HONG KONG JUDGE AND MAINLAND CHINESE LAW PROFESSOR BOTH INSIST THEY MAKE NO MISTAKES FOR THEIR ABNORMAL BEHAVOURS IN DAILY LIFE

HONG KONG JUDGE AND MAINLAND CHINESE LAW PROFESSOR DO HAVE SOMETHING IN COMMON NOW, AFTER TEN YEARS OF PRACTISING THE CHINESE STATE POLICY OF “ONE COUNTRY WITH TWO LEGAL SYSTEMS”

---TO SEE A BEIJING LAW SCHOOL PROFESSOR SCODES HIS STUDENTS IN CLASSROOM FOR TEN MINUTES LONG FEELING NO REGRETS

According to a news report by Hong Kong Headline of 9th January 2008, a law professor with Beijing University of Political Science & Law, feeling upset by constant absence of class by his students, angrily scolded his students in the classroom recently by saying “bullshit”, “son of bitch”, “son of animals”, and also had conflict with one girl student. The incident has aroused hot debates among teachers and students, who consider the professor’s act defame the law school.

It is said that in the evening last Friday, Professor Yang, Fan of Business School with the Beijing University of Political Science & Law was scheduled to lecture on his last class. Since there was a compulsory course that all students had to participate in for its examination the next day, therefore, quite a number of students were absent for its preparation. Seeing that just a few students were present for class, Professor Yang started to lock the classroom and counted the present students, warning that the absent students were all deemed to have punishment as “violation of examination rules”. Professor Yang also warned that the present students could not send signals to those absent ones, or they would deemed to bear the same punishments.

It was not very long, however, that about 30 absent students turned up, expecting to secretly walk into the classroom. One boy student was so angry that he could not stop kicking on the main door. Professor Yang then fell into rages, started to shout at and scold the outside students “bastards”, “son of animals”, “son of bitch”, “dare to kick but no dare to admit”. The angry curses lasted for 10 minutes.

A girl student intended to leave the classroom, but was shouted stopping by Professor Yang. The girl student pointed out to him: Don’t you feel senseless to talk about all those things in class ?” Professor Yang then rushed out of the classroom, grabbing the girl student’s arms in order to send her to the school securities, during which they had conflicts, the girl student kicked twice at the professor.

The incident aroused arguments among teachers and students, feeling Professor Yang’s behaviors defame the law school.

Professor Yang states, however, that he does not feel regretful to his acts, insisting school punish the relevant students. The school has now started investigations into the incident.

(Comments: Being a once law school lecturer for 5 five years in earlier 90’s in Beijing, I feel shameful for Professor Yang’ behaviors. Should students not appear in class to listen to courses, the students might have some mistakes, the professor, however, should think more why they do that. It is greatly because the professor is always repeating boringly his years-old textbook or teaching guidelines without teaching techniques and lively examples. In fact, it is the professor, rather than the students, who should properly be reeducated or criticized. We can see from the incident as well that professors in Beijing are not always all rounded good persons, they may have in-depth knowledge in their academic fields or maybe not, they also need improving themselves in terms of spiritual minds, morals, patience and etc, or how to become a normal person in all circumstances)

(Notes: to compare the aforesaid article with my blogs dated 7th January 2008)

HONG KONG JUDGES ARE LEADING SO PURE AND HOLY LIFE THAT THEY MAY NOT KNOW ORDINARY LIVING THINGS ON THEMSELVES SOMETIMES

MR. JUSTICE IS SUED FOR OWING NEWSPAPER SUBSCRIPTION FEES OF HK$6,900 IN HONG KONG

According to the Headline Daily of 8th January 2008, Mr. Justice WONG, Shiying of the Hong Kong High Court has earlier been sued at the minor monetary court by an upset newspaper peddler for having not paid for subscription fees of HK$6,900. Both parties have ultimately agreed to make outside court settlements. Mr. Justice WONG insists that he has not made mistakes, but agrees to pay the newspaper peddler HK$5,010.

The newspaper stand owner of Mr. LI, Yaojia states that Mr. WONG, Shiying, 64, subscribed a sort of financial newspaper via his stand during the period of January 2002 to October 2005, involving subscription fees of HK$6,978. The stand owner demanded him many times but failed, therefore, he had to resort to the court for claims.

Mr. WONG, Shiying appeared at the court yesterday, arguing that the newspaper peddler had never mailed him any bills. Later on, when demanded for the outstanding fees, Mr. WONG, Shiying mailed out a check of HK$1,440, but failed to reach the stand owner.

(Comments: Hong Kong is a common law society, different from Mainland China. The Judges in Hong Kong have good social status, highly respected and expensively paid in order to maintain their independent positions to issue fair judges and reasonable decisions pursuant to common laws on good faith. The current story, however, tells us another side of a Hong Kong judge, who may be treated too well, always living in no financial troubles and does not need concerning about the grassroots or ordinary persons’ daily life things, so that they do not even know they should pay or offer to pay their outstanding bills at intervals, unless billed or demanded years later. Mr. Justice Wong’s arguments obviously can not convince ordinary people or media readers. Presume that his agreements were legally supported, the normal living orders would have to be altered or amended. Once a person receives due services in ordinary life, he has to offer to pay for that, rather to simply wait for bills or demands, no speaking of waiting for three years, this is common sense. Ordinary persons all know about that, let along a highly respected judge with higher moral standards living in the developed society of Hong Kong, who should know right and wrong much better than others. In the developing country of Mainland China, should a taxpayer fail to pay taxes for excuses of not receiving any tax bills, he may be deemed as "evasions of tax responsibility” and may bear heavily-imposed liabilities)

MEDIATION SETTLEMENTS FOR CIVIL LITIGATION CASES ARE BECOMING MORE AND MORE POPULAR WITH THE MAINLAND CHINESE COURTS !

DA LIAN INTERMEDIATE PEOPLE'S COURT HAS RECENTLY SUCCESSFULLY SETTLED A SINO-HONG KONG JOINT VENTURE CONFLICT

According to a news report by the People's Court Daily last month, Dalian Intermediate People's Court(“the Dalian court”) has made great ways to successfully settle a sino-hong kong joint venture conflict via mediation approach, satisfying both parties.

In June 2002, a Hong Kong catering company(thereafter referred to as “the foreign partner”) executed an equity joint venture contract with a commercial company in Dalian city of the Northeastern Chinese Liaoning province(thereafter referred to as “the Chinese partner”) in order to establish a joint venture catering company. The foreign partner invested RMB3,200,000 and the Chinese partner invested RMB2,800,000; in additions, both partners further agreed the foreign partner was responsible for the joint venture construction investments of RMB3,000,000 while the Chinese partner should lease out a plot of its land to the joint venture. In September 2002, the joint venture was officially issued with business license. As the joint venture was in operations for some years, however, both parties constantly had different opinions and their arguments later on became so heated that they had to settle their conflicts with the Dalian court.

The judges carefully studied the case, summed up the core points of conflict, organized four times of evidences exchange and cross-examinations, and also held three times of trials, during which both parties via their lawyers/agents had heated arguments upon legal facts and application of law.

The judges reckoned, after several rounds of hot debates, that there were possibilities of mediating the case, therefore, the judges were determined to use the mediation method to settle the conflict, they also brought up with a mediation option of “to terminate the joint venture contract, liquidate the joint venture enterprise and each partner to take back the money they have previously invested into the catering company”.

At the earlier stages of mediation, both partners still insisted on different opinions and no progress was made. The judges had to actively help them make analysis of advantages and disadvantages, pointed out the liabilities that both partners had to bear for their cooperation, and also let both sides know that if they continued the lawsuit, both of them should not only invest more manpower and money, increase litigation cost, but also the aforesaid losses would definitely be further expanded.

In order to persuade both parties to come to a mediation settlement agreement, the judges additionally invited management staff of the foreign partner, via its lawyer/agent, to come to Dalian for direct meeting with the Chinese partner counterpart. They were both deeply moved by the judges' actual feelings, sincerities, good faith and minding-no-troubles mediations.

In earlier December 2007, both parties ultimately agreed to a mediation settlement option and reached the mediation agreement.

(Comments: The lawsuit parties at issue are so lucky to have the kind-hearted / Marathon-style Dalian judges in China. Please bear in mind, however, that in Mainland China you can not expect to encounter such kind of mediation judges constantly, even though most of the Chinese civil litigation judges prefer to try and close their cases via mediations for immediate or earlier settlements)

WHO SAYS THE WALL STREET INVESTMENT BANKS ARE ALWAYS MAKING SKY-HIGH PROFITS CONCEITEDLY ? THEY ARE INVOLVED IN LAWSUITS OCCASIONALLY AS WELL !

LUMINENT SUES MERRILL OVER MORTGAGE LOSSES

(The article is taken from South China Morning Post dated 29th December 2007 with minor adjustments, for reference only)

Luminent Mortgage Capital, the home-loan investment company that lost about 90 per cent of its market value in 2007, sued Merill Lynch, saying the firm misrepresented the risk of mortgage-backed securities it sold.

Luminent invested in the securities in 2005 believing the mortgages were made to creditworthy borrowers and backed by “prime quality” collateral, the investment firm said at the end of 2007.

The default rate had been “extraordinarily high”, Luminent said.

Merrill denied the allegations, spokesman Bill Halldin said.

Sean O'Shea, a partner at the O'Shea Partners law firm said: “Merrill sold us subprime but packaged it as A-rated.

We do not think there is any way that they could not have known what they were selling us was defective.

Meanwhile, CNBC reported that Merrill Lynch planned to announce about 1,600 layoffs, less than 3 percent of its workforce, after disclosing forth-quarter write-downs.

The layoffs were likely to be in trading positions and related areas and were not likely to include the investment banking or private client groups, CNBC's Charlie Gasparino said.

Luminent said a lender was seeking US$8 million from Luminent, mostly in connection with transaction involving Merrill, the third-largest United States securities firm.

Luminent did not believe it was in default, the company said.

Luminent, however, did not name the lender.

Merrill “properly and accurately disclosed the overall quality of the loan pool”, Mr. Halldin said. “Luminent is a sophisticated institutional investor and we satisfied all their information requests before and at the time of their purchase.”

(Comments: Who can you believe in this money-driven world ? Even smart and tough American lawyers via investment institutions are said to be misrepresented when they are having non-legal/investment transactions with the world leading investment banks. Both of them are talking about different stories when the investment transactions fail. It seems from the story that the conference recording of decision-making things are of great necessities, for it can recall and tell the true stories of earlier stages; in additions, in the Untied States, recording may at least serve as persuasive evidence to convince judges to much extents, while in Mainland China, original recording via legal channels may constitute favorable legal evidence)

BEIJING COURT RULES IN FAVOR OF BAIDU FOR NO INFRINGEMENT

According to an updated news report in Beijing Youth Daily, several international music companies has sued the Mainland China's leading search engine company of Baidu for its providing of illegal music download links which shall constitute infringement.

Beijing Higher People's Court has now made rules, however, that Baidu has not constituted infringement, even though Baidu provides relevant searching links.

EMI, BMG and other international music companies have earlier filed with a Beijing court, suing Baidu for its unlicensed links, leading the illegal downloads much easier, and therefore have requested Baidu to make apologies, stop further providing with the links, and to make compensations of RMB1,670,000.

Baidu insists that what its company provides with in terms of search engines has no difference with others for links to searches, news and pictures.

(Notes: This ruling seems contradictory to the “BEIJING COURT RULES AGAINST YAHOO CHINA”, a similar copyright infringement case, also recently ruled by Beijing Higher People's Court(see my blog dated 22nd December 2007. Should you expect to know why the similar infringement cases have opposite rulings, you have to carefully look at and compare the two valid judgments to be possibly obtained either from the Beijing courts or from the parties or via their lawyers)

WHEN YOU PLANT ONIONS, DO NOT EXPECT VEGETABLES TO GROW --- TO SEE BLOODY LESSONS FROM THE DANONE/WAHAHA JOINT VENTURE DISPUTES !

1. Danone management might be too conceited to consult final legal opinions from the Mainland Chinese lawyers, or overwhelmingly relied upon its French lawyers or other common law lawyers right before official establishments of the Chinese joint venture, and that could seemingly have become the prime or one of the main reasons for its current bewilderment of mass global lawsuits

Danone decision makers may have already learned the bitter lessons now that in Mainland China, no matter what the overseas partners have talked with their Chinese partners or what documents they have mutually executed, the joint venture agreement, contract, articles of association and their amendments and other documents concerned in writing that have duly been approved by the competent Chinese examination and approval authorities and also duly registered with the competent industrial and commercial administrations(i.e the Company Registry) shall be deemed legally valid and may get the Chinese legal protections. Without governmental approvals in China of the joint venture agreement, contract, articles of association, their amendments and the likes, those agreed-upon and duly executed documents shall not be deemed legally valid and can not get the Chinese legal protections.

With respect to the Danone /Wahaha joint venture, both parties may have no faults to discuss or sign two joint venture contracts at the outsets, if they were willing to do that for whatever reasons, but Danone should not have agreed to deliver the simplified contract to the Chinese authorities for approvals, even though the delivery was probably made by the Chinese partner of Wahaha. Without the prior consents of Danone, however, we do not believe in general that the Chinese partner of Wahaha dared to submit just the simplified contract for governmental approvals, even thoughWahaha might indeed like to do that. The detailed contract, which may stipulate that Wahaha brand should become part of the joint venture assets for their sincere cooperation, can not get legal recognitions and lawful protections in lights of the Chinese foreign joint venture law and its implementations as well as the other foreign investment state policies in writing, which have all clearly indicated that governmental approvals of agreement, contract and articles of association as well as corporate registrations are preconditions for official establishment of a sino-foreign joint venture and for its valid operations.

Therefore, Danone has to swallow its hand-planted bitter fruits to date, because they should have known or should have well been informed of those primary Chinese law, regulations and state policies in writing at the outsets.

2. Danone's then management or then French lawyers or other common law lawyers concerned might probably be liable for its current tough situation or its huge losses

Overseas companies normally like to bring along their home lawyers to expand their business abroad, which is quite understandable and practical, but it does not necessarily mean that their home lawyers and home in-house lawyers can independently act as the overseas lawyers. In this particular case, should Danone fully use Mainland Chinese lawyers all along, apart from using their French lawyers or other common law lawyers who are normally good at drafting and arrangement of commercial documents, etc, they should have avoided the "common-sense" Chinese legal mistakes, or at least, Danone may have one more alternatives to possibly sue its Chinese lawyers for their negligence of work. Or probably, Danone may still sue somebody now and then for their huge loss: then decision-making management or then French or common law lawyers, who could not just make fatty professional fees from the joint venture establishment, but also shall be liable for their possibly negligent mistakes.

3. Danone and Wahaha shall take golden opportunities to make rapid settlements for their various lawsuits in the best interests of Danone

Given that the French and Chinese presidents have recently shown concerns over the Danone / Wahaha series of lawsuits; Danone might have negligent mistakes at the initial stages for agreeing to presenting the simplified contracts for Chinese governmental approvals; Wahaha is a privately-owned enterprise, etc., Wahaha may (1)offer to send a competent negotiating envoy quietly to talk with Mr. Zeng of Wahaha, (2)Danone may also have to prepare to pay more than 4 billions yuan(note: Danone has initially agreed to offer the prices in exchange for the rest firms of Wahaha) to buy back the Wahaha's rest firms, and (3)Denone may take first steps to withdraw all its lawsuits, on the pre-conditions that his single(not too many persons) chief-negotiator envoy has had successful secret contacts with Mr. Zeng of Wahaha and has had preliminary verbal or written agreements regarding mutually major concerns, under such circumstances, both parties may soon announce their close-all-disputes news, which shall be good for Danone in the long terms.

4. Further delay of settlements for all lawsuits could no doubt arouse more attentions of the medias and their readers at home and abroad, and benefit lawyers as well, even though I am also a lawyer, but certainly will damage more of Danone's permanent interests

PEACE PLEDGE A BRAND NEW TWIST TO WAHAHA DISPTE

(Analysis by AI GUO in Beijing with publications by South China Morning Post on 24th December 2007. This article with clear descriptions is cited here for reference and case studies)

Despite months of heated finger-pointing, estranged joint-venture partners Groupe Danone of France and Hangzhou-based Wahaha Group have cleverly left a back door open for an out-of-court settlement amid a barrage of public allegations that would suggest an inevitable allout confrontation.

Now, that leeway is being seized as both sides last week said they would return to peaceful talks and end all lawsuits and arbitration procedures, in an effort to meet the expectations of the mainland and French governments.

In fact, both companies have scheduled preconditions talks to resolve their disputes on brand and non-competition issues.

Economics professor Ning Xiang-dong, of Tsinghua University, likened the Danone-Wahaha dispute to a marital spat between a young couple, in which each side only thinks of how the marriage will benefit their own parents' families, at the expense of the new family from their union.

“You can blame it on either their rush into marriage, or a failure to tolerate one another in the relationship,”professor said.

Danone established a joint venture with Wahaha in 1996 and took a controlling 51%stake in the company.

Under the agreement, Danone allowed Wahaha to have several independent companies engage in beverage production and distribution outside the joint venture, and Wahaha agreed to transfer the Wahaha brand to the joint venture.

At the initial state of the merger, Danone and Wahaha signed two different contracts in order to pass state scrutiny in 1996. A simplified version was submitted to relevant ministries for authorization, while a detailed contract, with the issue of the brand transfer clearly identified, was kept between the two companies as a guideline for daily operation.

After realizing that Wahaha's non joint venture companies had been generating strong profits by selling products under the Wahaha brand, Danone offered Wahaha four billion yuan earlier this year to inject those firms into their joint venture. The offer was rejected as too low by Wahaha founder and chairman Zong, Qinghou.

Mr. Zong brought the dispute to the media's attention in April and said his company still owned the Wahaha brand because an earlier application to transfer the brand was denied by the State Trademark Office.

Danone, meanwhile, accused Wahaha and Mr. Zong of cheating in the brand transfer issue, and sued Mr. Zong in courts around the world. Danone argued that Mr. Zong and his family members had used the Wahaha brand for their benefit.

Mr. Zong and Wahaha, for their part, sued Danone in mainland court for hurting the joint vesture's interests by investing in rival firms.

Signs of a softening in the dispute emerged late last month after French President Nicolas Sarkoz visited the mainland and reached a consensus with President Hu Jintao on the need for a speedy and amicable resolution.
Emmaneul Faber, Danone's president for the Asia-Pacific region, this month offered to suspend all legal proceedings in exchange for Wahaha returning to the negotiation table with “concrete measures” for a reunification of the joint venture.

Wahaha, which gained an edge after winning a ruling from a Hang-zhou arbitration court over the ownership of a Wahaha brand this month, said it was willing to restart talks on condition Danone dropped all lawsuits first to show its “regret”.

Yang Du, a professor with the business school of Beijing-based Renmin University said both sides had allowed their lawsuits to continue in order to gain bargaining power at the negotiation table.

“This could have been settled if Danone had agreed to pay more to purchase Wahaha's independent companies,” Professor Yang said.

Mr. Zong, 63, who built Wahaha from a backyard production outfit into one of the country's most famous beverage brands, seems to have won the media war by playing the nationalism card. He claimed his fight was an effort to protect the brand from foreign destruction.

A survey at website Combinator showed that about 70% per cent of 347 respondents supported Mr. Zong.

Zhou Dunren, an economics professor with Shanghai-based Fudan University, said the dispute highlighted the need for tight contracts between joint-venture partners.

“You can not take anything for granted. You have to pay to let professionals work every detail out. It's the kind of cost no company should try to save on,”Professor Zhou said.
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