grounds raised by the 

Claimant to raise a real possibility of apparent 

bias on the part of the Arbitrator. 

The Court found that there was nothing 

untoward about the Partial Award or the conduct 

of the Arbitration up until March 2015. 

The Court ordered that the grounds for the 

removal of the Arbitrator were made out. 

As stated earlier, this case raises many 

concerns for Arbitrators both domestically and 

internationally who are appointed regularly 

by parties. Possibly the key points for such 

Arbitrators to note is the need for regular and 

continuous disclosure and immediate response 

to questions relating to relationships. Openness 

to the parties in relation to any matter which 

might make one or both of the parties feel 

uncomfortable is vital. 

Ben Beaumont: Thomas More Chambers Barrister 1978. Chartered Arbitrator; FCIArb, CIARB 

PANEL of Arbitrators; Adjudicators; Trained Mediator – CEDR, Former Non executive Director RIBA 

Enterprises; Appointed as arbitrator on more than 200 instances and mediators more than 29 

times; adjudicator 28 times. 

FRICS Fellow Dispute Board Federation (Geneva), www.tecbar.org Arbitrator, Adjudicator and 

Dispute Board Panelist of TECBAR, FIDIC listed Adjudicator, Chairman of Arbitration Club, Panel 

Member WIPO, Accredited Dispute Board Trainer – The Dispute Board Federation (Geneva), 

Immediate Past Chair of the Adjudication Society. 

Founding Chairman of FICACIC www.ficacic.com an international alternative dispute resolution 

body, an Observer at UNCITRAL since 2002. Trustee of the Chartered Institute of Arbitrators 1982 

-1998. He was an original Member of Arthur Marriott Working Group leading to the creation of 

Arbitration Act 1996. 



PROTECTING A BRAND NAME OR LOGO in the 

European Community – What You Need to Know 

By Robin Webster 

If you run a business and have a brand, then the chances are you will want to protect 

your brand in order to stop others from copying it and potentially stealing your 

customers. Your brand could be a word, a logo or perhaps a combination of the two. 

Whatever it is, the best form of protection is through trade mark registration. 

The trade mark registration process is 

jurisdictional. That is to say, you should register 

your trade mark on a territorial basis relevant 

to where your products or services are being 

marketed. 

Until 1st April 1996, if you wanted to protect 

your brand across the European Community the 

only way to do this was to register your mark 

in each Member State on a country-by-country 

basis. Whilst this was technically possible, it 

was a very expensive and time-consuming way 

of achieving pan-EU protection since separate 

applications had to be made directly through 

each of the national Member State government 

offices responsible for registering intellectual 

property rights in their own country. 

Why a European Community 

system? 

A system for registering a trade mark across the 

entire European Community by virtue of a single 

application was first implemented under Council 

Regulation (EC) No 40/94 of 20 December 1993. 

Under this system, a registration enables an 

owner to protect their trade mark across all the 

Member States at once and with the same legal 

effect as they would have with separate national 

trade mark rights in each Member State. 

Accordingly, a brand owner can enforce its 

rights against other parties infringing a trade 

mark in any of the Member States throughout 

the European Community. The Community 

registration system is intended to co-exist with 

the national registration systems and offer a 

cheaper and more efficient alternative, but not 

to replace them. 

The first European Community trade mark 

applications were filed on 1st April 1996. The 

office responsible for the processing and 

management of the system (the “Office for 

the Harmonization on the Internal Market” or 

“OHIM” for short) is based in the city of Alicante 

in Spain. 

How has it changed? 

Ever since the inaugural trade mark applications 

were filed in 1996 the European Community 

trade mark system has had to evolve and 

adapt according to a number of factors and 

challenges, not least because of the sometimes 

disparate nature of interpretation of its 

“harmonised” European laws by the national 

Member State government offices and courts 

over the years, as well as the changes that have 

taken place in Europe geographically and an 

expanded European Community membership. 

Moreover, the way in which most people work 

has changed considerably over the last 20 

years following the advent of the internet and 

vast amounts of information that have become 

freely and easily accessible online. 

What has been done? 

In order to maintain pace with these changes 

Council Regulation (EC) No 40/94 has been 

amended several times. The most recent 

Regulation on Community trade marks (No 

207/2009) dates back to 2009. 

In 2008 however, it was decided that a 

radical overhaul was needed. The European 

Commission commenced a programme of 

examining the European Community and 

national Member State trade mark systems and 

how they interacted with each other. Following 

the European Commission’s report it took a 

further seven years for the Commission, the 

European Parliament and the European Council 

to confirm that they had reached agreement 

for implementing the most extensive changes 

to European Community trade mark law since 

2009. On 8 th June 2015 the European Council 

published its proposals which were aimed at 

addressing the generally-acknowledged flaws 

in the current system such as higher than 

desirable costs, slow trade mark prosecution 

progress, a less than ideal level of legal certainty 

concerning the effects of registered trade 

mark rights and, in general, a low level of 

predictability for applicants and practitioners 

alike. 

The result of this programme led to the 

implementation of Regulation (EU) 2015/2424 of 

the European Parliament and of the Council of 

16 December 2015. This new Regulation, which 

comes into force on 23rd March 2016, brings 

about several key changes in the European 

Community trade mark system. 

What are the key changes? 

1. Terminology: The word “Community” is 

banished from the trade mark terminology. 

A Community trade mark becomes known 

as a “European Union trade mark” and the 

word “Community” becomes the “Union” 

or “European Union”. The OHIM will now 

be called the “European Union Intellectual 

Property Office” or otherwise the “EUIPO”. 

2. Costs: One of the key changes promised was 

a reduction in the costs required to register a 

trade mark application in the EU and to renew 

the resulting registration. In reality, the costs 

are not changing substantively at all. Official 

application fees will be marginally cheaper 

if a trade mark application is to cover only 

one class of goods or services. Bigger savings 

can be made on renewal costs, however. An 

EU trade mark registration must be renewed 

every ten years to keep it in force and official 

fees must be paid in respect of this. These 

official fees have been reduced appreciably. 

3. Goods in transit: This is a significant change 

in the law which gives increased protection 

for brand owners against counterfeiters who 



transport goods from one part of the world 

to another via the EU. Under the current law, 

products bearing a mark identical to or similar 

to an unauthorised trade mark are only 

deemed to infringe an EU registration if those 

products are in any way offered for sale in the 

EU market. 

In other words, products that are simply being 

transported through Europe and nothing 

more would not be held to be “infringing” 

goods.Under the new law, this loophole will 

be closed. In the case of any product entering 

the EU (even if only for the purpose of being 

shipped elsewhere) and where that product 

bears another party’s registered trade mark 

(or a mark that cannot be distinguished in its 

essential aspects from that trade mark) then it 

will be deemed to be an infringing product. 

This will put an end to unauthorised products 

being stored temporarily or warehoused 

in the EU as well as those contained within 

trans-shipments. An importer’s only defence is 

if they can show that the rightful brand owner 

has neither a registered EU trade mark nor a 

registration in the territory of the product’s 

ultimate destination. The importance of 

having your key brands registered as EU trade 

marks therefore speaks for itself. 

4. “Preparations” to infringe: More bad news 

for counterfeiters is the change in the law 

which now means products being prepared 

for sale may also be subject to a trade mark 

infringement claim. This applies when an 

unauthorised trade mark is placed on product 

packaging, labelling, tags etc. in readiness for 

actual sale. Until now, the products had to be 

on actual sale in the market before a trade 

mark right owner could take appropriate 

action, or at least advertised as available for 

purchase. 

5. Classification of goods: A trade mark 

registration is protected for products 

and services by means of a classification 

system. In order to set out what is covered 

by a registration, products and services are 

assigned classification numbers which relate 

to general headings. For example, “watches” 

fall under Class 14 and this class is headed 

and defined as “Precious metals and their 

alloys and goods in precious metals or coated 

therewith, not included in other classes; 

jewellery, precious stones; horological and 

chronometric instruments”. 

Following the decision of the Court of 

Justice of the European Union (CJEU) in 

Case C-307/10 Chartered Institute of Patent 

Attorneys v Registrar of Trade Marks (“IP 

TRANSLATOR”) it was held that where a trade 

mark is registered simply for the wording 

of the class heading or a specification of 

goods or services that incorporates the class 

heading, the protection of the mark is inferred 

as being limited only to the literal meaning 

of the class heading and not all the goods or 

services that fall within that class. 

In other words, the class heading is to be 

viewed as a broadly descriptive reference to 

the goods or services covered by that class 

and does not necessarily include all the goods 

or services of that class within its definition. 

The effect of the IP TRANSLATOR case is that if 

your registration has a filing date before 22nd 

June 2012 and covers a specification of goods 

or services that is entirely, or incorporates, 

the class heading, then there will be a sixmonth 

window of opportunity to address 

this by filing a declaration which sets out 

and itemises the precise goods or services 

which are meant to be covered under the 

registration. 

Without doing this, the class heading 

description could be construed to have a 

narrower meaning and the registered trade 

mark scope could be less than originally 

intended. It is therefore essential for all brand 

owners to review their European trade mark 

protection to determine whether they need to This article gives a brief overview of the 

address this. The window of opportunity falls Community trade mark system (soon to be the 

between 23 rd March 2016 – 24 th September European Union trade mark system) and the 

2016. 

changes that are coming into force. Whether the 

system will be cheaper, increase legal certainty 

6. Removal of “graphical representation” and be more efficient and predictable then we 

requirement: Until now, a prerequisite for must wait and see. It has taken seven years to 

registration has been that a trade mark must get to this position and many will argue that the 

be capable of being represented graphically. changes do not go far enough, while others can 

This has hitherto made it impossible to register make a reasonable claim that by the time these 

other signs such as distinctive smells, which has changes come into force we will have already 

long been a problem for the fragrance industry moved on and the current provisions have 

in preventing copycat “smell-a-like” perfumes quickly become out of date. 

and aftershaves frequently seen on market 

stalls. Such products do not pretend to be the Regardless of this, the Community trade 

actual brands but merely cheaper alternatives, mark system has benefited enormously many 

often comparing themselves openly to the big thousands of businesses across the EU over the 

brands by making direct reference to them. last twenty years and it has been a resounding 

success. If you consider that the system is an 

The change is that the graphical representation attempt to harmonise the laws of the (currently) 

requirement will no longer apply, meaning it twenty-eight Member States covering a multitude 

will technically be possible to register a smell as of different languages, then it is something of a 

a property right. From a practical point of view triumph that we have a Community trade mark 

that may still be difficult. It remains to be seen system at all. 

how such registrations can be achieved once 

this change is introduced in October 2017. 

Robin Webster 

Associate at Stevens Hewlett Perkins 

T: +44 (0)117 922 6007 

Email: rwebster@shandp.com 

Robin Webster is an associate of Stevens Hewlett Perkins, having joined the firm’s trade marks 

department in their Bristol office in 2003. Robin practices exclusively in the trade marks field and 

is very experienced in managing client trade mark portfolios and dealing with all aspects of UK and 

overseas contentious and non-contentious trade mark matters. He is advisor to a range of blue chip 

clients in a variety of commercial areas and has particular expertise in the fields of clothing and 

sportswear, homeopathic remedies and entertainment services. 


Aviation 

Aviation Industry in Myanmar 

By William D. Greenlee, Jr. 

While the initial rush of foreign investment into Myanmar tapered off in 

2015, likely due to the November elections, 2016 is predicted to be a year of 

rapid growth. The almost complete transition of power to Aung San Suu Kyi’s 

National League for Democracy (the “NLD”), formerly the opposition party, 

represents an impressive step towards increased stability and further opening 

up to the international community. As a result, along with numerous other 

industries, the aviation industry in Myanmar is taking off. 

Politics 

On 15 March 2016, the NLD announced their 

Presidential candidate, U Htin Kyaw, a long 

time trusted associate of Aung San Suu Kyi. 

Steeped in controversy, Article 59 (f) of the 

2008 Constitution bars Aung San Suu Kyi 

from serving as President as her sons do not 

hold Myanmar passports. 

On 17 March 2016, the Union Parliament 

voted in favor of U Htin Kyaw as Myanmar’s 

next President (albeit a proxy to Aung San 

Suu Kyi). He is set to become Myanmar’s first 

truly democratically elected President (and 

from a civilian background) in more than five 

decades. At the direction of Aung San Suu 

Kyi, the new government will take power with 

the formation of U Htin Kyaw’s Cabinet. 

On 23 March 2016, the NLD announced that 

Aung San Suu Kyi will be the minister of 

multiple ministries, thus helping her maintain 

direct control over the new government. 

Also on 17 March 2016, the Union Parliament 

approved U Myint Swe as Vice President. 

The Constitution allows the military to select 

the Vice President, an important position 

in the Myanmar government system. U 

Myint Swe is associated with the more 

conservative elements in the military and 

some may argue that he isn’t the best choice 

of candidate given his association with the 

military crackdown on monks protesting for 

democracy back in 2007. 

It is too early to tell how well the new 

government and military will work together. 

An early test will be the new government’s 

plans to reduce the number of ministries 

from 36 to 21. 

Many would agree that it is logical to reduce 

their number and that reorganization would 

make the executive more efficient, however 

it could also be suggested that it appears to 

further consolidate the new government’s 

authority. 

And while it appears that the Ministry 

of Transport (“MoT”) and the Ministry of 

Communications and Information Technology 

will be combined into a new Ministry of 

Transportation and Communications, it is 

yet to be seen how and if such a merger will 

affect the Department of Civil Aviation in 

Myanmar (“DCA”), which is now under the 

MoT. 

The Laws 

In general, the legal environment is in the 

early stages of reform and modernization, the 

former government under the military civilian 

government party had made significant 

progress in drafting laws encouraging foreign 

investment. Further laws promoting foreign 

investment are also expected to be approved 

by the new government. These include laws 

relating to investments in the Myanmar 

aviation industry, such as the upcoming 

Airport Authority Law, the Rules Relating to 

International Interest in Mobile Equipment, 

and the Rules to the Law Relating to 

International Interests in Aircraft Equipment 

of 2014. 

New laws in Myanmar co-exist with old British 

colonial laws, which have not been repealed 

and provide much of the fundamental legal 

framework still in place today, and which exist 

along with the laws and regulations issued 

by the various military governments over the 

last fifty years. 

This mixture of a common law heritage 

with laws more akin to an abridged civil law 

approach has been further complicated 

by the liberal application over the last few 

decades of “policies and practices”, which are 

not actually detailed in any law or regulation 

and are often unpublished. 

The result is a legal landscape that requires 

patience and, most importantly, a deep 

understanding of the old laws and practices, 

and finally the recent laws aimed to promote 

foreign investment. With careful legal and 

tax structuring and an appetite for risk, early 

mover foreign investors proceed with a “high 

risk/high reward” expectation. 

The Myanmar Aircraft Act of 1934 (“Aircraft Act 

1934”), Aircraft Rules of 1920, 1937 and 1946, 

and the Carriage by Air Act of 1934 regulate 

most aspects of the aviation industry in 


Anti-trust/Competition Aviation 

Law 

Myanmar. Still, lots of gaps in the laws remain 

including the aviation industry. Under the 

which is also managed by Asia World, will be 

Myanmar Airways International (“MAI”) uses 

and most deals are accomplished with an 

FIL, domestic and international air transport 

rebranded as Terminal 2. 

Airbus 320 aircraft and is likely to add new 

element of direct negotiation with the DCA. 

services can be conducted via a joint venture 

planes later this year to its existing fleet 

operation with a Myanmar private entity or 

In November 2014, MC Jalux Airport Service 

of seven. It is considering new routes to 

The Aircraft Act 1934 provides the legal 

government agency. 

Co., Ltd, a Japanese company, also signed 

Bangkok and Penang, Malaysia. FMI Air is 

framework regarding the manufacture, 

a concession agreement with the DCA to 

also evaluating the addition of three new 

possession, use, operation, sale, import and 

There must be a corporate presence in 

upgrade the Mandalay International Airport in 

domestic destinations and is expected to 

export of aircraft and applies to citizens of 

Myanmar and it requires a permit from the 

the northern logistic hub at a cost of US$100 

have a fleet of five aircraft by 2017. 

Myanmar and any person who is listed as an 

MIC. The investors can operate transport 

million. 

owner of an aircraft registered in Myanmar. 

services with owned or leased aircraft, which 

Weekly international flights from Yangon 

The Aircraft Rules cover aerodromes, aircraft 

may be registered in Myanmar. 

In 2015, a consortium comprising of Changi 

between 2010 and 2015 increased 3.88 

and public health-related matters, and 

contain practical details relating to aviation 

operations in Myanmar. 

The Market 

Airport International, JGC Corporation 

and Yangon Holdings Limited won the 

bid to develop a new Yangon airport, the 

times. There are 28 international airlines now 

flying into Yangon and several more have 

confirmed new routes, including Emirates 

The opportunities for all types of carriers 

Hanthawaddy International Airport with 

Airlines, which will use Boeing 777-300ER 

The Air Carriage Act represents the domestic 

in the market are vast as it is currently the 

construction set to begin in 2016, for 

aircraft for daily flights to Dubai from August 

implementation of the 1929 Convention for 

most underserved region in ASEAN and 

completion in 2020. 

2016, and Hong Kong Express which will 

the Unification of Certain Rules Relating to 

perhaps all of Asia. Yangon, the financial 

launch flights later this year. 

International Carriage by Air. In addition, 

hub of Myanmar, was a major trading center 

The first phase is estimated to cost US$1.5 

notifications, orders, directives and circulars 

for Southeast Asia in the 1950s; however 

billion and will include a terminal complex 

As of March 2016, Japan’s ANA Holdings 

issued by the DCA regarding various aspects 

civil aviation entered a long decline after the 

that can handle 12 million passengers per 

and the Shwe Thanlwin-owned Golden Sky 

of the aviation industry must be followed by 

military seized power in 1962. 

year. Under the second phase, the capacity 

World have formed a joint venture and 

investors carrying out business in Myanmar. 

will increase to 30 million. 

have applied to set up a new international 

In more recent years, the aviation authorities 

airline based in Myanmar. The application is 

On 3 December 2012, Myanmar acceded to 

have recognized the need to rapidly 

It has been reported that the project is 

currently awaiting approval from the MIC. The 

the Cape Town Convention on International 

redevelop the sector. They aim to make 

strongly supported by the military however 

proposed airline is “tentatively” named Asian 

Interests in Mobile Equipment and the 

Myanmar a major aviation hub in Asia and 

potentially not supported universally within 

Blue and will only service international routes. 

Protocol to the Convention on International 

Interest in Mobile Equipment on Matters 

Specific to Aircraft Equipment (together, the 

have developed a four point strategy to 

do so: liberalizing economic regulations, 

establish new air links to international 

the government as a whole. Regardless, it 

is currently widely anticipated to become 

the main port for international arrivals and 

Aircraft Leasing 

“Treaty”). On 1 August 2014, in order to give 

destinations, promoting national airlines and 

departures for the country. 

There are no specific regulatory requirements 

effect to the provisions of the Treaty, the 

Law Relating to International Interests in 

Aircraft Equipment (“Aircraft Act 2014”) was 

enacted. However, the detailed implementing 

improving infrastructure. 

The Infrastructure 

The Airlines 

There are a number of national carriers in 

with respect to the leasing of aircraft. The 

most relevant law is the Myanmar Contract 

Act 1872. The relevant lease and related 

agreements can be governed by foreign law. 

regulations have not yet been promulgated. 

The key pillars for foreign investment in 

Myanmar are the Foreign Investment Law 

As part of this strategy, the aviation 

authorities have announced the privatization 

of airports and the upgrade of major 

international airports in the country. 

Myanmar and many are placing volume 

orders for new aircraft, paving the way for 

new routes. Myanmar National Airlines 

(“MNA”), for instance, is leasing ten new 

The relevant lease must be registered in 

Myanmar and stamp duty fees must be paid, 

which are subject to the value amount of 

the lease. 

passed on 2 November 2012 (“FIL”) and 

Notification 49 of August 2014 issued by the 

Myanmar Investment Commission (“MIC”), 

the body also overseeing the FIL. 

The FIL and the notification implement a 

In 2014, a US$150 million upgrade to Yangon 

International Airport was awarded to Pioneer 

Aerodrome Co., Ltd, a consortium led by an 

affiliate of Asia World Co., Ltd. The first phase 

opened on 12 March 2016. 

Boeing 737-800 planes – so far three have 

been delivered – and has ordered six ATR 

72-600 passengers airplanes to be delivered 

by 2017. MNA flies to Singapore, Hong Kong 

and Bangkok, and will use its new aircraft for 

routes to Shanghai and Chengdu to start later 

Under the Cape Town Convention and the 

Aircraft Act 2014, an international security 

interest created and registered in accordance 

with the Treaty will be recognized and 

enforceable in Myanmar. 

substantial policy shift that encourages and 

opens more sectors to foreign investment, 

Yangon’s existing international terminal, 

in 2016. 

Under the Aircraft Act 2014, the Supervisory 


29

Aviation 

Authority to implement the provisions of the 

law shall be formed jointly by the government 

and the DCA to conduct the registration as 

provided for in the Treaty. The provisions of 

the Aircraft Act 2014 shall prevail over any 

existing law which is not consistent with the 

provisions therein. 

Although Myanmar had no practical 

experience regarding the enforcement of 

international interests in aircraft equipment, 

implementation of the Treaty and enacting 

the domestic legislation are positive steps 

in creating a strong framework for aircraft 

leasing and financing. 

Path Act Makes Changes to Captive 

Insurance Tax Rules 

By David B. Liptz 

According to the Aircraft Act 2014, if there is 

an insolvency-related event with respect to an 

airline, the relevant insolvency administrator 

or the debtor must give possession of any 

aircraft to the creditor no later than 30 

calendar days from the date in which the 

creditor would be entitled to possession of 

the aircraft. 

The DCA is required to promptly co-operate 

with and assist a creditor exercising its rights 

under an Irrevocable De-Registration and 

Export Request Authorization (“IDERA”) and 

the DCA must provide the details for the 

IDERA and the form of a Certified Designee 

Confirmation Letter. 

Thus, the aviation industry in Myanmar is 

ready for lift off. These changes in policy, 

law and rapid infrastructure development, 

coupled with the industry’s eagerness to 

expand, is leading to a new golden age for the 

aviation industry in Myanmar. 

All that is left is to see if the new government 

and the military are able to work together 

effectively as a team. Most indications at this 

stage are for a bright future. 

William D. Greenlee, Jr. 

Partner; Managing Director, Myanmar at DFDL 

T: +95 1 540 995 

Email: william.greenlee@dfdl.com 

William’s practice focuses on M&A, corporate and project finance and securities. He is involved 

in negotiating, structuring, documenting and managing large transactions, private equity and 

opportunity-fund companies and other international companies throughout Asia. With a focus 

on Southeast Asia, William’s clients include a range of industries including energy, mining, 

infrastructure, oil and gas, banking, telecommunications and tourism. William holds a B.A. degree 

from the University of Oregon in Asian Studies with a minor in East Asian Literature and Juris Doctor 

from the University of San Francisco, California. He is a member of the State Bar of California, 

State Bar of Nevada, State Bar of California International Law Section and the Inter-Pacific Bar 

Association. He is based in our Yangon office and is head of DFDL’s China Desk. He speaks English, 

Mandarin, Thai and Bahasa Indonesian. 

Captive Insurance is a formalized corporate structure, whereby a business self-insures a 

portion of identified business risks, rather than purchasing coverage from the retail insurance 

marketplace. Insurance can be a very profitable business. However, as with any business or 

adjunct to an existing business, the insurance field contains many pitfalls. If the business of 

insurance is not undertaken in a carefully planned, managed, and professional manner, the 

result can have severe ramifications for the parent company. 

Nearly every Fortune 1,000 US company 

owns a captive insurance company. 

Presently, the captive insurance industry 

is experiencing its greatest growth 

within “middle market” companies. These 

businesses are evaluating and deciding to 

form their own captive insurance company. 

The US Congress recently passed the PATH 

tax act. The act includes changes to IRC 

831(b), and these changes shall take effect 

on January 1, 2017. The Internal Revenue 

Code currently defines a small insurance 

company as: 

• A nonlife insurance company with 

net written premiums, or direct 

written premiums, not in excess of 

$1,200,000 in the tax year to be taxed, 

at regular corporate rates, only on 


Captive Insurance 

taxable investment income, instead 

of being taxed on both investment 

to be taxed only on investment income 

pursuant to IRC 831(b) may not deduct 

The diversification 

requirement will be met if: 

or businesses, rights, or assets with 

respect to which the net written 

and underwriting income. For tax 

years beginning after Dec. 31, 2016, 

underwriting losses. For this reason, 

companies that qualify for the alternative 

• An insurance company does not have 

premiums (or direct written premiums) 

of the insurance company are paid. 

the $1,200,000 maximum amount of 

annual premiums will be increased to 

tax may prefer to forego the election and be 

taxed on both investment and underwriting 

more than 20% of the net premiums (or, 

if greater, direct premiums written) of 

• (C) An indirect interest is any interest 

$2,200,000. The $2,200,000 maximum 

income (and loss). 

the company for the taxable year, which 

held through a trust, estate, partnership, 

amount of annual premiums will 

is attributable to any one policyholder. 

or corporation. 

be adjusted for inflation. A specific 

election form must be attached to 

For the second year in a row, micro-captive 

insurance companies were listed on the 

In determining the attribution of premiums 

• (D) Except as otherwise provided by IRS 

the US corporate tax return in the 

“IRS Dirty Dozen” list of tax transactions to 

to any policyholder, all policyholders who 

in regulations or other guidance, 2% or 

year the election is to take effect. The 

be “cognizant of”. Additionally, the IRS’s alert 

are related (within the meaning of Code Sec. 

less is treated as de minimis. 

election can only be revoked with IRS 

permission. 

For those insurance companies that are 

clearly states that the formation and use 

of a micro-captive insurance company is a 

“legitimate tax structure.” 

267(b) and Code Sec. 707(b) , or who are 

members of the same controlled group, will 

be treated as one policyholder. 

Illustration: In 2017, 

• A captive insurance company (“Captive”) 

organized and domiciled outside of the 

Each and every captive insurance company, 

Under an alternative approach, the 

will not meet the requirement that no 

United States that wish to make an election 

regardless of size, has very specific facts 

diversification requirement will be met if: 

more than 20% of its net (or direct) 

pursuant to IRC 831b, they must first file an 

election pursuant to IRC 953(d), and obtain 

and circumstances that pertain to their 

insurance business activities. Accordingly, 

• No person who holds an interest in 

written premiums are attributable to 

any one policyholder. 

IRS approval to be taxed as a US entity. 

Special compliance and filing rules must be 

a complete feasibility study and analysis 

is absolutely necessary before entering 

the insurance company is a “specified 

holder” (see below) who holds (directly 

• Captive will have one policyholder, 

followed in order to obtain IRS approval of 

into this endeavour. To do so without one 

or indirectly) aggregate interests in the 

“Business,” certain of whose property 

the IRC 953(d) election. 

is inviting calamity to have a seat at your 

insurance company that is more than 

and liability risks Captive covers (the 

executive board. 

a “de minimis” (see below) percentage 

specified assets), and Business will pay 

An example of a pitfall to consider is 

higher than the percentage of interests 

the captive $2 million in premiums in 

that that the Internal Revenue Code or 

Another prime example of a common 

in the “specified assets” (see below) with 

2017. 

Regulations do not contain a definition 

of Property & Casualty in “Direct Written 

pitfall one must be aware of is that when 

electing IRC 831(b), the premiums written 

respect to the insurance company held 

(directly or indirectly) by the specified 

• Business will be owned 70% by a father 

Premiums” or “Net Written Premiums”. 

by all members of a controlled group are 

holder. 

(“Father”) and 30% by his son (“Son”). 

“Presumably”, that definition is: 

• The gross amount of premiums received 

by a non-life insurance company 

for directly issued (not reinsurance) 

aggregated to determine the amount of 

premiums written by any member of the 

group. A 50% ownership test is used to 

determine if a controlled group exists. 

For purposes of these rules: 

• (A) A “specified holder” is, with respect to 

any insurance company, any individual 

Captive will be owned 100% by Son 

(whether directly, or through a trust, 

estate, partnership, or corporation). 

• Son is Father’s lineal descendant. 

insurance policies and net assumed and 

ceded out reinsurance. 

In addition to the positive enhancement 

of the IRC 831(b), which increases the 

who holds (directly or indirectly) an 

interest in the insurance company and 

• Son, a specified holder, will have a 

premium limit to $2,200,000 as of 1/1/2017, 

who is a spouse or lineal descendant 

non-de minimis percentage greater 

These are but two insurance terms or 

very specific diversification rules and 

(including by adoption) of an individual 

interest in Captive (100%) than in the 

phrases that are not defined by the IRC or 

requirements also go into effect. 

who holds an interest (directly or 

specified assets with respect to Captive 

regulations; one must “infer” the definitions 

indirectly) in the specified assets with 

(30%). Therefore, Captive will be not 

by analysing numerous court case decisions, 

For tax years beginning after December 

respect to the insurance company. 

eligible to elect to make the election. If, 

IRS revenue rulings and Private Letter 

Rulings. 

31 2016, a diversification requirement will 

apply if a nonlife insurance company makes 

• (B) “Specified assets” are, with respect 

by contrast, all the facts were the same, 

except that Son will own 30% and Father 

the IRC 831(b) election. 

to any insurance company, the trades 

will own 70% of Captive, Son would 

Of particular note: A company that elects 


Captive Insurance 

not have a non-de minimis percentage 

greater interest in Captive (30%) than 

in the specified assets with respect to 

Captive (30%). Therefore, Captive would 

meet the diversification requirement 

for eligibility to make the election. The 

same result would occur if Son will own 

less than 30% of the Captive (and Father 

more than 70%), and the other facts 

remained unchanged. 

Every insurance company that will have 

an election in effect under IRC Sec 831(b) 

for any taxable year after 2016 will also 

have to furnish to the IRS, at the time and 

in the manner as the IRS prescribes, the 

information that the IRS will require with 

respect to the diversification requirements. 

As a CPA with a depth and breadth of 

experience and knowledge in the matter, 

it is my considered opinion that a captive 

insurance company can be a powerful 

tool in the risk management and business 

strategy of a business. It is, and always 

has been, the intent of The United States 

Congress and The United States Treasury 

that the primary purpose and intent of a 

captive insurance company is to assist in 

the risk management of a business, but 

it is filled with many complex accounting, 

regulatory, tax, and business issues that 

require one to retain knowledgeable and 

experienced professionals to keep the 

company away from “land mines” and 

“pitfalls”. 

Please feel free to contact me for 

clarification, direction, or dialogue on the 

subject of Captive Insurance for business or 

any other strategic compliance and planning 

questions and needs. 

Pakistan’s Competition Regime - Out of The Shadows, 

And in Lockstep with Best Global Practices 

By Hanya Haroon 

David B. Liptz 

Partner at HKG, CPAs 

T: +1 949 474 8500 

Email: dliptz@hkgcpa.com 

Anti-Trust Laws, more commonly referred to as Competition laws or Anti-Monopoly Laws, are 

imperative for an economy to promote a competitive business environment that safeguards investors’ 

confidence and creates conditions which are conducive to innovation and growth. Although the effects 

of anti-competitive practices are not easily quantifiable and therefore may not be obvious, the most 

common results of such practices are price increases in markets involving output-restricting or pricefixing 

cartels and dominant firms abusing their market power. In such cases, consumers are the ones 

who suffer directly from restricted competition. 

With more than 25 years of experience, David is considered an expert in the specialty niche of 

captive insurance. David and his associates provide captive insurance audit, tax, representation 

and consulting services for over 200 captive insurance companies. In addition he provides services 

to the areas of manufacturing, distribution, nursing homes, real estate, internet and international 

tax compliance. David founded Liptz & Associates 15 years ago and built the firm into a position 

to merge with HKG in January 2013. David prides himself on providing pro-active “wealth 

preservation” strategies for his clients. Additionally, he provides tax consulting and representation 

to businesses in IRS audit disputes. He frequently speaks at captive insurance educational 

seminars and other industry events. 

Nevertheless, there is rising awareness among 

developing countries of the adverse effects of 

anti-competitive practices on their economies 

and in this regard, many developing countries 

have adopted or are in the process of enacting 

competition laws. 

In Pakistan, a regime regulating Competition was 

introduced in the 1970’s through the Monopolies 

and Restrictive Trade Practices Ordinance 

(MRTPO) of 1970 with the Monopoly Control 

Authority acting under its authority. However the 

scope of the MRTPO was severely constrained 

by the Economic Reform Order of 1972 which 

resulted in a broad nationalization process that 

affected the major part of the economy. 

Among other limitations, the MRTPO was not 

applicable to state owned enterprises under 

§25 and in the fast changing global and national 


Competition and Anti-Trust 

economic environment after the 1980s, the 

MRTPO was found inadequate to address 

competition issues effectively because of the 

incompleteness of the legal framework and the 

lack of professional expertise in the Monopoly 

Control Authority (MCA), the agency established 

for its implementation. 

Those deficits and Pakistan’s increased 

exposure to the challenges of global trade 

made it imperative to update the competition 

law and thus the Government of Pakistan 

completely overhauled its competition regime 

in 2007 by enacting a new legislation, namely, 

the Competition Ordinance of 2007, which 

became an Act of Parliament in 2010 – a modern 

competition law essentially grounded on 

European Legal principles. 

in all spheres of commercial and economic 

activity to enhance economic efficiency and 

to protect consumers from anti-competitive 

behavior across Pakistan. Commission can take 

action against unjustified raises in prices, sale of 

products at prices below their cost, conditional 

sale of products or services, agreements or 

cartelization that affected the competitive 

environment, dissemination of false information 

to consumers, or false use of another firm’s 

trademark or packaging. 

Furthermore, the Commission has been given 

the powers to take suo motu action against 

businesses violating the competition laws 

and can impose fines up to Rs75 million or an 

amount not exceeding 10 percent of the annual 

turnover of the undertaking. 

businesses to continue with their unfair practices 

and therefore it is imperative for the Judiciary 

to uphold and recognize the decisions of the 

Commission and subsequently dismiss such 

frivolous cases at an interim stage. 

Moreover, some capitalists who could be 

penalized for flouting the anti-monopoly rules, 

have challenged the Competition Act 2010 in 

court on the plea that the central government 

could not apply the law as it is a provincial 

subject after the passage of 18th Amendment. 

Surprisingly, the court has also consented to 

hear a petition about whether certain federal 

institutions have become redundant after the 

18th Amendment and will determine the future 

of the Competition Commission of Pakistan and 

the penalties. 

a subject matter of the Federal government, as is 

the case in many developed countries. 

Nonetheless, even despite the challenges being 

faced, the Competition Commission of Pakistan 

has demonstrated its independence by adopting 

an aggressive approach and taking stringent 

action across all sectors. 

The Commission has taken notice of alleged 

cartels in Pakistan‚ especially in the cement 

industry and has also issued various show cause 

notices to business entities questioning the 

adoption of practices that tend to distort the 

principles of fair competition. 

The Commission when taken notice of an 

alleged collusion in the banking industry was 

faced with the preposition that the State Bank 

The Competition Act 2010 seeks to ensure free 

competition for commercial and economic 

activities and aims at protecting consumers from 

monopolization, cartelization and other harmful 

practices. The Act applies to all undertakings 

in Pakistan regardless of their public or private 

ownership and to all actions or matters that can 

affect competition. 

Although essentially an enabling law, it sets out 

procedures relating to the review of mergers and 

acquisitions, enquiries, imposition of penalties, 

grants of leniency and other important aspects 

of law enforcement. Briefly, the competition law 

of Pakistan is based on the doctrine of ‘restraint 

of trade’ and therefore prohibits situations 

that tend to diminish, distort, or eliminate 

competition such as actions constituting an 

abuse of market dominance, competition 

restricting agreements, and deceptive marketing 

practices. 

The Competition Commission of Pakistan 

(Commission) is an independent, quasiregulatory, 

quasi-judicial body that is exclusively 

mandated under the Competition Act 2010 to 

ensure that competitive forces are unhindered 

Moreover, since the drive to establish legal 

and institutional frameworks in order to fight 

anti-competitive practices has intensified in 

recent decades, the Commission has prepared 

a Voluntary Competition Compliance Code 

(Code) to serve as a guide for competition laws’ 

compliance. 

The Code stipulates a formal internal framework 

for undertakings and their employees to ensure 

compliance with the provisions of the Act and its 

associated rules and regulations. The Code also 

helps detect any violations at an early stage thus 

enabling appropriate and timely remedial action. 

Despite playing such a crucial role towards 

anti-trust activities in Pakistan, the Institution 

encounters various difficulties in terms of 

financial autonomy and through the Courts 

of Law which inevitably affect its operations 

adversely. Since its inception the Commission 

has imposed over Rs.26.5 billion penalties 

however only except in a couple of cases, all 

parties have brought forth challenges against the 

Orders and obtained interim injunctions. In such 

cases where fines and penalties are imposed 

by the Commission, the delay in verdicts helps 

It is worth mentioning that if Commission is 

regularly challenged in courts for applying their 

constitutional authority, the consequences 

will be disastrous for businesses as well as the 

functioning of the state. 

Moreover, the merit in the argument that a 

province can have its own competition law is 

untenable for such a regime would leave a 

national cartel beyond the reach of Law, thereby 

complicating matters unnecessarily and may 

create many loopholes which could be abused by 

cartels and those willing to exploit the State. 

It could give rise to a situation where four 

businesses, in four separate provinces, fix 

prices while lowering the quality of their similar 

product through an understanding. Such a cartel 

would be impacting the entire national market, 

but since each of the cartel members would be 

operating from a separate province, it would be 

impossible to break the grouping if there is no 

central anti-monopoly institution. 

For this reason, the anti-competitive practices 

should be recognized as a national interest and 

hence the regulation of Competition Law shall be 

Act ousts the jurisdiction of the Commission in 

matters pertaining to the banking sector and 

established that the agreements or concerted 

practices relating to interest rates, charges and 

similar parameters of competition fall within the 

purview of the competition agency. 

Some of the most prominent achievements 

of the Commission, include the action against 

18 companies involved in the cartel of powerdistribution-equipment 

supplied involved 

in price-fixing and quota distribution on 

Rs.45billion worth of public sector contracts. 

Upon receiving show-cause notices alleging 

bid-rigging and collusion on public procurement 

tenders, Siemens Pakistan sought for leniency in 

exchange for a 100% disclosure. 

Suffice it to say for the present purposes that 

Siemen’s decision to comply and co-operate 

with the Commission has exposed the other 

17 companies in the cartel to penalties and 

punishments, including Pak Elektron which has 

a 28.7% market share. Another ground breaking 

decision by the Commission has been to impose 

a fine of Rs20 million on a company that had 

copied the brand of another company. Currently, 


Competition and Anti-Trust 

the Commission in investigating in the alleged 

‘exorbitant increase’ in air fares by private 

airlines following the cancellation of a large 

number of flights by the Pakistan International 

Airline (PIA) recently. 

Such decisions will go a long way in improving 

international trade practices in the country. 

The international market and investors keenly 

observe such fundamental issues that provide 

support and sustainable growth of their 

businesses and promote a culture of respecting 

fair competition in the country. 

Therefore it is about time that the Government 

and the judiciary recognize the need to prioritize 

matters of economic importance and harmonize 

governmental policies with the competition law. 

Primarily, competition assessment shall be made 

mandatory at the policy design stage. This would 

benefit enforcement by all economic regulators 

and contribute towards effective enforcement by 

regulatory bodies with less harm to competition. 

As a major initiative to bring Pakistan at par 

with the global agencies, Ms. Rahat Kaunain, 

the former Chairperson of the Competition 

Commission of Pakistan requested the United 

Nations Conference on Trade and Development 

(UNCTAD) to undertake a peer review of 

Pakistan’s competition law and policy. The Peer 

review team assessed the state of competition 

law in Pakistan, the regulatory framework 

along with the achievements and challenges 

faced by the Commission and prepared a 

Peer Review Report under the supervision 

of many international competition experts. 

The Report concluded that the achievements 

of the Competition commission of Pakistan 

are internationally recognized by the world 

competition community as performing a crucial 

leadership role in taking the Pakistani economy 

forward to a greater level of confidence on a 

competition-based and a consumer-welfare 

oriented market system. 

Moreover the Report acknowledged that the 

Commission has country-wide recognition with 

an excellent reputation based on integrity, 

technical competence and governance and it 

is to be considered one of the best performing 

newly established agencies in the developing 

world. The report strongly recommended, 

amongst others, that the provision in the Act 

which stipulates that 3% of the revenue of 

the regulatory agencies of Pakistan should 

form part of the Commission Fund should be 

finally implemented thereby permitting the 

Commission to focus on implementing advocacy 

policy more effectively by expanding its outreach 

and establishing its regional offices. 

In light of the above it is established that the 

Competition Commission of Pakistan has been 

an essential example for institution building 

in Pakistan, favoring not only the consistency 

and stability of institutions themselves, but also 

the legal certainty able to attract the inflow of 

investments. Therefore one can safely conclude 

that Pakistan’s competition regime is out of 

the shadows, and in lockstep with best global 

practices. 

European Union: Reforms to trade 

mark legislation 

By Rachel Havard, 

Suzanne Power 

On 23 and 24 December 2015, the EU Council approved a package of reforms 

to the laws governing trade marks within the European Union. The 

reforms are anticipated to have wide-reaching consequences for holders of and 

applicants for trade mark rights within the EU. Many significant changes 

have already taken effect as from 23 March 2016, with particular impact 

upon the system for unitary EU-wide registration of trade marks. 

Hanya Haroon 

Associate at Ali & Associates 

T: +92 21 3453 4580 

Email: hanya@aliassociates.com.pk 

Background 

Trade mark law within the EU is governed by 

both European Union law and the national 

laws of EU member states. These laws 

underpin the two main systems for obtaining 

trade mark protection in the EU, i.e. that 

most recently known as the “Community” 

trade mark system (through which protection 

can be obtained throughout the whole EU 

through a single application) and the national 

registration systems of EU member states 

which have continued to exist in parallel with 

the unitary EU-wide registration system. 

The package of reforms approved by the EU 

Council at the end of last year consists of a 

new EU Trade Mark Directive (EU) 2015/2436, 

along with a series of amendments to the 

existing Community Trade Mark Regulation 

by means of Regulation (EU) No 2015/2424. 

These will affect both unitary EU-wide and 

national trade mark rights. 


Anti-trust/Competition Intellectual Property Law 

New EU Trade Mark 

Directive 

• Non-use of registered marks: Owners 

of trade marks that are more than five 

The amended Regulation came into force 

on 23 March 2016, and so the changes 

a lower basic application fee of EUR 850, 

which only covers one class of goods and 

Although national trade mark laws of 

years old will only be able to enforce their 

associated with it may be more acutely 

services. The cost of filing in two classes is 

individual EU member states have for 

rights to the extent that they are in use. 

noticed by trade mark applicants and right 

EUR 900, and each class included thereafter 

many years had their roots in an older 

The Directive will introduce a mechanism 

holders in the EU. 

will add EUR 150 in fees. It is therefore more 

“harmonisation” Directive (Council Directive 

for respondents to request proof of use of 

expensive to file in three or more classes 

No. 89/104/EEC), there remains some 

such earlier rights enforced against them. 

The following are perhaps the most 

under the amended Regulation. 

divergence. The new EU Trade Mark Directive 

significant changes of which to be aware: 

has been introduced with a view to better 

• New anti-counterfeiting measures: 

The above change should prompt the filing 

harmonising the trade mark laws of member 

holders of EU trade marks will be able to 

• Terminology: the Community Trade Mark 

of EUTM applications for better focussed 

states. 

seize counterfeit goods in transit through 

(CTM) has been renamed the European 

specifications of goods and/or services than 

the EU, even if the goods are not targeted 

Union Trade Mark (EUTM). This reflects the 

has previously been the case. Historically, 

Some of the important provisions within 

at EU consumers. Rights holders will 

geographical scope of this right in a more 

Community trade mark applicants would 

the new Directive are as follows: 

also have means to prevent others from 

meaningful way. 

often include more classes than needed due 

affixing trade marks to packaging, labels, 

to the ability to include up to three classes for 

• Graphical representation: The 

security or authenticity features and 

On 23 March 2016, all Community Trade 

one fee. 

requirement for a mark to be capable of 

from selling, stocking or importing such 

Marks automatically became European 

“graphical representation” will be removed, 

packaging, labels, tags, security tags, if this 

Union Trade Marks; holders of existing 

This caused issues later on, due to the 

potentially paving the way for an increased 

is without authorisation. 

CTM applications and registrations have 

inability to prove, if challenged on non-use 

uptake in the filing of non-traditional 

not needed to take any action to effect this 

grounds, genuine use of the registered 

types of trade mark – such as smells and 

The entitlement of an EU trade mark 

change. 

mark upon all goods or services registered. 

holograms. However, applicants will still 

holder to prevent transit of goods through 

It also led to uncertainty for third parties 

need to present their marks in a manner 

the EU would lapse, however, if the party 

The EUTM is now administered by the 

looking to clear their own marks for use 

which is deemed, inter alia, to be clear and 

responsible for the goods is able to prove 

European Union Intellectual Property 

and registration, when the true goods and 

precise. It therefore remains to be seen 

that the EU trade mark holder would not 

Office (EUIPO) – formerly known as The 

services of interest to an existing Community 

whether more non-traditional marks will 

be entitled to prohibit use of the trade 

Office for Harmonisation in the Internal 

trade mark owner were difficult to ascertain. 

be accepted for registration under the new 

mark in the country of final destination. 

Market (“OHIM”) or the Community 

Directive. 

Trade Marks Office. Again, this is a more 

Also, these earlier trade marks would 

It will be some time before the changes 

accurate description as the EUIPO does 

continue to pose a registered trade mark 

• Administrative procedures: The national 

prompted by the Directive filter through to 

have responsibility for protection of other 

infringement risk for all goods and services 

trade mark offices of EU member states 

the national level; for most of the provisions, 

intellectual property rights than trade marks, 

covered until sufficiently mature for challenge 

will be required to introduce opposition, 

member states have at least three years to 

namely, designs. 

on non-use grounds. 

revocation and invalidity procedures, if 

implement them into their local laws. 

they do not already offer them. In some 

member states it is currently only possible 

to bring such actions at Court, which 

can result in longer and more expensive 

proceedings. 

• Own name defence: Companies will no 

longer be able to cite honest use of their 

own name as a defence to infringement of 

another party’s trade mark. The ‘own name 

defence’ will only be available to natural 

persons (i.e. individuals) who use their 

Amendments to existing 

Community Trade Mark 

Regulation 

The package also consists of a number of 

amendments to the existing Community 

Trade Mark Regulation, which governs 

Community trade marks (the unitary right 

that affords holders trade mark protection 

throughout all EU member states – until 

recently known as the CTM). 

• Application and renewal fee changes: 

under the amended Regulation, 

application fees for EUTMs will in some 

cases rise, but renewal fees will fall across 

the board. 

Previously, the basic fee for a Community 

trade mark application was EUR 900, which 

included three classes of goods and services. 

Each subsequent class added EUR 150 to the 

basic fee. 

Renewal fees, however, have fallen, 

regardless of the number of classes covered 

by a registration. The fees set out above for 

new applications will also apply to renewals, 

whereas previously renewal fees always 

exceeded the equivalent cost of a new 

application. 

• Interpretation of class headings: the 

amended Regulation clarifies the Office’s 

established position that trade mark 

specifications are to be given a literal 

personal names. 

The amended Regulation has introduced 

interpretation. 


41

Anti-trust/Competition Intellectual Property Law 

Under the Nice classification system, goods 

and services of trade mark specifications are 

grouped into 45 administrative ‘classes’. Each 

class is assigned a general description of the 

goods and services that fall within it, known 

as a ‘class heading’. For instance, the heading 

of class 15 is musical instruments. 

In the past, applicants may have filed for the 

class heading to secure protection in relation 

to all goods or services that were deemed to 

fall within that class. However, the amended 

Regulation will confirm the Office’s position 

that protection for a class heading only 

extends to the specific terms named in that 

heading, or that fall within its scope. 

September 2016 according to the wording 

of the Regulation; but many are taking the 

6 month window for declarations to close 

on 23 September 2016, and it would be 

prudent to address any required specification 

amendments in good time prior to either 

date. After the September deadline, class 

heading terms will be given their literal 

meaning, with the associated risks detailed 

above. 

Other provisions for the EUTM system include 

potential for registration of “Certification” 

trade marks, as already available in certain EU 

member states, and the offering of mediation 

services. 

registrations is exactly what they need. This has placed the newly named EUIPO in 

an excellent position to assist other member 

The Community/unitary EU-wide trade mark states with improvement of their systems and 

registration system has been an enormous towards true harmonisation of trade mark 

success since its creation around two 

law and practice within the jurisdiction. 

decades ago. 

What will the next decade bring? 

Rachel Havard 

Partner and Trade Mark Attorney at A.A. Thornton & Co. 

For example, under the amended Regulation, 

a specification consisting of the class 15 

heading musical instruments will be deemed 

not to extend to other class 15 goods such 

as music stands and tuning forks, as they 

fall outside the literal interpretation of the 

heading. 

If and when a registration covering such 

goods is more than 5 years old, and absent 

genuine use of the mark on the registered 

goods or proper reasons for non-use, the 

registration could be cancelled in its entirety. 

Right holders beware: The restricted 

interpretation of specifications applies to 

Community trade mark applications and 

registrations filed before the amended 

Regulation came into force, as well as to any 

EUTM applications filed thereafter. 

Holders of EUTM registrations that were 

filed before 22 June 2012, and which are 

registered in respect of the entire heading 

of a Nice class, have the opportunity to file a 

declaration clarifying the goods and services 

that they intended for the heading to cover. 

Such declarations will need to be filed by 24 

For International Trade Mark Registrations 

designating the EU for protection, the three 

month period for third party opposition 

following publication will commence one 

month after publication rather than six 

months. 

This too should be a welcome change in the 

long run, as it will shorten the long period 

it was previously necessary to wait for an 

EU designation to be able to proceed to full 

protection. However, those interested in 

lodging oppositions to an EU designation 

will need to be mindful of the change to 

calculation of opposition deadlines. 

Looking ahead 

Whilst some of these changes will take time 

to implement, others, particularly those 

associated with the amended Regulation, are 

already in force. 

Changes to address the scope of 

specifications of goods or services of a 

registration will ultimately lead to more legal 

certainty but in the short term will require 

close attention of existing rights holders to 

ensure that the scope of protection of their 

T: +44 (0) 1604 638242 

Email: rsh@aathornton.com 

Rachel has been a partner of A.A. Thornton & Co. since 2006 and is a UK and European 

Union trade mark attorney. Rachel has worked in the trade mark field for over 20 years 

and specialises in UK and European Union trade mark prosecution. Her caseload includes 

the clearing of new trade marks for use and registration, securing worldwide protection of 

marks and handling of International Registrations, along with opposition and cancellation 

proceedings including, where appropriate, the negotiation and drafting of co-existence 

agreements. Her portfolio of clients covers many industry sectors, including pharmaceuticals, 

healthcare products, outdoor clothing, footwear and homewares. 

Suzanne Power 

Trade Mark Attorney at A.A. Thornton & Co. 

T: +44 (0) 20 7405 4044 

Email: sap@aathornton.com 

Suzanne joined A.A. Thornton & Co. in 2013, after graduating from a degree in French and 

Linguistics at Oxford University, and qualified as a UK and European Union trade mark 

attorney in September 2015. Suzanne works with clients in sectors such as fashion, food and 

beverage, investments, healthcare, pharmaceuticals and charities. Her primary responsibilities 

include preparing and filing applications to register trade marks, including undertaking 

searches to check for conflicting intellectual property rights; renewing and recording changes 

to registrations; devising strategies for the long-term management of registration portfolios; 

and assisting with copyright and designs advice and applications. 


43

Biotech and Pharmaceutical 

Updates in the Pharmaceutical Sectors – under 

Chinese Competition Law Regime 

By Susan Ning, 

Zhifeng Chai 

pharmaceutical companies stating that 

it found after an investigation that five 

companies had reached and implemented 

monopoly agreements on the sales of 

allopurinol ingredients during the period 

between April 2014 and September 2015. 

In its decision, NDRC claimed that the 

five companies, Chongqing Qingyang 

Pharmaceutical and its distributor Chongqing 

Datong, the Place Pharmaceutical Jiangsu, 

Shanghai SINE Pharmaceutical and its 

distributor Shangqiu Huajie held, from 

April 2014 to April 2015, four meetings on 

the distribution of allopurinol and reached 

monopoly agreements on: 

(1) fixing and raising allopurinol prices; 

(2) dividing markets for sales of 

allopurinol; and 

(3) reaching an agreement on bidding in 

different areas. 

It is worth noting that, NDRC recently 

published in its journal an article outlining the 

key antitrust enforcement priorities in 2016. 

According to the article, in product-related 

areas, NDRC will closely focus its supervisions 

on pharmaceuticals, medical devices, auto 

parts, as well as industrial materials in the 

future. 

Important Legislation 

Updates in 2015 in 

Pharmaceutical Sector 

Open the market to Foreign Investors 

In China, foreign investment must conform to 

the national industrial policies. The Guideline 

Catalogue of Foreign Investment Industries 

(revised in 2015) (“Catalogue of Foreign 

Investment”) provides the entry requirements 

and restrictions for foreign investment in 

various industries. 

It is the eighth year since the Chinese Anti-Monopoly Law (“AML”) came 

into effect. As the focus of the AML enforcement expands increasingly across 

a variety of industries these years, pharmaceutical sector becomes one of 

them. What is more, in 2015, some major Chinese legislation regarding 

pharmaceutical sector were revised to reduce the restrictions imposed on the 

pharmaceutical market by the government. 

This may lead to the result of, on the one 

hand, promotion of competition in the 

pharmaceutical market, which provides 

a better environment for pharmaceutical 

companies in the marketplace. 

On the other hand, this may render the 

pharmaceutical companies exposed to more 

surveillance of competition enforcement 

in China. Against this backdrop, this article 

first introduces the recent AML enforcement 

in the pharmaceutical sector in China, 

and then explains the legislative updates 

on pharmaceutical sector as well as their 

potential effects on the industry from a 

competition law perspective. 

Recent AML Enforcement in 

Pharmaceutical Sector 

On 2nd February 2016, the National 

Development and Reform Commission 

(“NDRC”) published on its website the 

penalty decision regarding five domestic 

As a punishment, NDRC requested the five 

companies to terminate their illegal behavior 

immediately and imposed a fine of 3.995 

million RMB (USD 610,000) in total. 

Furthermore, on 22nd December 2015, the 

Chongqing municipal branch of the State 

Administration for Industry and Commerce 

of the People’s Republic of China (“Chongqing 

AIC”) imposed one of the above-mentioned 

five pharmaceutical companies, Chongqing 

Qingyang Pharmaceuticals, with a fine of 

4.393 million RMB (USD 68,000), or 3 percent 

of its 2013 revenue, for abusing its market 

dominance. 

After investigation, the Chongqing AIC found 

that Chongqing Qingyang Pharmaceuticals 

had stopped supplying allopurinol ingredients 

to its distributors and other manufacturers 

of allopurinol for half a year in order to raise 

the prices of the ingredients and increases its 

share of the allopurinol market. 

The Catalogue of Foreign Investment 

divides specific industries into “encouraged”, 

“restricted” and “prohibited” categories while 

those that are not listed in the Catalogue of 

Foreign Investment are generally permitted 

for foreign investment. 

Before the Catalogue of Foreign Investment 

was revised in 2015, pharmaceutical 

manufacturing sectors fall into all three 

categories mentioned above, which 

means foreign investment in some of the 

pharmaceutical manufacturing sectors are 

“encouraged”, while some of the others are 

“restricted” or “prohibited”. 

However, in the most recent version 

of Catalogue of Foreign Investment, all 

pharmaceutical manufacturing sectors that 

previously fall into ‘restricted’ categories 

were totally removed. Except for the sectors 

that fall into “prohibited” category, all other 

pharmaceutical manufacturing sectors are 



now permitted or “encouraged” to foreign 

investments. 

This revision opens most of the Chinese 

pharmaceutical market for foreign investors, 

and we would surely expect an upward trend 

in the number and portion of the foreign 

investment into this market. 

Remove Maximum Price for Most Drugs 

Regarding the drugs’ pricing, the Chinese 

government supervised the drugs by fixing 

the maximum retail prices. Article 55 of 

the China’s Drug Administration Law states 

that business operators shall observe the 

regulations stipulated by the responsible 

department of price control of the State 

Council, such as NDRC. 

The above regulatory pricing control has 

been reformed. On 4th May 2015, NDRC, 

the National Health and Family Planning 

Commission (“NHFPC”), the Ministry of Human 

Resources and Social Security and some 

other departments jointly published an 

announcement on issuing the Opinions on 

Promoting Drug Pricing Reform (“Opinions”). 

This document removes government pricing 

controls for most drugs (with the exception of 

narcotics and type I psychotropic drugs) from 

1st June 2015 onwards. 

After the removal, the drug prices will 

instead be formulated by the market through 

different means according to the principle of 

administration by classification. 

On the same day, NDRC published the Notice 

regarding the Strengthening the Supervision 

and Administration on Pricing of Drugs 

(“Notice”) which concerns a range of specific 

issues on the supervision over drug price, 

including launching special inspections into 

illegal conducts under the Price Law and the 

AML. 

Both the Opinions and the Notice cover 

the issue of reforming the drug pricing 

mechanism and reinforcing comprehensive 

supervision over medical expenses and 

prices. 

We understand that at least partly due to 

the previous implementation of mandatory 

ceiling price, the Chinese antitrust authorities 

rarely punish pharmaceutical companies for 

excessive pricing under the AML. However, 

after the reform, since the maximum 

price for most of the drugs are removed, 

pharmaceutical companies would be more 

susceptible to excessive pricing challenges, 

which just falls within one of NDRC 

enforcement priorities. 

Conclusion 

The pharmaceutical sector has been under 

close scrutiny by antitrust enforcers globally 

as well as in China. 

The legislative revision enables the Chinese 

pharmaceutical market to be more accessible 

to foreign investors, which may accordingly 

intensify the competition in the Chinese 

market. The removal of ceiling prices for 

most drugs may also lead to more intensive 

competition in the Chinese market since 

fewer restrictions from the government 

would encourage undertakings to freely 

compete. 

The freedom, however, may conversely 

expose pharmaceutical companies under 

the AML enforcers’ surveillance. Chinese 

AML enforcers would always keep an eye 

on pharmaceutical companies, especially 

those with certain level of market powers. 

Pharmaceutical companies should be 

cautious regarding their business decisions 

and behaviors, and conduct routinely 

antitrust internal compliance review to avoid 

any possible AML violations. 

Susan Ning 

Senior partner and the head of the commercial and regulatory group 

T: +86 10 5878 5010 

Email: susan.ning@cn.kwm.com 

Susan joined King & Wood Mallesons in 1995. She is a senior partner and the head of the 

commercial and regulatory group. She is one of the first legal practitioners in China to practice 

antitrust and competition law and to set up an antitrust specialist division in China. Susan is 

a leading lawyer in the Chinese antitrust and competition field, focusing on MOFCOM merger 

control filings, antitrust investigations, compliance and antitrust litigation. Since 2003, Susan, 

together with her team, has undertaken many high-profile antitrust merger control filings 

on behalf of clients, and assisted a number of well-known clients on antitrust investigations. 

Susan has acted for Qihoo in relation to the landmark antitrust litigation with Tencent. 

Susan and her team have been highly acclaimed in Chinese antitrust practice for years. For 

example, for six consecutive years (2010-2015), Susan has been listed in Who’s Who Legal: 

Competition. In 2015 alone, Susan was recognised as one of the top female lawyers in China 

and selected as a leading lawyer by many professional institutions, such as Chambers, The 

Legal 500 and ALB. Under her leadership, KWM’s Chinese competition and antitrust team was 

selected as the leading team for competition practice in PRC and recognised many times as a 

top-tier law firm in antitrust and competition. 

Zhifeng Chai 

Partner at King & Wood Mallesons 

T: +86 21 2412 6395 

Email: chaizhifeng@cn.kwm.com 

Mr. Zhifeng Chai is a partner in the Antitrust and Competition Division at KWM. His antitrust 

experiences can be traced back prior to the enactment of PRC Anti-monopoly Law. Mr. Chai’s 

practice mainly focuses on submitting merger control filings to MOFCOM on behalf of clients 

and representing clients in designing, negotiating and implementing conditions in merger 

filings conditionally cleared by MOFCOM; providing strategic advices regarding transaction 

pattern from antitrust perspective; providing antitrust and anti-unfair competition compliance 

consultation regarding clients’ business mode, distribution channel, pricing policies 

etc.; providing antitrust training; cooperating with antitrust and anti-unfair competition 

administrative investigations on behalf of clients and assisting clients in antitrust private 

litigations, etc. Mr. Chai provides services to clients including international companies, SOEs 

and domestic companies. He has dealt with projects involving various industries including 


Disputes in Energy 

The rise of Solar Power in the Netherlands 

By Michel Chatelin 

Introduction 

Solar power is booming in the Netherlands. In 

the past years the number ofPhotovoltaics power 

(“Solar PV”) has increased tremendously. The 

Statistics Netherlands has estimated that the total 

amount of Solar PV has increased from 90 Mw in 

2010 to 1048 Mw in 2014 1 . It is expected that the 

amount of Solar PV will continue to grow rapidly in 

the coming years. 

In September 2013 more than 40 Dutch 

organizations have signed the Agreement on 

Energy for Sustainable Growth. This agreement 

marked the start of a transition to a sustainable 

future in the Netherlands. The agreement aims to 

increase the proportion of energy generated from 

renewable sources from 4.4% in 2013 to 14% in 

1 http://statline.cbs.nl/Statweb/publication/?DM=SLNL&PA=8261 

0NED&D1=7&D2=5&D3=20-24&HDR=T&STB=G1,G2&VW=T> 

2020 and 16% in 2023. The Dutch government has 

implemented a variety of measures in order to 

meet these sustainability goals. 

Despite the advancing technological 

developments, renewable energy is still 

more expensive than fossil energy. Various 

measures are therefore required to expedite the 

introduction of renewable energy solutions. In 

this article the most important measures will be 

discussed which the Dutch government has taken 

in order to expedite the implementation of Solar 

PV in the Netherlands. 

Solar PV 

Solar cells, also called PV, convert sunlight directly 

into electricity and can be installed on rooftops 

or can be ground based. Investing in Solar PV 

has become increasingly more interesting in 

the Netherlands.The costs of Solar PV have 

dropped in the past years and the installation 

of PV installations has become user-friendlier. 

However, this is not the main reason why the 

amount of Solar PV has increased rapidly in 

the past years in the Netherlands. The growing 

investments in Solar PV power are mainly due 

to a number of measures taken by the Dutch 

government and are expected to continue 

growing in the coming years. 

SDE+ 

In the Netherlands the main support 

instrument for Solar PV power is the so-called 

SDE+ scheme.The SDE+ scheme is a premium 

feed-in scheme, which provides producers of 

renewable energy financial compensation for 

the production of energy. The production of 

Solar PV is usually more expensive than the 

production of fossil energy. The difference 

between the cost price of fossil energy 

and Solar PV is the so-called unprofitable 

component. 

The SDE+ scheme compensates producers 

of renewable energy for the unprofitable 

component for a period of 15 years. The 

amount of SDE subsidy is dependent upon the 

development of the cost price of fossil energy. 

A high fossil energy price implies a low SDE+ 

subsidy, whereas a low fossil energy price 

implies that the renewable energy producer 

will receive a higher compensation from 

the buyer. 

In spring 2016 the budget for the SDE+ 

scheme is EUR 4 billion. The SDE+ scheme 

encompasses a system of phased admission 

with escalating base tariffs, which favors 

low cost renewable energy options. The 

primary target groups for SDE+ subsidies 

are companies, institutions and non-profit 

organizations. 

Only projects connected to a large-scale energy 

connection (> 3*80 Amp) are eligible to the 

SDE+ subsidy. Energy producers with asmall 

energy connection (< 3*80 Amp) may consider 

acquiring a large-scale energy connection 

in order to be eligible for the SDE+ subsidy. 

However, the costs for acquiring alarge-scale 

energy connection can be considerable. 

Net-metering 

Net-metering is particularly interesting for 

small-scale energy projects in the Netherlands, 

in particular for residential housing.Small-scale 

energy projects entail Solar PV producers with 

a small-scale energy connection (3*80 Amp). 

Net-metering isthe physical compensation of 

Solar PV production during a period of time 

and basically means that the electricity meter 

turns backward when produced Solar PV 

energy is supplied to the grid. 

Therenewable energy canbe fed in to the grid 

and withdrawn from the energy consumption. 

The amount of energy which can be fed 

in to the grid cannot be higher than the 

amount of energy consumed from the grid. 

For small-scalerenewable energy producers, 

energy taxes only apply to the net electricity 

consumption. The net energy consumption is 

the difference between the electricity obtained 

from and fed-in to the grid. 

Following the principle of non-discrimination, 

the access to supply solar energy to the 

grid must be granted to small-scale energy 

suppliers. Grid operators are generally obliged 

to develop the grid to provide sufficient 

capacity for the access and transmission of 

electricity. 

A different legal regime is applicable to energy 

producers with a large-scale energy connection 

(> 3*80 Amp). Contrary to projects with a 

small-scale energy connection, projects with a 

large-scale energy connection do not have the 

statutory right to feed energy to the grid. 


Disputes in Energy 

Large Solar PV projects can supply energy to the 

grid but need to negotiate a contract with an 

energy supplier.Renewable energy producers 

with a large-scale connection fall within a less 

restrictive legal regime. A more restrictive legal 

regime is only applicable to small-scale energy 

suppliers. 

Tax benefits for collective 

production of renewable energy 

Besides the SDE+ scheme and net-metering, 

investments in Solar PV are supported via loans 

and various tax benefits in the Netherlands. One 

of the most interesting tax benefits is provided in 

the scheme reduced tariff for collective production 

of renewable energy (“Verlaagd tarief voor 

collectieve opwek”). 

This scheme provides associations of owners 

and cooperative associations the possibility to 

jointly produce renewable energy with certain tax 

benefits. Participants of this collective scheme 

jointly invest in a renewable energy installation. It 

is required that all participants are resident in a 

postal code area close to the energy installation. 

The jointly produced energy is subsequently being 

sold to an energy supplier. The energy sold to the 

energy supplier is credited to the energy bill of 

the participants to the scheme. It must be clear 

what share each participant has in the renewable 

energy installation in order to correctly benefit 

from this tax advantage. 

Conclusion 

Solarenergy is booming in the Netherlands. The 

increasing investments in Solar PV installationsin 

the Netherlandsare mainly due to the measures 

taken by the Dutch government. In this article 

the SDE+ Scheme, net-metering and the scheme 

reduced tariff for collective production of 

renewably energy have been discussed. 

All three measures have made a contribution to 

the current growth in Solar PV in the Netherlands. 

Although the growing investments in Solar PV are 

a very positive development, the Netherlands still 

lags behind the sustainability goals. In 2014 the 

proportion of energy generated from renewable 

sources was only around 5,5%. This proportion 

must be 14% in the 2020. The measures taken 

by the Dutch government and the required 

investments in order to meet the 2020 goals make 

the Netherlands a very interesting opportunity to 

invest in Solar PV. 

Further Changes Expected in Indian 

Companies Act 2013 

By Suhas Tuljapurkar, 

Apurv Sardeshmukh 

Michel Chatelin 

Partner at Eversheds 

T: +31 20 5600 651 

Email: MichelChatelin@eversheds.nl 

Michel Chatelin is partner with Eversheds en leads the practicegroup Competition & Regulatory. 

He has wide experience in sectors energy & utilites, healthcare, social housing and retail. Michel 

advises national and international companies, as well as governmental bodies and public sector 

companies. 

Michel is acting vice chair of the supervisory board of the Amelander Energie Coöperatie, member 

steering committee solarpark Ameland, member of the Dutch competition law association and 

member of the Dutch Energy law association 

Background: 

For more than fifty years Companies were in 

India were governed by the Companies Act, 

1956.However there was need to replace the 

old legislation with a new act which could 

address the changing landscape of the Indian 

corporate world. 

The majority of the provisions of the new 

Indian Companies Act 2013 (‘Act’) came 

into effect in two phases- 98 sections of 

the Act were brought into effect in October 

2013 and 183 sections were notified and 

brought into effect in April 2014. However 

the Act was seen by many as restrictive and 

cumbersome- particularly for closely held 

private companies. 

Private Companies were finding it increasingly 

difficult to comply with the various procedural 

requirements prescribed for aspects like 

raising of further capital, private placement of 

shares etc. Further some of the compliance 

requirements under the Act were considered 

to be too onerous on private and small 

companies. 


Company Formations 

In June 2015, the Ministry of Corporate Affairs 

It has now been recommended that this 

KMPs respectively. The CLC has noted that 

• Thresholds for pecuniary relationships 

of the Government of India, constituted the 

procedure should be simplified for private 

since the securities in private companies 

of Independent Directors: The Act 

Companies Law Committee (‘CLC’) to make 

companies. 

would not be marketable, they would not 

specifies that an independent director 

recommendations on the issues arising 

qualify as securities within the meaning 

must not have any pecuniary relationship 

from the implementation of the Act. The CLC 

Section 62 of the Act deals with further 

of Section 195, and thus would exclude 

with the company, its holding, subsidiary 

released its report on February 1, 2015 and 

issues of shares on preferential basis. Under 

private companies from the ambit of 

or associate company or their promoters 

recommended as many 100 changes to 

the erstwhile Companies Act 1956, private 

the said provision. 

or directors, during the two immediately 

the Act. 

companies were not required to follow 

preceding financial years or during the 

Significant 

Recommendations of the 

CLC 

the procedure specified for preferential 

allotment. However the present Act makes 

no difference between public and private 

companies in terms of the procedure to be 

followed for preferential allotment. 

The CLC observed that it would be 

unjustified to apply the insider trading 

regulations to private companies. The 

CLC further noted that insider trading 

prohibitions can be problematic in 

current financial year. There were no 

thresholds specified and even minor 

pecuniary relationships were covered 

due to this provision even though 

such transactions may not impact the 

While the CLC has suggested several 

the context of the rights of first refusal 

independence of directors. 

changes, some of the more significant 

This created hardships for closely held 

that are frequently contained in the 

recommendations of the CLC are as follows: 

private companies and in view of this is now 

shareholders’ agreements of private 

The CLC has proposed to introduce a 

proposed that procedure for preferential 

companies. 

threshold for pecuniary relationships in 

• Changes in some key definitions: Under 

allotments for private companies should be 

relation to qualification for an independent 

the Act, an associate company has been 

simplified. 

The CLC has also noted that the 

director. Further Clauses 149(6)(e) (i) of 

defined as one in which another company 

regulations specified by the Securities 

the Act restricted the appointment of an 

has control of: (i) at least 20% of shares, or 

• Investment through subsidiaries: As 

Exchange Board of India in terms of insider 

individual as an Independent Director in 

(ii) business decisions. It is now proposed 

per the Act, Companies were restricted 

trading are comprehensive in the matter 

case his relative is or was a KMP or an 

that this definition should be changed and 

from making investments through more 

(and also apply to companies intending to 

employee in the company, its holding, 

an associate company should be defined 

than two layers of investment subsidiaries. 

get listed), and in view of the practical 

subsidiary or associate company during 

as one in which another company has: (i) 

The CLC has recommended removal of 

difficulties expressed by stakeholders, 

any of the preceding three financial 

control of at least 20% of voting power, 

restrictions on layering of subsidiaries. 

sections 194 and 195can be omitted from 

years. In this regard, the CLC has 

or (ii) control or participation in business 

The CLC has explained that the existing 

the Act. 

recommended that the scope of the 

decisions. 

restrictions were having a substantial 

restriction should be modified and the 

bearing on the functioning, structuring 

While logically this seems to be a sound 

restriction should be only with respect 

• Raising of Further Capital by Private 

and the ability of companies to raise funds 

recommendation, it does not take into 

to relatives holding Board or KMP/ 

Companies: The two sections that 

.This is a positive development as this will 

account the fact that that there are valid 

one level below board positions prior 

deal primarily with raising of further 

allow Companies to undertake corporate 

reasons for including the insider trading 

to the appointment of such Independent 

capital under the Act are section 42 and 

restructuring which shall benefit their 

prohibitions in company law in addition 

Directors. However, the CLC has clarified 

section 62. Section 42 deals with private 

business. 

to securities law, as directors have 

that as it would be possible to influence 

placement of securities. Under section 

fiduciary responsibilities and there may be 

an Independent Director in case his 

42, Companies were required to go 

• Forward Dealing Forward dealing involves 

directors even in private companies and 

relative is also working in the situations 

through a long drawn out procedure for 

purchasing securities of a company for 

unlisted who may abuse their position 

referred to in the section irrespective 

raising capital by way of private placement 

a specific price at a future date which is 

and use confidential information, which 

of the position he holds, the scope of 

of securities. This procedure included 

currently prohibited under the Act for 

have come to them through their 

restriction after appointment of such 

opening of a separate designated account 

directors and key managerial personnel 

position, for personal profit and not act 

Independent Directors should, therefore, 

where the consideration for the securities 

of a company. The Act through Sections 

in the best interests of the company. 

be retained as originally prescribed. 

could be transferred, obtaining certificate 

of valuation of securities and submission 

of separate offer letters disclosing 

certain information about the company. 

194 and 195 has restricted forward dealing 

by directors and key managerial persons 

(‘KMP’s) of a company and insider trading 

by any person including directors and 

While the CLC noted this, they did not 

take this aspect into consideration while 

making their recommendations. 

Conclusion: 

The Companies Act 2013 is one of the key 



and important legislations in the country. 

Through notifications, circulars, amendment 

orders and clarifications, the Ministry 

of Corporate Affairs, has brought about 

approximately 140 changes to the original 

legislation since its inception. 

While the recent recommendations are very 

positive, it must be noted that if brought 

into effect, these will result in another 100 

amendments and significantly alter the 

landscape of governance of companies in 

the country. 

The number of amendments has caused 

hardships to companies and their advisors 

as the regulatory and compliance structure 

remains unclear. 

Many companies have taken steps to 

ensure compliance with the existing 

provisions, only to be told subsequently 

that the provisions are not applicable to 

them. One hopes that this is the final major 

exercise with respect to the amendments to 

the Act and the act gets a sense of finality. 

Waste-to-Energy in Vietnam 

By Nguyen Huu Hoai 

Suhas Tuljapurkar 

Managing Partner at Legasis Partners 

T: +91 20 3029 4228 

Email: suhas.t@legasispartners.in 

Suhas Tuljapurkar is the Managing Partner of Legasis Partners, a law firm having offices 

in Mumbai, Pune, Hyderabad and Delhi. He is also founder director of Legasis Services 

Pvt. Ltd., a legal support services provider (including IT-enabled legal support services), 

having global delivery centre at Pune. Suhas has specialist experience in the fields of 

Corporate Law, Intellectual Property and Technology law, and infrastructure law. He has 

advised a variety of multinationals, private equity funds and other corporates. 

The treatment of municipal solid waste (“MSW”) is difficult for local 

authorities. Thanks to the development of new technologies, however, MSW 

is becoming a serious source of renewable energy. Vietnam began to shape 

its regulations and policies to develop solid waste power plants (“SWPP”) in 

2012. Several investment incentives and favorable policies have now been 

issued to attract the private sector. This Article discusses regulations on SWPPs 

and power purchase agreements (“PPA”). 

Apurv Sardeshmukh 

Partner at Legasis Partners 

T: +91 20 3029 4228 

Email: apurv.s@legasispartners.in 

Apurv Sardeshmukh is a partner with Legasis Partners, Pune. He has advised a variety of 

companies on various aspects of corporate commercial laws, IT laws and labour laws. He 

has also acted on behalf of various private equity firms and advised many multinational 

corporations with respect to incorporation procedures in India. 

Legislation and PPAs. 

The policies and regulations are mainly set 

out in Decision 31/2014/QD-TTg of the Prime 

Minister dated May 5, 2014 (“Decision 31”), 

Circular 32/2015/TT-BCT of the Ministry of 

Industry and Trade (“MOIT”) dated October 

8, 2015 (“Circular 32”) and Decree 118/2015/ 

ND-CP of the Government dated November 

12, 2015 (“Decree 181”). 

According to Decision 31, the Group of 

Vietnam Electricity (briefly called EVN)–a 

state-owned corporation–is responsible 

to purchase the entire output of electricity 

generated from SWPPs. This policy assures 

investors that output can be sold. 

The sales, however, must be made 

according to a statutory PPA template set 

out in Circular 32. Although Circular 32 


Projects and Energy 

allows the contracting parties to change the 

earn reasonable profits within a 20-year 

It may be impractical for the contracting 

Import duty exemptions can also apply to 

template in order to reflect their agreement, 

period requires careful consideration and 

parties to choose an independent body 

materials, raw materials and semi-finished 

the main contents must be consistent with 

assessment. 

at the time of a dispute. The choice of 

products that are unavailable in Vietnam 

the template. 

independent arbitration at the outset seems 

and that must be imported. 

Price factors. 

The price, of course, is a fundamental factor 

The investor should seek the MOIT’s consent 

to extend the term of the PPA if there are 

any concerns and questions relating to the 

payback period. Agreement on extension 

to be more practical. 

Governing law. 

Preferential corporate income tax rates, 

corporate income tax reduction and tax 

holidays can also apply. These investment 

for the investor to make its investment 

of the term should be incorporated into the 

The PPA is governed by Vietnamese law. 

incentives can be obtained and documented 

decision. The price of electricity can vary 

PPA. 

Although Vietnamese law provides certain 

during the licensing process. 

widely, depending on the method of power 

generation. For example, the current 

price of electricity generated from direct 

The seller (power plant) may decide to 

participate in the competitive market for the 

protections and guarantees, these statutory 

protections may be seen to be insufficient 

if the PPA relates to foreign investors. It 

Licensing process. 

combustion of solid waste is US$10.05 cents 

generation of electricity. In such case, the 

is common that foreign investors will seek 

The municipal or provincial People’s 

per kWh. 

seller must send a 120-day notice to EVN, 

other contractual protections. 

Committees (“PC”) are authorized to issue 

and the PPA will be terminated after the 

investment registration certificates and 

By contrast, the current price of electricity 

120-day period. 

These contractual protections can be 

other operational licenses to WSPPs. Before 

that power plants using gas generated from 

incorporated into the PPA in order to ensure 

issuing licenses, the PC will often consult 

gasification can charge is only US$7.28 cents 

If so, the seller and EVN will then need to 

that their interests are protected. 

with other ministries (mainly the MOIT, 

per kWh. These prices exclude VAT. 

enter into other contractual arrangements 

the Ministry of Natural Resources and 

under which the price of electricity will be 

As the PPA involves state-related entities, a 

Environment and the Ministry of Science and 

Interestingly, prices can be adjusted by 

determined on a competitive basis (not 

private owner of an SWPP should consider 

Technology). 

reference to the VND-US$ exchange rate. 

based on a 

and incorporate the following matters into 

Recognition of exchange rate variation is 

fixed price). 

the PPA: 

Among other conditions, a solid waste 

a large assurance for foreign investors as 

it mitigates losses or risks resulting from 

devaluation of the Vietnamese dong during 

A PPA can also be terminated following a 

force majeure event if the condition lasts 

(i) waiver of sovereign immunity; 

(ii) protection against changes in the law; 

(iii) investment incentives; 

power project must be included in the 

national master plan. If a potential project is 

not included in the national master plan, the 

the project life. 

In addition to the price of electricity 

billable to EVN, a power plant that qualifies 

for financial benefits under the Clean 

Development Mechanism (“CDM”) pursuant 

to the Kyoto Protocol of which Vietnam is a 

signatory, has yet another source of income. 

for more than one year. Thus, the concept 

of a “force majeure event” should be welldefined. 

Settlement of disputes. 

A dispute must first be addressed through 

amicable negotiation. If the contracting 

(iv) government’s guarantee; 

(v) government’s force majeure events; 

(vi) subsequent increases of price (if 

possible); 

(vii) optional renewal of PPA after its 

expiry (if desirable); 

(viii) settlement of disputes through an 

independent body. 

investor must seek the MOIT’s consent. The 

MOIT is authorized to evaluate solid waste 

power projects. 

The statutory duration for the MOIT to 

evaluate a project is 30 business days. 

The MOIT may engage independent and 

professional consultants to evaluate a 

Term of PPA. 

The term of the PPA is 20 years commencing 

from the date on which the commercial 

operation begins. Oddly, it is uncertain 

whether the PPA can be renewed after 

its expiry. A large-scale SWPP will often 

require a substantial amount of capital. 

The question whether the price is sufficient 

to recover the investment capital and to 

parties fail to reach an agreement, the 

dispute can be referred to the Electricity 

Regulatory Authority (“ERA”) or to a body 

agreed by the contracting parties. 

The PPA relates to EVN, a stateowned 

corporation under the MOIT’s 

administration. The ERA is also a state body 

controlled and managed by the MOIT. In 

case of a dispute, the ERA’s independence 

may be compromised. 

Investment incentives. 

SWPPs are classified as “especially 

preferential projects” and so are entitled 

to several important incentives: exemption 

and reduction of land rental and land levies, 

favorable state loans and tax incentives (eg, 

import duty exemption for, say, machinery 

imported to create the project’s fixed 

assets). 

SWPP. The owner of an approved SWPP 

can commence construction of its plant only 

after it has obtained a construction permit. 

This requirement applies to most power 

projects, and not just to SWPPs. 

***** 

Currently, household waste, commercial and 

industrial and hospital wastes are collected 

and transported by non-profit entities 


Projects and Energy 

owned by the state or by commercial 

companies. The current treatment of solid 

waste is mostly to recycle it or to discharge 

it into open garbage dumps. 

However, the volume of solid waste has 

increased in both big cities and industrial 

zones. As a result, garbage dumps have 

become overloaded and the current 

practice has become inappropriate. 

There are serious environmental issues 

to consider (eg, negative impact on 

underground or surface water, spread of 

disease, unsustainable usage of land, etc.). 

is faster, it does not require a substantial 

amount of land, and the operating costs 

are not significant. 

More importantly, waste can be managed 

and treated on a sustainable basis and 

environmental issues can be managed. 

The Government is seeking technical 

and financial assistance and aid from 

government and non-government 

organizations. In parallel, the Government 

also encourages the private sector to 

develop SWPPs. Another option is the 

development of small scale SWPPs. 

Equity Driven Crowdfunding in Lebanon 

By Samantha Joyce Bradshaw 

The situation requires local authorities 

to find alternative solutions in order to 

mange and treat waste. Although the 

development of SWPPs is more expensive 

in comparison with other methods, there 

are positive factors: treatment of waste 

This seems to be practical and realistic. 

For the investor, a small scale plant does 

not require a large amount of investment 

capital. For the Government, it will help 

Vietnam to learn important technologies 

and to gain valuable experience. 

Crowdfunding, an alternative means of financing for individual projects 

and companies, has become an increasingly popular concept in recent years. 

It emerged in response to the financial crisis of 2007–08, but didn’t officially 

appear in Lebanon until 2013 with the launching of Zoomaal and has grown 

throughout the surrounding region. Fundamentally, financing through crowdfunding 

relies on a large number of relatively small investments from a variety 

of individuals often facilitated with internet based platforms. 

Nguyen Huu Hoai 

Partner at Russin & Vecchi 

T: +84 8 3824 3026 

Email: nhhoai@russinvecchi.com.vn 

Nguyen Huu Hoai is a Partner of Russin & Vecchi. He has practiced law for 20 years. His 

practice focuses mainly on M&A, corporate, project finance and taxation. He has assisted 

clients in complicated corporate-restructuring and tax matters. 

Crowdfunding can follow a few different 

models but all are based on the funders’ 

expectations of return being either financial 

or non-financial. Those providing the 

funding can donate based on a desire to 

help without financial expectations, give 

money in exchange for some benefit or 

reward, loan the money, or receive a loyalty 

interest or some sort of equity instrument, 

such as shares. 

Crowdfunding platforms, like Zoomaal, 

typically use some combination of these 

models to attract more investors. These 

platforms earn money through some 

combination of fixed upfront fees in 

exchange for listing a request for funds, 

contingency fees payable upon successful 

funding and other means. The Lebanese 

Capital Markets Authority (CMA) took 

measures to regulate the equity based 

crowdfunding model. 

In 2011, the CMA issued a decree regulating 

the formation and operation of companies 

offering crowdfunding through equity 

instruments in Lebanon as well as the 

procedures to request capital increases 

through these Lebanese crowdfunding 

companies. 


Mergers & Acquisitions 

Formation and Operation of Crowdfunding 

Company 

Decision no. 3 lays out the requirements 

and processes for any company, Lebanese 

or non-Lebanese, to operate a platform 

that facilitates the raising of funds by small 

and medium sized enterprises and startups 

through the sale of shares of equity to 

many individual investors (“Platform”) in 

Lebanon. 

First, a request to form a company that will 

offer the Platform must be submitted to 

the CMA along side a feasibility study that 

outlines the projected profits and losses, 

financial balance statements and cash flow 

for the upcoming three years. 

Once this approval is obtained, the 

company must be formed as a Lebanese 

joint stock company, otherwise known as a 

Société anonyme libanaise, with a minimum 

capital of 1,000,000,000 Lebanese Pounds, 

roughly equivalent to 666,666 United 

States Dollars, or as a registered branch of 

a foreign company with the same amount 

available to finance its operations. 

Thirdly, the Company cannot begin 

operating until it obtains a license to offer 

the Platform from the CMA by submitting 

a series of documents best summarized as 

a detailed business plan, risk management 

procedures and background checks for 

its directors and auditors among other 

documents. As outlined in the Decision no. 

3, the Company must submit 

(i) administrative documents proving 

successful registration at the commercial 

registry and that the minimum capital 

or required funds are available in a 

bank in Lebanon, as well as a list of the 

Company’s authorized signatories and 

directors, 

(ii) internal regulations concerning the 

job description of employees, any user 

manual(s) or code(s) of conduct, and the 

procedures in place to protect investors 

from fraud, prevent money laundering, 

subscribe to shares, protect personal 

information and professional secrecy, 

accept electronic signatures, and 

(iii) technical precautions taken to 

make the platform effective and safe 

such as antispam, antivirus, firewalls, 

log in access restrictions, authentication 

procedures, etc… 

Once the CMA is satisfied that the Company 

has fulfilled all the conditions above, it 

issues a license to operate the Platform that 

must be used within 6 months of issuance 

or it becomes void. 

In operating the Company, the Company is 

required to have an electronic platform to 

connect the companies seeking investment 

with potential investors and an interest 

bearing escrow account at a bank operating 

in Lebanon for each crowdfunding 

transaction with release to either the 

company seeking investors upon reaching 

the stated funding goal or to the investor, 

with interest, if funding goals are not 

reached within 180 days. 

Finally, the Company should cooperate with 

the CMA by facilitating CMA supervision, 

sending periodic reports and annual 

financial reports to the CMA and clarifying 

that the CMA takes no responsibility related 

to the information on the Platform. 

Specifically the Company cannot give advice 

to any investor or company nor display 

anything other than shares on the Platform, 

restricting the Platform to only the equity 

based model of crowdfunding. 

Capital Increases through 

Crowdfunding 

In order for any company to request 

funds through a Platform operating out of 

Lebanon, the Company must receive the 

former’s commercial registry certificate, 

statues, financial reports, a feasibility study 

and a list of all directors, general manager 

and shareholders signed by the Chairman. 

This means that only already existing 

entities can raise funds by offering shares 

on the Platform. 

Each attempt to raise funds must be at 

least 30,000,000 Lebanese Pounds, roughly 

equivalent to $20,000, and each investor’s 

direct and indirect investment must be 

between 750,000 LBP and 15,000,000 LBP, 

roughly equivalent to $500 and $10,000. 

Samantha Joyce Bradshaw 

Senior Foreign Counsel at Aziz Torbey Law Firm 

T: +961 1 422466 

Email: sbradshaw@torbeylaw.com 

Furthermore the Company should ensure 

that the company requesting funds submits 

a term sheet to the investor consisting of: 

Capital of Company to be crowdfunded, 

Conditions for investment, summary on 

risks that the Investors might encounter, 

relation with Organization and CMA and 

that the company executes a contract 

detailing subscription conditions with 

the investor governed by the Lebanese 

Commercial Law. 

Crowdfunding presents a unique model 

to test out ideas and venture before 

expending the capital to put them into the 

market, while allowing more individuals to 

invest. As crowdfunding continues to grow 

as an alternative finance method, we can 

expect regulations to increase with it. 

Samantha focuses her practice on corporate, M&A, technology and intellectual property 

matters. She is a member of the Virginia State Bar and awaiting her oath ceremony to join 

the United States Virgin Islands Bar. She obtained her Juris Doctor from Charlotte School 

of Law (2012). 



Common Terms in Pharmaceutical 

Trademarks 

By Marietta Flores Oyola, 

Kelly Sánchez Albitres 

It is usual that pharmaceutical trademarks contain commonly used terms, so 

they are formed by the combination of elements such as prefixes, suffixes or 

commonly used words that evoke somehow an idea about the properties of the 

product, its active principles, and its therapeutic function. They also may refer 

to a component of the medicine or the organ for which they are prescribed. 

Terms are considered commonly used for two 

reasons: either for being part of the several 

marks or for being evocative of the product or 

any of its features. By common usage anyone 

is free to include them in a mark, provided 

that it is not confused with other marks of 

other owners. 

For example, a prefix commonly used in 

Class 5 is the prefix CORTI that evoke the 

active substance corticosteroid or the word 

“cortisone”. The prefix CORTI is present 

in the formation of numerous registered 

trademarks owned by different owners, such 

as: CORTIFLEX, CORTIDERM 10, CORTIMED, 

CORTICREM, CORTIFENOL 1 , etc. 

1 Trademarks mentioned in Resolution No. 0107-2010/ 

TPI-INDECOPI dated January 13, 2010. 

The Court of Justice of the Andean 

Community has established in a precedent 

that the prefixes, suffixes, roots or endings 

commonly used in the marks cannot be 

subject to monopoly or exclusive use of a 

single person since they are usual words 

which its use by the general public can’t 

be prohibited. 

Usually it is argued that because the signs 

identify products that directly affect health 

and have consequences on the human body, 

the consumer will have a higher level of 

attention and special care when purchasing 

the pharmaceutical products. 

This has been recognized in diverse 

jurisprudence of INDECOPI where stated that 

“in the case of pharmaceuticals referred to the 

signs in question, it is reasonable to assume that 

the consumer, when purchasing such products, 

would make a close examination based on 

their needs” 2 . 

However this is not enough to dismiss the risk 

of confusion because in the pharmaceutical 

trademarks that share commonly used terms, 

whose names could prove to be very similar, 

the consumers themselves might be induced 

to confusion, i.e., it may acquire a product in 

the belief that it is purchasing another, which 

is known as direct confusion or might think 

that the product has a distinct commercial 

origin than the real one, what is called 

indirect confusion. 

The Court of Justice of the Andean 

Community in the Process 08-IP-2013 has 

noted that: 

“What comes to protecting, by avoiding 

trademark confusion, is the health of the 

consumer who for confusion when asking for 

a product and negligence of the dispatcher, 

he may receive one with similar phonetic but 

2 Resolution N° 0011-2009/TPI-INDECOPI from file N° 

341709-2008 

different composition and purpose. If the 

requested product is intended for flu treatment 

and the delivered one is for the amebatic 

treatment, the consequences for the consumer 

can be dire. 

We must consider that what has been 

dominating in our countries is the culture of the 

‘personal healing’, according to which a large 

number of patients self-medicate because they 

have heard about a product in advertisement 

or received an indication from a third person. It 

is not considered that every human body has a 

different reaction to the same drug, and the selfmedication 

can lead to misleading or confusion 

at the time of acquisition because the similarity 

between the two signs.” 

This approach has been reiterated in several 

sentences of the Andean Court, such as the 

Process 30-IP-2000, where is stated: 

“This Court is inclined to the thesis that when 

regarding pharmaceutical trademarks, the 

examination of confusing similarity should have 

a more exhaustive study and analysis, avoiding 

the registration of trademarks whose names has 

a close similarity to avoid precisely the consumer 

requests a product instead of another, which 

in certain circumstances can cause irreparable 

damage to human health, especially when in 

many establishments, even drugs of delicate use, 

are dispended without a prescription and only 

with just the advice of the pharmacist on duty”. 

Also in Process No. 68-IP-2001, the same 

rigorosity was followed for the comparison 

between signs in the examination of 

confusing similarity, concluding that: 

“In respect to pharmaceutical products, it is very 

important determine their nature, since some 

of them correspond to products of delicate 

application, which can cause irreparable 

damage to consumer health. Therefore, the 

recommendation in these cases is to apply, 

a rigorous approach in the analysis of the 



opposing marks that seeks to prevent any 

confusion in the consuming public because of 

the nature of the products identified with them.” 

These arguments are based on the fact 

that the average consumer is not usually a 

specialist in chemicals and pharmaceutical 

issues and the acquisition and use of these 

products will usually lack of a permanent 

professional assistance. 

The fact that the Specialized Chamber in 

Intellectual Property of INDECOPI considers 

that when dealing with pharmaceutical 

products, the consumer will take a decision 

following a careful consideration based on 

his/her needs, that is, that he or she will 

pay more attention when purchasing these 

products, doesn´t mean that there isn´t 

a possibility of confusion, even more if we 

put ourselves in the place of an average 

consumer, who doesn´t necessarily have 

knowledge of the components or properties 

of pharmaceutical products offered in the 

market, so he or she can easily fall into 

confusion when buying such products, in 

that sense, the consumer could buy in the 

drugstore a pharmaceutical product in 

the belief that he or she is buying another 

product, certainly because the phonetic 

similarities between the signs are so strong 

that lead to confusion and do not allow him/ 

her to differentiate a product from another. 

In this case, not only the consumer would fall 

into confusion but also the same pharmacist, 

who may be confused by dispensing one 

product for another, precisely because of the 

phonetic and / or visual similarities between 

the marks. 

An example of this is illustrated by the case of 

the application of the word mark “CORTIDEX”. 

This mark was applied by Inversiones Awl 

S.A.C. to distinguish pharmaceutical and 

veterinary products; etc. in Class 5 of the 

International Classification. Against this 

application, Laboratorios Chile S.A. files an 

opposition based on the ownership of the 

mark CORTIPREX that distinguishes products 

of class 5. In the opposition, Laboratorios 

Chile S.A. indicates that from the graphic 

and phonetic point of view, the marks are 

very similar because they share the word 

CORTI, and this term will be more easily 

remembered by the consumer public. 

The Commission of Distinctive Signs, by 

Resolution No. 1085-2009/CSD-INDECOPI, 

declared unfounded the opposition and 

consequently granted the registration of the 

mark applied, stating that from the graphic 

and phonetic point of view the signs have a 

different sequence of consonants (C-R-T-D-X / 

C-R-T-P-R-X), thus they also differ in their final 

syllables (DEX / PREX), which determines that 

said signs generate a different pronunciation 

and a different overall visual impression. 

It is noted that the fact that the signs share 

the particle CORTI, this is not decisive 

to establish some kind of similarity 

between them, since this particle is part 

of the conformation of various registered 

trademarks in class 5. 

By Resolution No. 0107-2010/TPI-INDECOPI, 

the Specialized Chamber in Intellectual 

Property confirms the first instance decision 

stating that “the initial particle CORTI present in 

the signs may refer to the term cortisone, which 

explains its frequent use in the conformation of 

registered marks in class 5 of the International 

Classification, as shown in the background 

Report. In this sense, it can hardly indicate a 

particular commercial origin”. 

From our point of view the marks CORTIDEX 

and CORTIPREX themselves are confusingly 

similar, because in addition to distinguish 

some of the same products, from a graphic 

and phonetic point of view, the marks are 

similar since they share the prefix CORTI, 

which significantly affects the appearance of 

the opposing marks, even more taking into 

account that they share the same ending (EX) 

and the same sequence of vowels (O-I-E), 

generating a sound and a visual impact 

very similar, so this could lead to consumer 

confusion. 

It is therefore very important that 

pharmaceutical trademarks have additional 

elements added to the common term, 

whether figurative or verbal, with sufficient 

distinctiveness to identify and distinguish 

the commercial origin of the product 

Marietta Flores Oyola 

Intellectual Property specialist at OMC Abogados & Consultores 

T: +511 628 1238 

Email: abogados2@omcabogados.com 

to avoid the risk of confusion, as also 

prevent the sign to become descriptive 

because that would make it not distinctive 

and therefore in consideration of the 

prohibition of registration of the Article 

135 subparagraph e) of Decision 486 from 

the Andean Community which would make 

impossible their protection, but mainly 

because we must safeguard the health and 

life of the consumers, fundamental rights 

that are superior to any intellectual property 

registration. 

Marietta Flores is a graduate lawyer. She has experience in International Law, 

Administrative Law and Intellectual Property Law. During the last time her labour has 

been focused in the field of Trademarks and Patents. 

In the Peruvian Law firm OMC Abogados & Consultores she is in charge of the preparation 

of the Trademark and Patent applications that will be submitted before the National 

Institute for the Defense of Competition and Intellectual Property – INDECOPI, writing 

Legal Reports, retrievals, procedures before the embassies and the judiciary. 

Kelly Sánchez Albitres 

Intellectual Property specialist at OMC Abogados & Consultores 

T: +511 628 1238 

Email: abogados6@omcabogados.com 

Kelly Sanchez is a graduate lawyer, specialist in Intellectual Property Law. She works in the 

IP department of the Peruvian Law firm OMC Abogados & Consultores. 

Currently, her function is to prepare the Trademark and Patent applications that will be 

submitted before the National Institute for the Defense of Competition and Intellectual 

Property – INDECOPI, writing Legal Reports, retrievals, procedures before the embassies 

and the judiciary. 



Clinical Trial Tragedy in France – Implications 

for trial sponsors and CROs 

By Adrian Toutoungi, 

Nadia Gracias 

which the Clinical Trials Directive has been 

implemented into national law, leading to 

a lack of complete harmonisation across 

the EU. In order to improve the degree of 

harmonisation and reduce the administrative 

burden involved in organising cross-border 

trials in the EU, Regulation (EU) 536/2014 was 

adopted on 27 May 2014, repealing the Clinical 

Trials Directive (the “Clinical Trials Regulation”). 

It entered into force on 16 June 2014, but will 

take effect no earlier than 28 May 2016. So 

these upcoming changes did not apply at the 

time of the Bial trial, which took place under 

the regime of the Clinical Trials Directive. 

Phase 1 clinical trials: “first 

in man” 

pharmacokinetics 1 and pharmacodynamics 2 

of a drug. These clinical trial clinics are often 

run by contract research organisations 

(“CROs”) who conduct these studies on behalf 

of pharmaceutical companies at a dedicated 

site where participants can be observed by 

full-time staff and receive 24-hour medical 

attention and oversight. 

Phase I trials also normally include doseranging 

studies, also called dose escalation 

studies to discover the dose at which a 

compound becomes too toxic to administer. 

The tested range of doses will usually be a 

fraction of the dose that caused harm in preclinical 

animal testing. Volunteers are typically 

paid an inconvenience fee for their time spent 

in the clinical trials clinic. 

Phase I trials, also known as “first in man 

trials”, are the first stage of testing in human 

subjects. Normally, a small group of 20–100 

healthy volunteers will be recruited. This 

phase is designed to assess the safety, toxicity, 

1 Pharmacokinetics is the branch of pharmacology concerned 

with the rate at which drugs are absorbed, distributed, 

metabolised and eliminated by the body (sometimes also 

described as what the body does to the drug). 

2 Pharmacodynamics is the branch of pharmacology that 

studies the effect and mode(s) of action of the drug upon the 

body. 

A clinical trial on healthy volunteers sponsored by 

Portuguese pharmaceutical company Bial came 

to an abrupt halt in early January 2016, when one 

of the trial participants was declared brain dead 

and five others were hospitalised soon after with 

organ failure and suspected brain damage. The 

trial drug, BIA–102474–101, was intended to target 

a range of diseases including pain relief. It was 

being tested in humans for the first time. 

French contract research organisation BioTrial 

(“CRO”) had been engaged by Bial (the “Sponsor”) 

to manage and host the trial at its Rennes trial 

centre, in France. The tragic outcome raises 

questions for organisations involved in sponsoring 

or conducting clinical trials, and is likely to lead 

to further reform of the clinical trials regulatory 

regime across the EU. 

The legal framework for clinical 

trials in the EU 

Clinical trials involving medicinal products for 

human use are governed in the EU by Directive 

2001/20/EC (the “Clinical Trials Directive”). This 

framework legislation provides for additional 

implementing directives and guidelines. It also 

provides that an application for a Clinical Trials 

Authorisation (“CTA”) must be made to the national 

Competent Authority of any member state in 

which a trial site will be located. In the absence 

of any objection from the national Competent 

Authority within 60 days, the CTA will be deemed 

to have been given. 

Additionally, approval for the trial protocol must 

be sought from a Research Ethics Committee 

before enrolment of any trial subjects can begin. 

Inevitably, there are variations in the way in 



The TGN1412 trial 

On day 5 of dosing this fifth cohort, serious 

Molinet to the local hospital describes more 

implications, strict reporting obligations 

The oversight and monitoring of Phase 1 clinical 

complications began to develop. Within a week, 

serious neurological symptoms (double vision, 

require sponsors to be informed by CROs/ 

trials was strengthened in 2007 following a 

volunteer 2508 (subsequently named as Mr. 

slurred speech, migraines) that had worsened 

principal investigators of serious adverse 

previous tragedy in the UK. Healthy volunteer 

Guillaume Molinet) tragically died and five other 

through that day. The French authorities have 

events within 24 hours (paragraph 29, 

research subjects suffered multiple organ failure 

volunteers from the fifth cohort had been left with 

criticised the decision not to suspend the 

Commission Communication 2001/C 172/01) 

during a first-in-man phase 1 clinical trial at the 

suspected brain injuries. 

trial immediately upon hospitalisation of a 

(the so-called “CT-3” Communication). Hence, 

private clinical trial research centre at Northwick 

previously healthy volunteer with neurological 

CROs tend to have robust measures in place 

Park Hospital in in 2006. The trial drug, code- 

The only volunteers in the fifth cohort to escape 

symptoms, after ingesting a high dose of a 

that are triggered as soon as an SAE occurs. 

named TGN1412, was being developed for the 

unscathed were the two control subjects who 

previously untested drug that was known 

This is evidenced by the fact that within hours 

treatment of rheumatoid arthritis, leukaemia and 

had been administered a placebo. Various French 

according to the protocol to interact with the 

of the first volunteer slipping into a coma on 

multiple sclerosis. It was administered by injection 

authorities launched formal investigations which 

central nervous system. 

day 6, Bial and the CRO had agreed to halt 

over a period of minutes, rather than as an 

are currently underway, including the General 

the trial. However, the sponsor also has an 

infusion over several hours. 

Inspectorate of Social Affairs (“IGAS”), the ANSM 

Failure to provide appropriate medical care 

obligation to notify the national Competent 

and the Ministry of Justice. The final reports are 

Authority of any suspected, unexpected, 

Following the very serious adverse reactions, the 

not yet available. However, interim reports have 

The second volunteer of the fifth cohort 

serious adverse reaction (“SUSAR”). 

UK Secretary of State for Health convened an 

been released, which have identified procedural 

started to complain of similar symptoms 

Expert Scientific Group under the chairmanship 

and clinical issues and which shed light on 

on the afternoon of day 6. By this time, Mr 

Where the SUSAR is fatal or life-threating, this 

of Professor Gordon W. Duff to investigate and 

regulatory changes which are likely to follow in 

Molinet had suffered a stroke and lapsed into 

must be reported “as soon as possible” and in 

report back with recommendations. The final 

France and across the EU. 

a coma. Nevertheless, the second volunteer 

any event within 7 days after the sponsor is 

report of the Expert Scientific group in December 

2006 influenced the provision of guidance in July 

2007 by the Committee for Medicinal Products for 

Human Use (“CHMP”) of the European Medicines 

Key findings – procedural 

issues 

was also only given a paracetamol by the CRO’s 

doctor. On the morning of day 7, Mr Molinet 

tragically was declared brain dead and the 

second volunteer awoke with black eyelids. 

made aware of the case. (paragraph 94, CT- 

3). Bial eventually notified the ANSM on day 

9, four days after the hospitalisation of Mr 

Molinet. The French authorities are concerned 

Agency on first-in-human clinical trials (the “EMA 

Delayed trial suspension 

Nevertheless, the second volunteer was only 

that this did not comply with the obligation 

Guidance”). 

offered another paracetamol and an ice pack 

to notify “as soon as possible”, even though 

The Bial Trial 

Mr Molinet had reported a headache within an 

hour of being dosed at 8am on day 5 of the study 

(10 January), and developed significantly slurred 

by the CRO’s doctor. 

It was only on day 8, when the second 

it was within the seven day longstop. They 

categorised the delay as a “major failure in the 

CRO’s crisis management”. 

The trial began on 9 July 2015. A CTA application 

speech and double vision by that afternoon. The 

volunteer collapsed from dizziness, that he 

had been filed with the French Competent 

CRO’s doctor examined him at 3pm, but only 

was finally hospitalised. The principles of 

Failure to obtain informed consent 

Authority, the French National Agency for 

prescribed a paracetamol. It was not until the 

Good Clinical Practice require the Sponsor and 

Medicines and Health Products Safety (“ANSM”), 

CRO’s staff were challenged by other volunteers 

CRO to ensure that all volunteers who had 

The Bial informed consent form (“ICF”) 

and had received deemed approval. Ethics 

concerned by the continuing deterioration in 

taken the drug received appropriate medical 

presented to every volunteer for signature 

Committee (“EC”) approval for the trial protocol 

his condition, that he was referred to the local 

attention and follow-up to ensure their safety. 

promised: “You will be informed about any new 

has also been obtained. 

hospital at 8.30pm, where he was admitted as an 

The French authorities are concerned that this 

significant information that could affect your 

inpatient. 

did not happen, perhaps due to a systemic 

willingness to continue the trial“. The remaining 

The protocol provided for a dose-ranging study in 

reluctance on the part of the CRO or Sponsor 

volunteers in cohort 5 were not formally 

128 healthy volunteers aged 18—55 years, who 

Notwithstanding this SAE, the CRO proceeded to 

to acknowledge an emerging pattern. 

informed of Mr Molinet’s hospitalisation when 

were each to be paid €1900. After some single 

administer another dose of the trial drug to the 

it happened on day 5, so were never given 

ascending dose studies, four cohorts of volunteers 

remaining volunteers at 8am on day 6, without 

Delay in reporting serious adverse event 

the opportunity to review their continued 

were allocated to multiple ascending dose studies 

first checking with the hospital on the status of Mr 

participation in the study before the next 

(at 2.5mg, 5mg, 10mg and 20mg). These passed 

Molinet. Curiously, although the CRO maintains 

The hospitalisation of Mr. Molinet occurred 

does of the trial drug was administered at 

by uneventfully, with no serious adverse events 

that Mr Molinet had been hospitalised “at the 

on day 6 of the trial, and clearly amounted 

8am on day 6. While the CRO/Bial were in 

(“SAE”) being reported to the French authorities. 

first sign of light symptoms” and that the feedback 

to a serious adverse events as defined in 

compliance with EU regulations, they appear 

A fifth cohort (made up of eight volunteers) was 

received from the hospital the previous night 

the Clinical Trials Directive. Due to safety 

to have chosen to ignore the standard set by 

allocated to receive the highest dose (50mg), 

had been “re-assuring”, in complete contrast, the 

administered once daily. 

letter from the CRO’s onsite doctor referring Mr 



their own ICF when deciding not to inform the 

rest of the group regarding the hospitalisation 

of a participant, before administering them 

with additional doses. This raises serious ethical 

concerns. 

Key findings – clinical issues 

The French authorities have also made various 

preliminary criticisms about clinical issues, 

including: 

the volunteer screening (exclusion) criteria did not 

include a neuro-psychological assessment, even 

though the trial drug targeted the central nervous 

system; 

the Sponsor’s pre-clinical animal test data appears 

to have been insufficient to justify progression to a 

first-in-man study; 

• the dose escalation from 20 mg for the fourth 

cohort to 50 mg for the fifth cohort was “too 

sudden”. It is unclear whether the Sponsor 

presented sufficient pharmacokinetic data to 

justify this; and 

• the choice of 50 mg as the highest does in 

the dose ranging study was heavily criticised, 

which was up to 20 to 80 times higher than that 

needed for the therapeutic mechanism sought 

to be achieved. 

It is unclear why these points were not picked 

up by either the ANSM or the Research Ethics 

committee when evaluating the Sponsor’s CTA 

application. No doubt the full reports of the 

French Authorities, when they become available, 

will consider this further. 

It is interesting to note that the recommendation 

in the EMA Guidance as well as similar 2006 

recommendations of the French Medicines 

Agency (AFSSaPS) for allowing sufficient time 

gaps between dosing of healthy volunteers 

does not seem to have been followed. Dosing 

was planned to take place with just 10 minutes 

between subjects dosed on the same day. Bial 

has been criticised by French Authorities as well 

as in an editorial of the British Journal of Clinical 

Pharmacology 3 for not planning sufficient time 

gaps between dosing of patients. 

Regulatory response 

The ANSM has already ordered that certain 

precautionary measure should apply from 31 

March 2016 to all trials which it has authorised, 

including: 

Trial suspension and fresh authorisations. 

Upon the occurrence of new facts/developments 

in trials involving healthy volunteers, the trial must 

be suspended immediately and fresh approvals 

from authorities must be obtained before 

resuming the trial. 

• Immediate reporting. The timeline for 

expedited reporting by a sponsor of a SUSAR 

is shortened from “as soon as possible” to 

“immediately” reporting obligation to authorities 

(with the longstop of 7 days unchanged) 

• Additional global reporting requirement. 

Any SUSAR occurring in any other trial 

anywhere in the world on a related compound, 

including those conducted by an affiliate 

company of the sponsor, must be reported by 

the sponsor immediately to ANSM 

• Fresh informed consent: upon the occurrence 

of new facts/developments in trials involving 

healthy volunteers, written informed consent 

must be obtained afresh from every participant 

before administering further doses to them. 

OUTCOMES 

• While the trial was conducted in compliance 

with the letter of the law, it is clear that serious 

gaps are emerging from both a procedural and 

clinical viewpoint that require an urgent review 

of the clinical trials regime under both the 

3 Br J Clin Pharmacol (2016) 81 582—586. 

Clinical Trials Directive and the Clinical Trials 

Regulation. Changes to French law and 

guidance have already been announced, 

and any sponsors or CROs conducting trials 

at sites in France will need to implement 

these changes immediately. Moreover, 

the EMA has indicated that the findings of 

the French Authorities could trigger such 

a revision to EU-wide guidance from the 

EMA on first-in-man trials. Revisions to 

the EMA guidance are likely to have global 

ramifications, as most jurisdictions seek 

to harmonise trial standards under the 

Adrian Toutoungi 

Partner at Eversheds 

T: +44 (0) 122 344 3831 

Email: adriantoutoungi@eversheds.com 

Nadia Gracias 

Solicitor at Eversheds 

T: +44 (0) 122 344 3816 

Email: nadiagracias@eversheds.com 

influence of the International Conference on 

Harmonisation of Technical Requirements 

for the Registration of Pharmaceuticals for 

Human Use (“ICH”). If the ANSM measures 

are indicative of this potential EU wide 

reform, changes can be expected in the 

areas of robustness of pharmacokinetic 

data, safety measures, screening criteria, 

reporting and participant consent for phase 

1 trials in particular, but possibly for all trials 

as well. 

Adrian is a Partner in Eversheds’ life sciences group. He has extensive experience of all 

aspects of Intellectual Property and also advises on medicinal product and medical device 

regulatory law. He is regularly involved in the negotiation and drafting of patent licensing 

agreements and other contracts with an IP element in the Life Science sector, such as drug 

discovery/development collaborations, joint ventures, co-promotion and co-marketing 

agreements and other commercial arrangements such as device/drug toll manufacturing, 

distribution agreements and QP/RP consultancy agreements. 

Nadia is a dual qualified lawyer, as a Solicitor in England and an Advocate in India. Nadia 

holds a degree in international commercial law from the University of Cambridge. She 

has received several prestigious scholarships, including as an incoming scholar with the 

Inner Temple, London and a clerkship with the Supreme Court of India. Her life sciences 

industry knowledge was gained in-house with a global CRO. She has extensive experience 

advising on clinical trial regulations, agreements and related contractual documents 

pertaining to all phases of trials conducted across EMEA and APAC. Her current practice 

spans all areas of IP with a focus on life sciences and technology. 


Anti-trust/Competition Company Formations Law 

Incorporation of Chilean Companies 

By Alberto Pulido, 

María Fernanda Peters 

The most common way to materialize an investment by a foreign company in Chile, 

is through a local subsidiary (legal entity) created especially for such purpose. Hereby, 

we will summarize which are the type of entities most frequently used as an investment 

vehicle in Chile, the procedure for their incorporation, the differences among each other, 

and other matters that should be considered at the moment of deciding to incorporate a 

legal entity Chile. 

The legal entities most commonly used as 

an investment vehicle in Chile are: (i) Limited 

Liability Partnerships (hereinafter “LLC”); 

(ii) Stock Corporations (hereinafter “SC”) 

and (iii) Companies per Shares (hereinafter 

“SpA”). This last kind of entity was created 

as a simplify form of SC, it is regulated in 

the Commerce Code, and it gives to its 

shareholders broad faculties to set their 

by-laws (management system, dividend 

distribution, etc), however, all matters 

not otherwise regulated in the provisions 

applicable to the SpA, or in their by-laws, will 

be subject to the regulations applicable to the 

SC. 

As a general note, the basic differences 

and similarities between the entities above 

mentioned, are the following: 

(i) Management: the SC is managed by a 

board of directors. The LLC and SpA have a 

very flexible management structure (a board 

of directors is not required as in case of the 

SC), they can be administrated for example by 

a managing partner/shareholder; 

(ii) Number of partners or shareholders: 

the LLC and SC must have at least two 

partners or shareholders (both of them may 

be foreigners), the SpA can have just one 

shareholder who may also be a foreigner; 

(iii) Amendment of the by-laws: the bylaws 

of the LLC can be amended through a 

public deed executed by all its partners. The 

amendment to the by-laws of the SC and 

SpA has to be approved by an extraordinary 

shareholders meeting, in case of the SC, such 

shareholders meeting shall be always held in 

the presence of a notary public. 

It is important to note that in the SpA or SC 

the majority rule is applicable, on the other 

hand in the LLC the unanimously of the 

partners is required. The amendment of the 

by-laws of the SpA can also be approved by 

the execution of a public deed by its partners; 

(iv) Capital for incorporation: no minimum 

capital is required for the incorporation of 

either of these types of entities. Moreover, 

in the SpA and SC, the capital is divided 

into shares, and the owners of the shares 

are “shareholders”. In the LLC, the capital is 

divided into equity rights and the owners of 

the equity rights are “partners”. 

This difference is due to the fact that the 

SpA and SC are capital based entities, while 

the LLC is based in the personal confidence 

between the partners. Thus, in case of the 

LLC, the identity of the partners is material 

and, as a result, the formalities for the 

transfer of equity rights will differ from the 

once required in the SpA or the SC; and 

(v) Transfer of shares and equity rights: the 

transfer of equity rights in the LLC implies an 

amendment of the by-laws of the Company, 

as it has to be approved by all the partners 

considering the identity of these is one of 

the principal elements of the LLC. Regarding 

the SC, in order that the transfer of shares 

be valid, it has to comply with one of the 

following formalities: 

(i) to be signed before a notary public; or (ii) 

that each party signs before two witnesses 

(who have to be duly singularized by their ID 

number). These witnesses can be the same if 

the assignor and assignee of the shares sign 

the relevant document in the same act. 

The transfer of shares in the SC does 

not require the approval of the other 

shareholders, neither an amendment of the 

by-laws. The transfer of shares of the SpA, will 

be subject to the same provisions applicable 

to the SC, unless something different has 

been specially provided in the SpA by-laws. 

In connection to the incorporation process, 

there are not many differences in the 

establishment procedure between the 

entities mentioned above. LLC, SC and SpA 

are incorporated by a public deed granted 

by the initial partners or shareholder(s). Such 

public deed shall contain the by-laws of the 

legal entity. 

A summary of this public deed must be duly 

authorized by a Notary Public, registered 

in the Registry of Commerce and published 

in the Official Gazette, within 60 days from 

the date of the public deed in case of the 

LLC and SC, and within 30 days in case of 

the SpA. In any case, in practical terms, the 


73


registration and publication may usually take 

10 business days from the granting of the 

relevant public deed. Amendment of by-laws 

of each of these entities shall follow the same 

proceeding than for its incorporation. 

Furthermore, it is important to bear in mind 

that, in order to incorporate a legal entity 

in Chile, the partners or shareholders must 

obtain a tax identification number or Rol 

Único Tributario (“Tax ID number”) granted 

by the Chilean Internal Revenue Service 

or Servicio de Impuestos Internos (“SII” or 

“Chilean IRS”). Pursuant to the regulation that 

entered into force on January 2015, the filing 

with the SII has to be completed with some 

additional information and documentation 

than before. 

In connection to the foregoing, the foreign 

entity shall appoint and maintain as 

representative in Chile, a person domiciled 

or with residence in Chile, with faculties 

to submit any relevant declaration and/or 

documentation before de SII and specially, 

to be served by the latter on its behalf. 

Likewise, this representative shall submit 

to the SII the information and documents 

before mentioned, which should contain the 

following information regarding the foreign 

entity: 

(a) name of the foreign entity; 

(b) Commercial name (in case this is different 

from the name indicated in letter (a)); 

(c) specify which kind of entity it is; 

(d) country, address and date of 

incorporation; 

(e) country of tax residence; and 

(f) indicate its tax identification number (and 

submit a copy of it). It will also be necessary 

to submit a good standing certificate of the 

foreign entity and to identify its partners or 

shareholders (name, date of birth, address, 

country, tax residence and ID number). 

This last information, regarding its partners 

or shareholders, will be required unless it is 

a public stock corporation, or is under one of 

the other situations that Chilean regulation 

exempts from submitting this information 

(pension funds, foreign governmental 

entities, etc). 

All the documents have to be submitted 

in original, duly translated to Spanish (if 

they were granted in a different language) 

and duly legalized. This Tax ID number is 

obtained immediately once all the relevant 

documentation is duly submitted to the 

Chilean IRS. 

Finally, in order for a Chilean entity be able to 

start its business activities, it must obtain a 

Tax ID number and give notice to the Chilean 

IRS that will start its business in Chile. The 

Tax ID number is obtained immediately once 

the relevant documentation is submitted 

to the Chilean IRS. Moreover, this number 

is usually required by third parties, and in 

case of banks it will be absolutely necessary 

before moving forward with the opening of a 

bank account. 

Furthermore, all Chilean companies must 

necessarily appoint and register, at the 

Chilean IRS, a duly authorized representative 

for service of process purposes, who must 

be Chilean or a foreigner with permanent 

residence in Chile. This representation 

implies to bear the responsibility over the 

accounting records of the Company in Chile 

for IRS and Tax compliance. 

As you may see from our brief explanation 

above, the procedure to incorporate a 

Chilean company is a very straightforward 

process, and is practically the same 

proceeding to incorporate a LLC, a SC or 

a SpA. Today, we consider that the most 

difficult point, in the incorporation of a 

Chilean entity, could be to obtain a tax payer 

number for the foreign entity that will hold 

participation in the Chilean entity. 

The foregoing, due to the regulation that 

entered into force in 2015, which required 

new information, for example regarding its 

shareholders or partners, if those are not 

under one of the situations that Chilean 

regulation exempts from this information, it 

Alberto Pulido 

will be necessary to submit details regarding 

all its partners or shareholders, even 

though if the company have hundreds of 

them, which could complicate the process. 

Notwithstanding this last point, in general 

terms, the incorporation of a Chilean entity is 

a simple and strait forward proceeding which 

can be done in a short period of time. 

Partner at Philippi Prietocarrizosa Ferrero DU & Uría 

T: +562 2364 3781 

Email: alberto.pulidoa@ppulegal.com 

Alberto Pulido is a lawyer at Philippi Prietocarrizosa Ferrero DU & Uria in the Santiago Office. He 

joined the firm in 1992 and was made partner in 2002. 

His legal practice focuses on Banking, Finance and Capital Markets, Corporate / M&A and 

Telecommunications. Alberto is one of the partners in charge of one of the groups of Corporate 

and M&A of PPU in chile. With over 20 years of experience, his main areas of practice are 

corporate law, mergers and acquisitions and financing. He is mainly engaged in corporate 

matters, the drafting and review of documents and contracts and ongoing advice to clients, both 

domestic and foreign. He has also participated in numerous transactions advising foreign clients 

in acquisitions and financing fro the respective projects as well as in the drafting and shareholder 

agreements deemed relevant. 

He has a Law Degree from Pontificia Universidad Catolica de Chile (1993) and a Master in Law 

(LLM) from the New York University (1996). He is profesor of Commercial Law in the Faculty of 

Economy and Administration at Universidad de Chile (2002 - 2005) and also Member of the 

Chilean Bar Association and the International Pacific Bar Association (IPBA), (2002 - 2003) 

María Fernanda Peters 

Associate at Philippi Prietocarrizosa Ferrero DU & Uría 

T: +562 2429 3844 

Email: MariaFernanda.Peters@ppulegal.com 

Maria Fernanda is dedicated to advise national and foreign clients on corporate matters, 

civil matters, mergers and acquisitions, and corporate restructuring transactions, among 

other matters. 


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