Overview

The Legal 500 and Dentons China hosted a webinar to explore imminent risks and future challenges in China, during and after Covid-19. 

The full agenda included:

 A summary of the most recent judicial interpretations

• The Supreme Court’s comment on potential unilateral terminations due to Covid-19
• Key points on labour dispute trials abstracted from the high courts of Beijing, Shanghai and Guangdong

Employer’s actions and options

• Salary cut negotiations
• Redundancy
• Potential employer liabilities

Crisis management from a transactional perspective and the outlook for the ESG ecosystem 

1. The impact of Covid-19 on cross-border corporate transactions

• Foreign Direct Investment, ODI, overseas financing and capital market, and some common provisions as well as specific deal structures

2. Common provisions of deal transactions

• Recitals (signing parties, on-site to online execution, taking into account the laws and regulations of different jurisdictions for execution requirements)
• Definitions of ‘business working days’
• Representations and warranties: revisiting the accuracy of insurance
• Conditions precedent and long-stop date: revisiting specific requirements of the counterparty (SOE, government approvals, no ‘gun jump’ filings)
• Break-up fees: valuation melt-down during Covid-19
• MAE: layoffs and new product lines
• Force majeure
• Dispute resolution: arbitration or court? Online or offline?

3. Specific provisions of a typical transaction

• The impact of new FDI laws on typical transactions (new 2020 FDI laws and simplified filing procedure, with different local practice, cross-border IP registration and protection)
• ODI (bidding process, how DD is conducted during COVID-19, including environment and employment DD, insurance of representations and warranties, and payment schedule and merger loans)
• Overseas PE/VC transactions (valuation adjustment mechanism in pre-IPO transaction documents, and QIPO definition)

4. The ESG ecosystem

• The trend toward an ESG (Environment, Society and Governance) eco-system in China
• Disclosure requirements of the main stock exchange to reduce the due diligence costs and potential risks
• Tax benefits
• TRIPS protection and exemption (encourage to obtain IPs while promote public interest during Covid-19)

Articles

For more information on the speeches given please see the articles below:

• ‘Key Points under PRC Employment and Labour Law during COVID-19’ – Shane Luo (English) (Chinese)
• ‘Impact of COVID-19 on Cross Border Transactions’ – Willow Wei (English) (Chinese)

Speakers

• Shane Luo, partner, Dentons
• Willow Wei, counsel, Dentons

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