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1、April 29, 2005PRIVILEGED AND CONFIDENTIALMemorandum to: Jeff Wood, Esq. Debevoise & Plimpton (Hong Kong)Chinese Court’s Jurisdiction Over AT &TBackgroundYou have asked us to advise whether a Chinese court would h
2、ave Jurisdiction over AT&T in the following transaction: * AT&T plans to invest in a Chinese-foreign joint venture company (the “Joint Venture Company”) through Pudong LLC, an offshore special purpose vehicle to
3、be established and wholly owned by it. * Once established, Pudong LLC will enter into a joint venture agreement (the “Joint Venture Agreement”) with two Chinese parties to form the Joint Venture Company. At the reque
4、st of the Chinese 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
5、 (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 proposed to be sig
6、ned by AT&T and countersigned by the Chinese parties to the Joint Venture Agreement.QuestionThe question is whether AT&T will be subject to the jurisdiction of a Chinese court by executing the Letter in the man
7、ner as described above.Short Answer*If a dispute arises from the interpretation or performance of the Joint Venture Agreement and, in the absence of a valid and enforceable arbitration agreement among the parties, a cl
8、aim is made against Pudong LLC before a Chinese court 空 一 行空 兩 行空 兩 行空 一 行*此為提綱挈領(lǐng)之部門(mén),可促使作者在之后的法律分析中緊扣題目,故有書(shū)寫(xiě)此部分必要*凡 冒 號(hào) 、 句 號(hào) 等 表 示 一 句終 了 的 標(biāo) 點(diǎn) 之 后 均 空 兩 格左 邊 距 為3.00cm右 邊 距 為3.00cm*客戶(hù)時(shí)間有
9、限,有時(shí)只需要簡(jiǎn)短的結(jié)論性回答距信紙?zhí)ь^下邊緣 1.30cm空 一 行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.Suggestions*In view of the abov
10、e analysis, we would suggest the following: First, parties to the Joint Venture Agreement agree that any dispute arising therefrom should be submitted to arbitration before a well established international arbitration in
11、stitution, such as the London Court of International Arbitration or the International Chamber of Commerce Court of Arbitration. By law, Chinese courts should honor the parties’ choice of arbitration and reject filing
12、of a lawsuit by any of such parties in respect of a dispute arising from the Joint Venture Agreement.Second, the language of the Letter should be adjusted so as to eliminate any suggestion or impression that AT&T is
13、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&
14、;T is a general guarantee, and not a joint and several guarantee. Under Chinese law, in the absence of a joint and several guarantee, a party may not sue the guarantor until and unless it has exhausted its remedies ag
15、ainst the primary obligor. This may add some additional protection for AT&T.If you have any questions, please feel free to call any of the undersigned.Xiaoming Li (86-10-6554-1155)*Zhang Yi (86-6841-0088)Quan Ruixue
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