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PRIVILEGED AND CONFIDENTIALMemorandum to: Jeff Wood, Esq.
Debevoi & Plimpton (Hong Kong)
Chine Court’s Jurisdiction Over AT &T没有牙齿的老虎
*此为提纲挈领之部门，可促使作者在之后的法律分析中紧扣题目，故有书写此部分必要
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*凡冒号、句号等表示一句终了的标点之后均空两格
You have asked us to advi whether a Chine court would have Jurisdiction over AT&T in the following transaction: * AT&T plans to invest in a Chine-foreign joint venture company (the “Joint Venture Company”) through Pudong LLC, an offshore special purpo vehicle to be established and wholly owned by it. * Once established, Pudong LLC will enter into a joint venture agreement (the “Joint Venture Agreement”) with two Chine parties to form the Joint Venture Company. At the request of the Chine parties, AT&T intends to provide a guarantee in the form of a comfort letter (the “Letter”) to ensure the performance by Pudong LLC of its obligations under the Joint Venture Agreement. The Letter (a copy of which having been provided to us) expressly provides that it is governed by New York law and subject to the jurisdiction of New York or Federal courts in the United States. The letter is propod to be signed by AT&T and countersigned by the Chine parties to the Joint Venture Agreement.Question
The question is whether AT&T will be subject to the jurisdiction of a Chine court by executing the Letter in the manner as described above.
*客户时间有限，有时只需要简短的结论性回答
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Short Answer*
If a dispute aris from the interpretation or performance of the Joint Venture Agreement and, in the abnce of a valid and enforceable arbitration agreement among the parties, a claim is made against Pudong LLC before a Chine court having jurisdiction over the claim, it is likely that AT&T will be named as an indispensable party and the Chine court may decide that, since the Letter is part and parcel of the Joint Venture Agreement, the court should have jurisdiction over AT&T.
Under Chine law, contracts or agreements such as the Joint Venture Agreement which will be filed with the relevant Chine governmental authorities for the establishment of companies such as the Joint Venture Company must be governed by Chine law. As a parallel, China’s Civil Procedural Law provides that, in the abnce of a valid and enforceable arbitration agreement among the parties, the Chine court will have jurisdiction over any dispute that may ari from the interpretation and performance of a contract such as the Joint Venture Agreement. Article 246 of the Civil Procedure Law states: “Actions concerning disputes arising from the performance of contracts for Chine-foreign equity joint ventures, or Chine-foreign cooperative exploration and development of the natural resources in the PRC shall fall under the jurisdiction of PRC courts.”
Since AT&T, by virtue of the Letter, provides a guarantee for the performance by Pudong
LLC of its obligations under the Joint Venture Agreement, it is likely that AT&T will be named as an indispensable party to the dispute. If so, the question is whether the Chine court will decide that it has jurisdiction over AT&T even though AT&T does not have any prence in China other than providing the guarantee.
鼓励的词语Under Article 243 of the Civil Procedure Law, a foreign person may be subject to the jurisdiction of the Chine court if, among other things, (i) it has a reprentative office in China, or (ii) it is a party to a contract which is the subject matter of the litigation, or (iii) it has asts located in China that can be attached. For example, parties to the Joint Venture Agreement will have to choo Chine law as the governing law and, in the abnce of an arbitration agreement, the Chine court will have jurisdiction over a dispute arising from the Joint Agreement by virtue by virtue of Article 246 of the Civil Procedure Law and over the parties if any of the conditions t forth under Article 243 of the Civil Procedure Law is met. On the other hand, Chine law also permits parties to a contract to choo the governing law and the forum of dispute resolution (including foreign courts) if such a choice is not with the mandatory rules under Chine law that pr
ovide otherwi.
Bad upon the above analysis, we are of the view that the Letter, as so drafted, in and by itlf does not constitute a contract that is mandatorily governed by Chine law or over which the Chine court will have jurisdiction in respect of any dispute arising therefrom. Chine courts should honor the parties’ choice of law and jurisdiction in respect of the Letter. On the other hand, however, if the Chine court determines that a dispute arising from the Letter constitutes a dispute of the Joint Venture Agreement, it may decide that it has jurisdiction over AT&T.
*此部分的写作可视情况及客户的要求而定，一般来说应该给出中肯而切实的建议
Suggestions*
In view of the above analysis, we would suggest the following: First, parties to the Joint V
enture Agreement agree that any dispute arising therefrom should be submitted to arbitration before a well established international arbitration institution, such as the London Court of International Arbitration or the International Chamber of Commerce Court of Arbitration. By law, Chine courts should honor the parties’ choice of arbitration and reject filing of a lawsuit by any of such parties in respect of a dispute arising from the Joint Venture Agreement.
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Second, the language of the Letter should be adjusted so as to eliminate any suggestion or impression that AT&T is the actual party (in lieu of Pudong LLC) that makes the investment in the Joint Venture Company.
Third, subject to the agreement among the Parties, the Letter should be as explicit as possible that the guarantee by AT&T is a general guarantee, and not a joint and veral guarantee. Under Chine law, in the abnce of a joint and veral guarantee, a party may not sue the guarantor until and unless it has exhausted its remedies against the primary obligor. This may add some additional protection for AT&T.
If you have any questions, plea feel free to call any of the undersigned.
*落款人及其联系方式须写清楚，但格式不限于此，备忘录中也可不写联系电话
