Major Legal Issues

When engaging in cross-border contracts, parties may encounter numerous legal challenges, including determining the appropriate jurisdiction, the applicability of laws, and the arbitration processes. Additionally, cultural and language barriers, such as differences in business customs or legal terminology, can complicate these transactions, along with issues related to the enforcement of contracts. For instance, if an Indian company enters into an agreement with a Paris-based firm to sell cotton for delivery to the United States, several complications may arise. In the event of a breach of contract, questions will need to be addressed regarding the proper jurisdiction, choice of law, arbitration and dispute resolution, and the taxation implications.

 Jurisdiction Problems: Where will disputes be heard?

Jurisdiction presents a significant challenge, as it determines where disputes will be resolved. Each party may prefer to file in their own country for convenience and ease of comprehension. According to Indian law, the jurisdiction is typically established by the location where the agreement was concluded and subsequently deemed a legal contract. However, in cross-border transactions, jurisdiction can vary based on the specific terms outlined in the agreement. It is imperative that the contract explicitly outlines the designated jurisdiction, whether exclusive or non-exclusive; once this determination is made, the parties cannot later revoke it.

 Choice of Law: Which Country’s Law Will Apply?

The concept of choice of law pertains to the legal principles that will govern the interpretation of the contract and the resolution of any disputes that may arise. If the contract stipulates a governing law, the courts may apply that jurisdiction’s legal framework. However, conflicts can emerge if the applicable law is not clearly defined. In such instances, the court may adjudicate based on the closest connection or the principal relationship test. It is advisable to include a clause specifying that the agreement will be governed by and construed under the laws of a designated country.

 Arbitration and Dispute Resolution

Arbitration provides a means to resolve disputes privately, outside of the court system, through a neutral third party selected by both parties. Including comprehensive arbitration clauses within the agreement can help circumvent delays and lengthy litigation processes. Essential elements of an arbitration clause include the agreed-upon venue, applicable arbitration rules (such as those established by ICC, LCIA, or the Indian Arbitration Act), the number of arbitrators, and the language of arbitration. It is crucial to clearly articulate these details to prevent future complications.

Enforcement problems align with enforcing awards or court orders to obtain compensation after winning a case, which is often challenging, particularly in foreign jurisdictions. As India is a signatory to the New York Convention, arbitration awards are typically recognised and enforceable in member countries, provided they comply with local legal standards. To facilitate enforcement, it is prudent to include explicit clauses addressing enforcement procedures in the contract from the outset.

 Tax and Compliance Issues

Engaging in cross-border transactions can present unique taxation and regulatory challenges that vary from one country to another. The Double Taxation Agreement (DTA) serves as a tax treaty designed to prevent the same income from being taxed in multiple jurisdictions, thereby reducing the risk of tax evasion and promoting fiscal fairness while encouraging international investment. Indian companies must deduct Tax Deducted at Source (TDS) when making payments to foreign parties for income deemed taxable in India; however, compliance with DTA provisions can help mitigate or eliminate tax obligations. When engaging in international money transfers, it is essential to consider the regulatory frameworks in both countries involved. In India, these transactions are guided by the Foreign Exchange Management Act (FEMA) and the guidelines set forth by the Reserve Bank of India (RBI). Compliance with authorised channels, proper documentation, and the usage of appropriate purpose codes is essential to ensure a smooth and lawful transaction.

 How to Avoid These Problems

Drafting a robust agreement incorporating explicit clauses articulated in clear language is essential to navigating the complexities associated with cross-border contracts. The legal landscape can be intricate, and seeking the guidance of a legal advisor can prove invaluable in ensuring all legal nuances are adequately covered.

 Conclusion

Cross-border business opportunities can be immensely beneficial but require legal safeguards to protect all parties. Crafting a strong and comprehensive contract for international transactions lays the groundwork for smooth operations and helps to minimise potential complications. In global dealings, well-structured contracts are key to fostering successful business ventures.

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Konsorcium bank tvořené společnostmi Komerční banka, a.s. (která zároveň působila jako koordinátor a agent), Česká spořitelna, a.s., UniCredit Bank Czech Republic and Slovakia, a.s., a Všeobecná úverová banka a.s., pobočka Praha – se dohodlo na poskytnutí účelového úvěrového rámce za účelem refinancování stávajícího zadlužení a dalšího posílení kapitálové struktury společnosti NET4GAS.

NET4GAS provozuje více než 4 000 kilometrů plynovodů a hraje klíčovou roli v integraci evropských energetických trhů. Jako jediný provozovatel přepravní soustavy plynu v České republice zajišťuje bezpečný a efektivní přenos zemního plynu jak na domácím, tak na mezinárodním trhu.

Tým Dentons tvořili partneři Jiří Tomola a Ondřej Bartoň, counsel Rainer Frank, seniorní advokát Martin Fiala, Senior Associate Jan Kořistka a Junior Associates Miroslav Sýkora a Jan Juráš. NET4GAS v oblasti finančních aspektů transakce využila poradenství EY, a to týmem ve složení David Zlámal, Jan Pilmaier, David Chudomský a Ivana Gallová.

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Blue Owl Capital manages over US$250 billion in assets. The transaction marks Blue Owl’s first major investment in the UK grocery sector and demonstrates its conviction in the long-term value of high-yielding supermarket real estate. The JV aims to grow its portfolio to £1 billion over the coming years, targeting further acquisitions across the UK. The partnership also supports SUPR’s capital recycling strategy, enabling it to reduce debt and reinvest in new opportunities. The seed portfolio—comprising five Tesco stores, two Sainsbury’s, and a Morrisons—features omni-channel locations supporting both in-store and online grocery fulfilment.

The Dentons team comprising more than 40 real estate lawyers in England and Scotland was led by Co-Chair of Global Real Estate Evan Z. Lazar and Head of UK Real Estate Rob Thompson.

Evan Z. Lazar, Co-Chair of Global Real Estate at Dentons, commented: “It’s been a pleasure to advise Blue Owl on its entry into the UK retail sector through this significant transaction. Their partnership with SUPR, the UK’s leading grocery real estate investor, sets a strong foundation for Blue Owl’s growth in this space.”

Rob Thompson, Head of UK Real Estate, added: “We are delighted to work with the team at Blue Owl. This transaction demonstrates our ability to deliver complex real estate advice that aligns with our clients’ strategic investment objectives.”

The transaction team was led by Real Estate Partner Alex Coulter, who coordinated a cross-practice group including Real Estate Partner Brian Hutcheson, Counsels Caroline Stead and Katie Todd, Senior Associates Emma Foster, Helen Cairns, Verity Houlker and Gaelen Doherty, Associate Giulia Ross, and Trainee Kelly Johnson. The wider team also included Property Litigation Partner Bryan Johnston and Senior Associate Thomas Nolan; Corporate Lending and Real Estate Finance Partner Simon Tweedle and Associate Imogen Beaver; Corporate Partner Michael Snook and Associate Daniel Kaye; Construction Partner Mark Macaulay; Energy Partner Helen Bowdren and Associate Shanie Earl; and Regulatory and Investigations Senior Associate Katy MacAskill; with support from Real Estate Partner, Stewart Middleman in respect of insurance aspects.

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Latham & Watkins LLP represents Divert in the financing with a project development and finance team led by Washington, D.C. partner Paul Hunt, with associates Giancarlo Reanda and Priya Patel. Advice was also provided on corporate matters by Boston partner Stephen Ranere, with associate Cherrie Wang; on tax matters by Houston partner Jim Cole, with associate Andrea Herman; on project contracts by San Diego counsel Seth Richardson, with associates Carlos Diaz and Tanya Khiatani; and on real estate matters by New York counsel Lisa Brabant.

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Hyatt intends to use the proceeds of the offering to fund a portion of the US$2.6 billion purchase price for Hyatt’s pending acquisition of Playa Hotels, in which Latham is also advising. Playa is a leading owner and operator of all-inclusive resorts in Mexico, the Dominican Republic, and Jamaica.

Latham’s interdisciplinary team, including members of its market-leading Capital Markets Practice and its Hospitality, Gaming & Leisure Industry Group, advised Hyatt in the financings, and was led by partners Roderick Branch, Cathy Birkeland, and Michael Pucker, with counsel Manasi Bhattacharyya and associates Andrew Rutsky, Chelsea Carlson, and Meg Tompkins. Partners Diana Doyle and Rene De Vera, with associates Michael Zucker and Valerie Silva, advised on tax matters, and partner Larry Seymour, with counsel Aryeh Zuber, advised on benefits and compensation matters.

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In a published profile, Am Law highlighted the complexity of the IPO and the tremendous amount of coordination between Latham’s REIT capital markets team and its private capital team, saying they “worked hand-in-hand to come up with a transition strategy that would support a transition of US$18 billion in value into the public markets over a three-year period.” Additionally, the profile emphasized the innovative legal strategies employed, including the development of a “novel private structure” by Latham’s private capital team, which was successfully transitioned to the public markets.

Sager told Am Law the IPO was “many degrees of difficulty greater than anything else I have done in my 28 years of practicing law.”

The profile also noted Latham’s lifecycle work with Lineage for over a decade, guiding its transformation from a single warehouse operation to a global entity with 480 warehouses.

“Having been a part of the growth of this company almost from its inception made this IPO very personal,” Zomorodi told Am Law.

Kneib added that the work was “vast and constantly evolving,” but that makes it “exactly the type of IPO where the Latham platform excels.”

This recognition marks the seventh consecutive year that Latham partners have been named Am Law Dealmakers of the Year. Justin Hamill was recognized last year for advising on UFC’s US$21 billion-plus merger with WWE. In 2023, George Davis and Jeff Bjork were honored for representing Mallinckrodt in the multinational pharmaceutical company’s successful Chapter 11 restructuring. Marc Jaffe and Tad Freese were named in 2022 for representing Rivian Automotive in its IPO, with Tad also recognized in 2021 for advising on Airbnb’s IPO. Justin Hamill was honored in 2020 for advising Virgin Galactic in a transaction establishing the world’s first and only publicly traded commercial human spaceflight company, and Greg Rodgers in 2019 for representing Spotify in its groundbreaking direct listing on the NYSE.

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Clifford Chance has previously advised Azelis on multiple financing transactions, including the company’s IPO on Euronext Brussels and the related financing arrangements in 2021 and its €400 million debut bond offering in 2023. The proceeds from this transaction will be used to refinance certain existing debt of the company and support the company’s growth strategy.

Clifford Chance’s cross-border, multidisciplinary team was led by London partner Drew Rundus, senior associate Yash Ranade and associates Garo Yaghsezian and Trey Oxendine with respect to the bond financing. New York finance partner Thomas Critchley and London partner Neil Cavanagh advised on the loan financing with senior associate Rachel Freeman and associates Eugenio Decio and Francesca Spittal. Belgian law advice was provided by Brussels partner Niek De Pauw, counsel Wim Aerts and associate Sonia Belhassen.

Drew Rundus commented: “We were delighted to advise Azelis on another successful financing transaction. This transaction showcases the capabilities of our teams across the globe to work in tandem on a range of financing products.“

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As part of the transaction, iBridge HK Holdings Limited (a wholly-owned subsidiary of Keymed) will take a 30.01% equity interest in Belenos.

Shanghai partner Yang Yi said, “It’s an honour advising Keymed on this strategic transaction which highlights our expertise in innovative, cross-border and IP-driven transactions in the healthcare sector.”

Yi led a cross-border team of lawyers in Düsseldorf, Hong Kong, New York and Washington, D.C. advising on M&A, antitrust, intellectual property and equity investment aspects. The team comprised:

• Beijing: Partner Bai Yong, counsel Dayu Man
• Düsseldorf: Counsel Carolin Kemmner and associate Annabel Joschko;
• Hong Kong: Counsel Yuling Geng, senior associate Michael Yan;
• New York: Partners Andrew Epstein, Jason W. Parsont and Matthew Warner, counsel Daryl Fairbairn and Lauren Rackow and associate Vicki Ye; and
• Washington D.C.: Partners Brian Concklin and Renee Latour and associate Elyssa Wenzel.

New York partner Matthew Warner said, “This transaction reflects the amazing, collaborative teams we have across the globe. It was a pleasure to work with our colleagues in Shanghai, Hong Kong and Germany to provide cohesive healthcare and US investment advice for Keymed on a transaction that will further strengthen its network and the value of its platform.”

The firm has a track record of advising on landmark and innovative transactions in the healthcare and life sciences sector including advising Sciclone Pharmaceuticals on its HK$8.79 billion privatisation by GL Capital, Haier Group on the global regulatory filings for its acquisition of a 20% equity stake in blood products company Shanghai RAAS from Grifols and medical devices company MicroPort Scientific Corporation on its convertible loan facility and credit support.

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