High Court Ruling Helps Protect Confidentiality of Arbitral Awards

Posted in Dispute Resolution

By Daniel Harrison

The High Court recently held that a party was not free to disclose an arbitral award even though that award had already entered the public domain. Notably, the ruling may have significant implications for parties considering whether or not to resolve disputes through arbitration.

Background: UMS Holdings Limited v Great Station Properties S.A.

UMS Holdings Limited challenged an arbitral award on the ground of serious irregularity under section 68 of the Arbitration Act 1996 before the High Court. Because the judge had quoted parts of the arbitral award in the judgment refusing the application,[1] UMS claimed that the award was a public document and that UMS could therefore use the award as it wished. The defendant, Great Station Properties, rejected this position and argued that the parties were still bound to keep the award confidential pursuant to Article 30 of the London Court of International Arbitration Rules (LCIA Rules), which provides: Continue Reading

Pharma and Biotech: Key Trends and Legal Risks

Posted in EU and Competition

By Hanna Roos, Oliver Browne and Robbie McLaren

How to thrive amid uncertainty? This was the question we explored at the 35th FT Global Pharmaceutical and Biotechnology Conference. Here are five key industry trends and corresponding practical legal tips to help companies stay protected and seize opportunities.

“Access”, Not “Excess”

The industry is facing pressure on pricing to expand access to crucial therapies in both developed and developing markets. Increasingly, regulators and legislators measure success not only by clinical breakthroughs, but also by how many patients end up receive a treatment. Regulators and legislators have begun to examine how pricing correlates with the cost of R&D, and the value that a treatment delivers. The UK Competition and Markets Authority’s recent £90 million fine for “excessive and unfair” pricing is an example of this increased scrutiny (for more information, please see our blog here). Such pressure has led to streamlined drug development and flexible pricing models linked, for example, to ability to pay. Regulators are adopting conditional approval mechanisms, which revisit therapeutic efficacy to ensure that drugs deliver “bang for the buck” before they are granted long-term marketing authorisation and/or purchase commitment. Continue Reading

China Strengthens Regulation of Pesticides and Creates Centralized Pesticide Bureau

Posted in Environment

By Paul Davies, Bridget Reineking, and Andrew Westgate

China, the world’s largest producer and consumer of pesticides, is strengthening its regulation of agrochemicals. The Ministry of Agriculture (MOA) recently issued revisions to the country’s pesticide registration requirements, which officially came into effect on November 1, 2017. Pesticide use in China accounts for over one-third of total world pesticide usage, so the new rules will affect a significant number of national and multinational entities and a large percentage of the country’s population.

The MOA issued the revisions pursuant to the new Regulation on Pesticide Administration (RPA) and Pesticide Registration Management Measures (MOA Order No. 3, 2017). The new rules, entitled “Data Requirements on Pesticide Registration” (MOA Proclamation No. 2569), require all pesticide chemistry and toxicology tests required under the RPA to be conducted by laboratories located in China, or overseas laboratories possessing a mutual recognition agreement with China. The new rules do not offer much granular detail with respect to how laboratories would obtain such recognition or the applicable requirements — for example, the rules do not indicate whether application data prepared in a foreign language must be translated into Chinese prior to submission. The revisions also follow the MOA’s recent elimination of temporary pesticide registrations, which effectively prolongs the timeline for the review and use of all pesticides in China. Continue Reading

Europe as a Hub for Initial Coin Offerings?

Posted in Emerging Companies and Technology, EU and Competition, Finance and Capital Markets

By James Inness and Stuart Davis

Initial coin offerings (ICOs) involve issuers offering virtual coins or tokens that are created and disseminated using blockchain or distributed ledger technology. Virtual coins resemble cash in a number of ways but may also afford holders additional rights, such as the ability to access the platform or software, or participate in the profits, of the issuer of the virtual coins or tokens. Post-issuance, virtual coins or tokens are tradeable on a secondary market.

Tokens as securities

The popularity of ICOs as a funding mechanism has mushroomed in 2017. In response, regulators in key financial centres around the globe have warned issuers that existing regulatory regimes for securities offerings may apply to the person(s) making or marketing ICOs. Some regulators have gone further, adopting a blanket ban on fundraising though ICOs. Continue Reading

European Parliament Calls for Tougher Environmental Liability Rules

Posted in Environment

By Paul Davies and Michael Green

The Environmental Liability Directive (ELD) aims to prevent, remedy and/or compensate for environmental damage. ELD seeks to achieve this through the “polluter pays principle”, ensuring businesses are held legally and financially accountable for environmental degradation that results from their operations. However, Member States have varied considerably in implementing ELD, significantly reducing its effectiveness. The European Parliament is the latest of several European authorities to review ELD’s effectiveness.

A report published by the European Parliament sets out the primary areas of concern with ELD, namely: (i) the lack of certainty surrounding key definitions; and (ii) narrowness of scope. For example, the European Parliament considers there is “total uncertainty” regarding the “significance threshold”. As the significance threshold determines whether an incident triggers liability under ELD, the European Parliament considers the clarity of the threshold crucial. Furthermore, ELD only imposes strict liability on operators that cause environmental damage in the course of activities specified in an exhaustive list. Beyond this list, liability for environmental damage is fault-based. Continue Reading

UK Supreme Court Redefines Criminal Dishonesty Test

Posted in Dispute Resolution

By Stuart Alford QC, Daniel Smith and Clare Nida

The UK Supreme Court has unanimously ruled that the criminal dishonesty test in R v Ghosh is wrong and that courts should no longer follow this test. The recent decision in Ivey v Genting Casinos clarifies that the test for dishonesty in all proceedings (criminal and civil) is objective, and to be determined by reference to the standard of ordinary, decent people, without reference to whether the defendant realised that ordinary people would regard his or her conduct as dishonest.

The Facts: Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67

The claimant, a professional gambler, used a technique called “edge sorting” during a game at the defendant’s casino, in which he and his associate represented to the dealer that he was superstitious, thereby persuading the dealer to turn the cards in a way which allowed the claimant to later identify those cards in later deals. The claimant won £7.7 million, but the defendant refused to pay out on the basis that the claimant was cheating. Continue Reading

Green Bonds Offer a Solution for China’s Green Finance Challenges

Posted in Environment, Finance and Capital Markets

By Paul Davies, Bridget Reineking, and Andrew Westgate

Since establishing the People’s Bank of China’s Green Finance Task Force in 2014, China has encouraged green financing mechanisms through a variety of pioneering initiatives. For example, the country has designated five green finance pilot zones, within which financial institutions are incentivised to provide credit and special funds for environmentally friendly industries.

However, investors have yet to take full advantage of these developments. The lack of uptake may in part relate to recommendations set out in the Green Task Force Final Report published in April 2015. In particular, recommendation 13 of the Report proposes imposing environmental lender liability on banks – the practical consequence of which is that banks and other financial institutions become liable for environmental pollution or damage caused by their borrowers. Although green projects are by nature less environmental risk-laden than other projects, they are not risk-free. As a result, investors have been hesitant to utilize the new financing mechanisms, and banks are equally hesitant to offer financing in the face of uncertain associated liabilities. Continue Reading

New Environmental Bureau to Regulate China’s Natural Resources

Posted in Environment

By Paul Davies, Bridget Reineking, and Andrew Westgate

President Xi has announced the creation of a new environmental bureau to oversee China’s state-owned natural resources. Establishment of the new bureau is one of the most notable outcomes of the recent meeting of the 19th National Congress of the Communist Party, and follows Xi’s pronouncement that building an “ecological civilization” in his country is necessary for the continued development of the Chinese people.

Currently, China’s natural resources are administered by a set of localized bureaus, which oversee natural resource assets without a centralized national monitor. Local governments are responsible for staffing and funding these bureaus, so economic agendas and industrial development have directed local environmental efforts for years. Frequently, local governments have stripped the protection bureaus of the ability to impose penalties or otherwise enforce environmental compliance measures. And even if the bureaus receive staff and funding, regional and local needs are generally at odds, often causing untimely and frustrating backlogs regarding the uses of resources and land. Without national coordination, even the best-intentioned regulators working for these bureaus have struggled to implement environmental policies. Continue Reading

Can Overseas Bidders Guard Against M&A Risks in An Increasingly Economically Nationalist Europe?

Posted in M&A and Private Equity

By Richard Butterwick, Jonathan Parker, Jana Dammann and Katie Campbell

Growing economic nationalism is threatening to impact M&A across Europe, as governments and regulators take an increasing interest in “foreign” acquisitions of nationally important companies. Deal teams have previously focused on established national security review regimes, including the Committee on Foreign Investment in the US (CFIUS) and the Foreign Investment Review Board in Australia. Now legislative changes in Germany, proposed changes and heightened government interest in the UK and recent statements from the European Commission (EC) indicate a more interventionist approach to acquisitions.

Germany Increases Powers to Scrutinise and Block Sensitive Deals

Recently implemented changes to the German Foreign Trade and Payments Ordinance (FTPO) regime allow the German government to scrutinise and block direct and indirect acquisitions by non-EU bidders of German companies active in security-sensitive areas. The affected industry sectors subject to potential review are broad and include energy, water, nutrition, information technology, healthcare, financial services and insurance, transport and traffic, and software. The changes will affect German inbound deals, which we anticipate will be subject to a greater number of investigations and a stricter approach from the regulator. Continue Reading