East & Concord Partners > Beijing, China > Firm Profile

East & Concord Partners
20/F LANDMARK BUILDING TOWER 1
8 DONGSANHUAN BEILU
CHAOYANG DISTRICT, BEIJING 100004
China

China > Regional coverage: Other notable firms in Beijing Tier 1

East & Concord Partners handles a wide mix of matters relating to financing, capital markets, M&A, international trade, data protection, intellectual property, insurance and disputes. Dorothy Xing specialises in banking and finance, capital markets and securities, and M&A transactions; Bin Xu focuses on the energy and natural resources sector, advising on cross-border investment; Philip Qiao is noted for international arbitration and bankruptcy matters;  Chaoyi Ji leads the dispute resolution team; Cindy Hu has key expertise in the healthcare and life sciences sector; and Gang Guan specialises in intellectual property disputes.

Practice head(s):

Testimonials

The team is flexible, and provides us with a full range of excellent legal services.’

Philip Qiao has professional legal literacy, and rich experience in litigation and arbitration.

Key clients

China Nonferrous Metal Mining (Group) Co., Ltd. SPD Silicon Valley Bank Co., Ltd.

The Coca-Cola Company

IBM

Honeywell

GE

DXC Lenovo Group

Tishman Speyer

Garrett Motion Inc.

China CITIC Bank

State Development and Investment Corporation China CITIC Bank

CITIC Trust

Huaxia Bank

SDIC Taikang Trust

China Pacific Insurance Group Co., Ltd.

Postal Savings Bank of China

China Zheshang Bank (CZBank)

AI Bank

TianAn Life

CITIC Wealth

Taikang Insurance Group

Kazakhstan Altyn Bank

PICC

SPD Silicon Valley Bank

China Construction Bank

Agricultural Bank of China

Work highlights

  • Acted for Tishman Speyer China Fund (Barbados) SRL, a subsidiary of Tishman Speyer, in an international arbitration concerning an equity transfer agreement dispute against ARA at the CIETAC.
  • Assisted China Nonferrous Metal Mining (Group) with its acquisition of Tibet Julong’s copper project.
  • Defending Jiangsu Yinneng Electric in a patent infringement case brought by Zhenjiang Siemens Electric.

China > Dispute resolution: Arbitration: PRC firms Tier 2

East & Concord Partners, which has developed in 2020 with the establishment of Chengdu and Nanjing offices, is best known for advising on disputes with an international aspect and counts globally recognisable companies from various industries in its client portfolio. The firm’s department is split into four groups, and has particular expertise in the finance, private equity investment, TMT, automobile and manufacturing sectors. Chaoyi Ji leads the dispute resolution department and acts as an arbitrator in CIETAC proceedings, as does managing partner Qi Zhou.

Practice head(s):

Chaoyi Ji

Other key lawyers:

Qi Zhou; Philip Qiao

Testimonials

‘The team is flexible and provides a full range of legal services for our company in many fields with high service efficiency.’

‘Philip Qiao has professional legal literacy and extensive experience in litigation and arbitration.’

Key clients

The Coca-Cola Company

IBM

Honeywell

GE

DXC

Lenovo Group

Tishman Speyer

Garrett Motion Inc.

China CITIC Bank

State Development and Investment Corporation

Work highlights

  • Represented Speyer China Fund (Barbados) SRL in an international arbitration concerning equity transfer agreement dispute in CIETAC.
  • Advised a group on clients on an international arbitration concerning equity transfer agreement dispute in CIETAC.
  • Advised Huayi Pharmaceutical Co., Ltd on an international arbitration concerning a sales contracts dispute.

China > WTO/international trade: PRC firms Tier 2

Under the leadership of Vivian Wang, East & Concord Partners is highly active in responding to anti-dumping and anti-subsidy investigations by foreign regulators, representing Chinese companies as well as industry representative groups. Wang is also experienced in safeguard and anti-circumvention investigations.

Practice head(s):

Vivian Wang

China > Banking and finance: PRC firms Tier 3

East & Concord Partners stands out for its expertise in banking regulation, with the team acting as advisors to banks and other financial institutions on compliance with PRC law. The team’s work in this area includes acting in growing areas of the Chinese market, such as fintech. Elsewhere, the practice advises lenders on transactions such as syndicated loans. Dorothy Xing serves as practice head and has experience in handling regulatory matters, capital market transactions, and investments. Jennifer Zhang is also active in regulation and provides assistance to banks, asset managers, and insurers.

Practice head(s):

Other key lawyers:

Jennifer Zhang

Key clients

China CITIC Bank

CITIC Trust

Huaxia Bank

SDIC Taikang Trust

China Pacific Insurance Group Co., Ltd.

Postal Savings Bank of China

China Zheshang Bank (CZBank)

AI Bank

TianAn Life

CITIC Wealth

New China Life Insurance Co., Ltd.

Industrial Bank

Ping An Bank

Taikang Insurance Group

SPD Silicon Valley Bank

China Construction Bank

Agricultural Bank of China

Kazakhstan Altyn Bank

PICC

China National Investment and Guaranty Corporation

Work highlights

  • Undertook the exclusive legal support for the thematic research project commissioned by CBA on corporate governance of Chinese banking industry.
  • Assisted China CITIC Bank London Branch with issuing a foreign currency interbank deposit (USD 2 billion) in 2020 and a USD 5 billion European medium-term note program in 2021.
  • Provided legal services for the governance structure and operational security of AI Bank.

China > Regional coverage: Zhejiang Province: Hangzhou Tier 3

East & Concord Partners is growing its presence in the Hangzhou market, where it focuses on domestic and cross-border corporate and M&A matters,  with the capability of also handling IP and commercial disputes. Peng Huang and Yanshan Li jointly lead the team, which welcomed Dan Hu who joined from Grandall Law Firm in June; Hu specialises in corporate and M&A, private equity and venture capital investments. Counsel Simeng Yan and Jinhua Yang are recommended for IP and criminal cases, respectively.

Practice head(s):

Other key lawyers:

Testimonials

East & Concord Partners has a flexible team that responds quickly and deeply understands the local market. It is a law firm that has emerged in Hangzhou in recent years.

Peng Huang is one of the few M&A lawyers in Hangzhou or even Zhejiang Province who has extensive international experience and can work fluently in English.

Key clients

Zhejiang Hengkang Pharmaceutical Co. Ltd. 浙江恒康药业股份有限公司

China Biotech Services Holdings Limited 中国生物科技服务控股有限公司

Grandshores Technology Group Limited 雄岸科技集团有限公司

Chinaleaf Capital Management, Co.,Ltd. 中叶资本管理有限公司

Shanghai Junzheng Logistics Co., Ltd. 上海君正物流有限公司

Zhejiang Energy Group Cp Ltd 浙江省能源集团有限公司

Shenzhen Jinyi Capital Investment Management Partnership (L.P.) 深圳金翼资本投资管理合伙企业(有限合伙)

Excellence Real Estate Group (Yuexi) Co., Ltd 卓越置业集团(粤西)有限公司

Shenzhen Petroglory Petroleum Group Co. Ltd. 深圳光汇石油集团股份有限公司

Hangzhou Nenggong Technology Company Ltd. 杭州能工科技有限公司

Zhejiang Borui Holdings Group Co., Ltd. 浙江博瑞控股集团有限公司

Zhejiang Shenghuadefeng Investment Co., Ltd. 浙江升华德沣投资有限公司

Hangzhou Chinaoly Technology Co., Ltd. 杭州中奥科技有限公司

SDIC JULI Investment Management Co., Ltd 国投聚力投资管理有限公司

Wuxi Huaguang Suss Semiconductor Equipment Co., Ltd. 无锡华光苏斯半导体设备有限责任公司

VeriFacts Automotive LLC

Dragon Bay Group Pty Ltd.

Chongqing Trueful Investment Co., Ltd. 重庆春风投资有限公司

Heymarket The Utopia Holdings Incorporation

Shanghai Xiangyou Industry Co., Ltd. 上海翔佑实业有限公司

Hangzhou Miguo Holding Group Co., Ltd. 杭州米果控股集团有限公司

Shipo (Shanghai) Trade Company Ltd. 狮珀(上海)贸易有限公司

Yebao Bicycles Inc. (Shenzhen) Co., Ltd. 野宝车料工业(深圳)有限公司

Work highlights

  • Represented Zhejiang Hanggang Financial Leasing in a guarantee insurance contract dispute against Jinhua Central Sub-branch of China Pacific Property Insurance.
  • Advised SDIC Juli Investment Management and Zhejiang Energy Group on their joint investment in Sinochem.
  • Assisted Grandshores Technology Group with its purchase of an Ordos blockchain target company through VIE structure.

China > Corporate and M&A: PRC firms Tier 4

The corporate and M&A department at East & Concord Partners is co-led by Bin Xu, an expert in inbound and outbound investments who is particularly active in the energy, natural resources, projects and infrastructure fields. Qixiao Cai fronts the offering alongside Xu, honing his focus on investment and company and securities laws matters while also working on restructuring, enterprise reformation, M&A and listing mandates. Other specialist sectors include automobiles, heavy machinery, food, drinks, clothing and finance in addition to media, publishing and entertainment.

Practice head(s):

Other key lawyers:

Key clients

China Nonferrous Metal Mining (Group) Co., Ltd.

SPD Silicon Valley Bank Co., Ltd.

Shanghai Zendai

Minerva Foods

Beijing Coking Chemical Plant

DMG Entertainment Media Co., Ltd.

Mr. Chen Yihong

Zhongnong Chemical Co., Ltd.

Work highlights

  • Provided legal due diligence services for China Nonferrous Metal Mining (Group) Co., Ltd.’s acquisition of Tibet Julong copper project.
  • Acted on the Shanghai Zendai restructuring project involving a series of transactions in which the debtor Shanghai Zendai Property Limited and its affiliated parties carry out the overall restructuring of seven debts with the remaining principal balance of more than US$400m owed to its creditors.
  • Entrusted by Minerva Foods to set up its entities for its business operation in China.

China > Dispute resolution: Litigation: PRC firms Tier 4

East & Concord Partners has a presence in Beijing, Chengdu, Hangzhou and Nanjing, allowing the firm to advise clients from across China on disputes relating to the insurance, TMT and banking sectors. Practice head Chaoyi Ji specialises in disputes that extend beyond the PRC region, having recently represented Nationsync in a Mareva injunction case before the High Court of Hong Kong. Managing partner Qi Zhou is another valued team member.

Practice head(s):

Chaoyi Ji

Other key lawyers:

Qi Zhou

Key clients

The Coca-Cola Company

IBM

GE

Honeywell

DXC

Lenovo Group

Tishman Speyer

Garrett Motion Inc.

China CITIC Bank

State Development and Investment Corporation

Work highlights

  • Advised Nationsync in a Mareva injunction case in the High Court of HK.
  • Represented Chengdu Chuanhong Jinsha Commercial Management Co.Ltd in a loan contract dispute.
  • Represented Bank of Hangzhou Co., Ltd Shanghai Branch in a loan contract dispute.

China > Intellectual property: PRC firms Tier 4

China > Restructuring and insolvency: PRC firms Tier 4

East & Concord Partners is active across the insolvency and restructuring space, and is involved in administrations, liquidations, and debt restructurings. Jian Li and Lixin Wu lead the team.

China > Life sciences and healthcare: PRC firms

East & Concord Partners is particularly experienced in the digital health, biotech and nursing home space.

The firm: The merger between the East Associates Law Firm and Concord & Partners in 2014 brought into being East & Concord Partners, one of the largest and most comprehensive law firms in China. Briefly, East Associates Law Firm and Concord & Partners were established in 1993 and 1995 respectively, are among the earliest established law firms in China and both have nationwide influence and reputation. It is headquartered in Beijing and has branches in Shanghai, Shenzhen, Wuhan, Hangzhou, Chengdu, Nanjing and Xi’an. The firm has nearly 400 professionals. In addition to experienced partners and consultants who have practiced law for more than 30 years, the firm comprises legal experts who have years of working experience in national ministries, courts, procuratorate, international arbitration institution and prestigious law firms. Most of its partners and attorneys have gained qualifications and hands-on experience in law schools and firms throughout Europe, the US, Australia, Japan, Singapore, Hong Kong and Taiwan.

Areas of practice: East & Concord is committed to providing professional legal assistance to its clients and with 20-plus years of experience has gained a leading position and earned clients’ trust and recognition and has been frequently recommended by well-known international legal media such as Chambers, The Legal 500 and IFLR1000 in the following practice areas: mergers and acquisitions, securities and capital markets, dispute resolution, criminal litigation, banking and finance, financial lease and commercial factoring, anti-dumping and countervailing, antitrust, intellectual property, foreign direct investment, overseas investment, entertainment and sports, infrastructure and project financing, real estate and construction, energy and natural resources.

Mergers and acquisitions: based on the client’s needs, the firm provides professional services including, but not limited to the following: direct investment or merger in a large variety of businesses, enterprise or company restructuring, equity acquisitions, transfer, corporate additional investments, asset and business acquisition and transfer, corporate division/merger, equity and debt financing, securities and capital markets; professional services that the firm provides mainly include: initial offering and listing of securities, establishment and sale of funds, issuance of corporate bonds and financial bonds and notes, listed companies’ reorganisation of major assets, listed companies’ re-financing.

Banking and finance: professional services that the firm provides in this field mainly involve: advising banks and other financial institutions on all types of domestic and international financing transactions, establishment and reorganisation of insurance companies, public or private funds,asset management companies, financial leasing companies/commercial factoring companies, advising on and assisting in designing structures of products or transactions for trust companies, public or private funds asset management companies and financial leasing/commercial factoring companies, due diligence on target projects, preparation of transaction documents, compliance and risk management for trust companies, insurance companies and public or private funds, various financial derivative products, margin trading, channel services for asset management and credit assets securitisation business, internet finance, P2P, and crowd-funding

Dispute resolution: in the field of commercial arbitration, the firm handles domestic and foreign cases related to: disputes regarding sales contracts, contract disputes regarding foreign investments, disputes regarding real estate development contracts.

Intellectual property: investment in patent and know-how, transfer and trading of patent licensing rights and know-how, investigation and administrative actions against infringements, patent review and dispute resolution regarding invalid patent claims, patent litigation, application for trade marks, contribution in trade marks, licence and transfer commercial licence and trade mark interest arrangement in franchise, administrative objection of trade mark dispute, civil and administrative litigation of trade mark dispute, trademark inquiries and trademark surveillance, customs administrative protection of trade mark rights.

DepartmentNameEmailTelephone
Mergers and acquisitions
Securities and capital markets
Dispute resolution
Criminal litigation
Banking and finance
Financial lease and commercial factoring
Anti-dumping and countervailing
Antitrust
Intellectual property
Foreign direct investment
Overseas investment
Entertainment and sports
Infrastructure and project financing
Real estate and construction
Energy and natural resources
Retail business and logistics industry
Information technology
Labour
Maritime affairs
Taxation
PhotoNamePositionProfile
Mr Chaoyi Ji photo Mr Chaoyi JiPartner
Mr Qi Zhou  photo Mr Qi Zhou Founding PartnerManaging Committee Director
Number of lawyers : 300+
at this office : 200+
Chinese
English
French
Japanese

CLIENT: In-house counsel
COMPANY/FIRM: China Resources Asset Management Limited
TESTIMONIAL: We are very satisfied with East & Concord’s legal service. They assist us to achieve what we expect for.

Latest Practice of Judicial Assistance and Judicial Review of Foreign-Related Arbitration in China

Judicial assistance and judicial review of foreign-related arbitration in China have made a breakthrough, creating a more diversified and friendly arbitration environment for domestic and foreign enterprises to conduct arbitration in Chinese mainland.

China International Commercial Court

The China International Commercial Court (CICC) is established by the Supreme People’s Court of China (SPC) to adjudicate international commercial cases. CICC’s objective is to try international commercial cases fairly and timely in accordance with the law, protect the lawful rights and interests of the Chinese and foreign parties equally, and create a stable, fair, transparent, and convenient rule of law international business environment. The First International Commercial Court is situated in Shenzhen, Guangdong Province, and the Second International Commercial Court in Xi’an, Shaanxi Province. The Fourth Civil Division of SPC is responsible for coordinating and guiding the two international commercial courts. CICC is a permanent adjudication organ established by SPC. Cases tried by CICC shall be heard by a collegial panel consisting of three or more judges. CICC practices the “First Instance being Final”. The judgments and rulings made by CICC are final.

According to the current system of jurisdiction by level on judicial review of arbitration, judicial assistance and judicial review of foreign-related arbitration shall be adjudicated by the intermediate people’s court, and at the same time the “three-level reporting system” shall be implemented.

One of the highlights of CICC is that they can directly provide judicial assistance to and conduct judicial review of specific types of foreign-related arbitration, breaking through the current system of jurisdiction by level on judicial assistance and judicial review of arbitration. Specifically, the parties of specific types of arbitration cases are allowed to directly apply to CICC for preservation measures in arbitration, for setting aside or enforcement of international commercial arbitration awards.

According to Article 11 and Article 14 of Provisions on Certain Issues Concerning the Establishment of International Commercial Court and Article 34 and Article 35 of Rules of Procedure of the International Commercial Court of the Supreme People’s Court (Pilot), the parties of arbitration case of the amount in dispute more than RMB 300 million (US$ [] million) or of other significant influences, if the arbitration is managed by or the arbitral award is made by the arbitration institutions that have been incorporated into the “One-Stop” Diversified Settlement Mechanism for International Commercial Disputes, can directly apply to CICC for judicial assistance to and conduct judicial review of the arbitration, i. e. apply to CICC for preservation measures in arbitration, for setting aside or enforcement of the arbitral award. So far, the arbitration institutions incorporated into the “One-Stop” Diversified Settlement Mechanism for International Commercial Disputes include China International Economic and Trade Arbitration Commission, Shanghai International Economic and Trade Arbitration Commission, Shenzhen International Court of Arbitration, Beijing Arbitration Commission, China Maritime Arbitration Commission, Guangzhou Arbitration Commission, Shanghai Arbitration Commission, Xiamen Arbitration Commission, Hainan International Court of Arbitration (Hainan Arbitration Commission), Hong Kong International Arbitration Centre.

While maintaining the stability of the current judicial assistance and judicial review system of foreign-related arbitration, CICC has paved a special approach which is expected to provide efficiency and convenience to the parties.

Breakthrough of International Arbitration Institutions in China

International arbitration institutions from overseas have experienced an “ice-breaking journey” in managing arbitration cases in Chinese mainland. Article 16 of the Arbitration Law takes the “selected arbitration commission” as one of the essential elements of a valid arbitration agreement, while an arbitration institution established overseas is not an “arbitration commission” in the legislative context of the Arbitration Law, which leads to the risk of invalidation of the arbitration clause that arbitration by an overseas arbitration institution while the place of arbitration is in China.

In the Longlide Case, the arbitration agreement stipulates that the dispute shall be submitted to ICC Court of Arbitration for arbitration in Shanghai, China. The Supreme People’s Court issued a reply, arguing that the arbitration agreement has selected a specific arbitration institution, which meets the requirements of Article 16 of the Arbitration Law on valid arbitration agreements and should be determined valid. However, in the Shenhua Coal Case, the Supreme People’s Court held an opinion in its reply that the “arbitration commissions” in Article 20 of the Arbitration Law only refers to arbitration institutions established in China according to the P.R.C law, excluding overseas arbitration institutions. The two replies in the same period seem to have made diametrically opposite determinations, making it easy to cause misunderstanding.

In fact, many detours are because Chinese legal practice pays too much attention to “arbitration institution” instead of “seat of arbitration” and takes “location of arbitration institution” as the standard for judging the nationality of an arbitral award. The breakthrough of this problem is reflected in two recent milestone cases.

In the Daesung Case, the arbitration clause stipulates that the dispute shall be submitted to Singapore International Arbitration Centre (SIAC) for arbitration in Shanghai. Regarding the dispute over the validity of the arbitration agreement, Shanghai First Intermediate People’s Court decided: “the arbitration agreement concerned has the intention of requesting arbitration, stipulates arbitration matters, and selects a specific arbitration institution – SIAC, and therefore should be recognized as valid.” Shanghai First Intermediate People’s Court further confirmed the opinions of the Supreme People’s Court in the reply of the Longlide Case, reflecting the stable judicial policy.

In the Brantwood Case, the arbitration agreement stipulates that the dispute shall be submitted to the ICC Arbitration Commission for arbitration at the project location (Guangzhou, China) according to international practice. After making the arbitral award, Brantwood applied to Guangzhou Intermediate People’s Court for recognition and enforcement of the arbitral award. Guangzhou Intermediate People’s Court made a civil ruling: “the arbitral award concerned is an arbitral award made by an overseas arbitration institution in Chinese mainland and can be deemed as a foreign-related arbitral award in China. If the Respondent failed to perform the arbitral award, Brantwood may apply to the Intermediate People’s Court of the place where the Respondent is domiciled or where its property is located for enforcement with reference to Article 273 of the Civil Procedure Law.” This is the first time that Chinese courts have made clear the nature of awards made within the territory of China by overseas arbitration institutions, which is of far-reaching significance. In this case, Guangzhou Intermediate People’s Court did not evade the problem of the nationality of the arbitral award, did not follow the old “standard of location of arbitration institution”, but, following the international rules, determined the nationality of the arbitral award according to the standard of the seat of arbitration and pointed out the enforcement basis under Chinese laws.

At present, the agreement for submitting disputes to an overseas arbitration institution for arbitration managed in Chinese mainland has been recognized by Chinese laws. However, whether the parties can and how to apply for judicial assistance and judicial review remains to be answered by legislation or trial practice. The root of the problems is still the standard for determining the nationality of arbitral awards. We expect that when the Arbitration Law and the Civil Procedure Law are revised, the seat of arbitration will be clearly taken as the standard for determining the nationality of arbitral awards, thus facilitating the arbitration activities managed by overseas arbitration institutions to be fully compatible with and supported by China’s arbitration procedure laws.


Mr. Chaoyi Ji
the managing partner and head of the Dispute Resolution team at East & Concord Partners

How to ascertain business opportunities of the company in the lawsuits against its directors or senior management stealing business opportunities

Business opportunities are paramount to a company, but from sometimes directors or senior management of a company take advantage of their positions to seek business opportunities rightfully belonging to the company, causing the company to suffer losses.

Article 148 of the Company Law provides that: no director or senior management member of a company may commit any of the following acts: … (5) without consent of the shareholder’s meeting or shareholder’s general meeting, seeking business opportunities belonging to the company for himself or any other persons by taking advantages of his powers, or operating similar businesses to those of the company.

However, because the law does not define the meaning of business opportunities that belong to a company, the scale of judgement may be inconsistent in different cases. When determining whether an opportunity should be attributed to the company, some courts consider various factors including business relevance, certainty of the opportunity, willingness of both parties and the company’s financial ability, while other courts may focus on a single factor. We have successfully handled many disputes in this kind. Based on our practical experience, we believe the following four points are the most important ones to be considered when to ascertain business opportunities of a company.

First, relevance to the company’s business, and that the company’s pursuit of such opportunity does not violate relevant laws and regulations.

We should not judge the relevance of business opportunities solely based on the business scope on the registration files. Rather, we should comprehensively consider the industry, business field, business policies and plans, development strategies, actual business activities, and other factors. Even if a certain business opportunity exceeds the company’s registered business scope, if it is compatible with the company’s business policy and plans, and the business activity does not violate any relevant laws or regulations, the business opportunity can still be determined as relevant to the company’s business.

Second, the business opportunity should be clear and specific, with evidence that the company has attempted to seek it.

The so-called clear and specific business opportunity refers to the possibility of achieving a certain transaction goal, and the company taking a series of actions to make the business opportunity manifest. In the process of argumentation, we should focus on whether there is a clear transaction opportunity, whether there is a specific counterparty to the transaction, and whether the transaction negotiation process is close to the conclusion of a contract. The so-called company’s willingness to seek business opportunities mainly refers to the company’s potential expected benefits for the business opportunity, in other words, the company reasonably expects to obtain the opportunity in accordance with its business policy and plans, the company hopes to obtain corresponding economic benefits through this opportunity, or this opportunity plays an indispensable role in promoting the company’s development, and the company has not rejected or abandoned the opportunity.

Third, the willingness of the counterparty.

Whether the counterparty of the transaction expressly expresses its intention to conduct transactions with the company is another important factor in determining whether the business opportunity should be deemed as belonging to the company. When the company’s directors and senior management negotiate with the counterparty to a certain extent, if the counterparty clearly expresses its willingness to transact with the company or sends a draft agreement, the business opportunity rightfully belongs to the company. If the counterparty of the transaction expresses its unwillingness to deal with the company not due to any improper behavior of the company’s directors or senior management, we should remain cautious in determining whether the business opportunity can be recognized as still belonging to the company.

Fourth, whether the directors and senior management become aware of the business opportunity in the process of performing their duties, and whether they have used the company’s human and material resources to obtain it.

If the directors and senior management learn of a business opportunity due to personal relationships without using any company resources, and the company has no reasonable expectations for the benefits, the business opportunity should not be deemed to belong to the company. Whether transaction opportunities obtained by directors and senior management before taking office or after leaving office can be recognized as business opportunities of the company, it is a much more complicated scenario involving many factors to be taken into consideration.

We noticed that in certain cases, some courts use the company’s financial resources as one of the criteria in determining the company’s business opportunities. We find this is inappropriate. Indebted operation and high debt ratio may be normal status in certain industries. Financial pressure of a company should not be the ground to deprive it of business opportunities. Some other courts make the judgment based on whether the company has made internal resolutions on business opportunities. We think this is also inappropriate. Business opportunities come in various financial sizes, and not all of them require resolutions of the shareholder’s meeting or shareholder’s general meeting or the board of directors. Even if resolutions are needed, it should be examined whether the transaction has progressed to the stage of requiring corporate resolution. The court should not take corporate resolution as a prerequisite in determining the existence of company’s business opportunities.

Judicial courts have not reached a consensus on how to ascertain the boundary of company’s business opportunities, neither has the academic community. With the continuous development of China’s market economy, companies have become the most important component of the market. Theft of business opportunities by directors or senior management is damaging both to the company and the business environment, which is why it is imperative to establish practical standard for ascertaining the business opportunities.


Mr. Chaoyi Ji
the managing partner and head of the Dispute Resolution team at East & Concord Partners