Accurately identify and apply Ethiopian laws
Protect the rights and interests of “going global” enterprises
[Basic case]
In March 2016, the outsider Jiang and other investors set up the New Intercontinental Company in China, and invested and established Sinosteel in Ethiopia in the name of the New Intercontinental Company, and appointed Wang to participate in the company’s operation and management locally. In view of the fact that Ethiopia has granted foreigners holding shares in the company of the country the convenience of visa exemption, the investors of all parties have signed an Investment Cooperation Agreement with Mr. Wang, which stipulates that Mr. Wang and New Intercontinental are registered as shareholders of Sinosteel, but New Intercontinental actually owns all the shares. Wang Mou agreed to hold the equity on behalf of New Intercontinental Corporation. If New Intercontinental Corporation decides to change the proxy holder, Wang Mou will unconditionally cooperate in handling the change registration. The Investment Cooperation Agreement shall be governed by Chinese laws. In February 2019, New Intercontinental Company notified Mr. Wang to register all the changes of its equity holdings in the name of New Intercontinental Company, but Mr. Wang refused to cooperate after receiving the notice. New Intercontinental Corporation filed a lawsuit to request Mr. Wang to transfer his equity of Sinosteel Corporation to New Intercontinental Corporation free of charge, and handle the corresponding change registration.
[Judgment result]
Zhangjiagang Municipal People’s Court held in the first instance that the equity of Sinosteel held by Mr. Wang was held by him on behalf of New Intercontinental Corporation. New Intercontinental Corporation has the right to request Mr. Wang to return it free of charge, and go through the change registration procedures, and the judgment supports the lawsuit request of New Intercontinental Corporation. Wang appealed to Suzhou Intermediate People’s Court. The second instance of the Suzhou Intermediate People’s Court held that the provisions of the Investment Cooperation Agreement between Mr. Wang and New Intercontinental Company were applicable to Chinese law. According to Chinese law, there was an entrusted shareholding relationship between Mr. Wang and New Intercontinental Company, and Mr. Wang should return the equity according to the provisions of the Investment Cooperation Agreement. According to the provisions of the Law on the Application of Foreign-Related Civil Relations Law, the laws of Ethiopia, the place of registration of Sinosteel, shall apply to the registration of changes in equity of Sinosteel. According to the provisions of the Ethiopian Commercial Code, New Intercontinental Company required Mr. Wang to handle the equity change registration in accordance with the provisions of Ethiopian law, and could apply to the competent authority of the country to handle it. Therefore, the appeal was rejected and the original judgment was upheld.
[Typical significance]
The security of overseas investment needs strong legal protection. Disputes arising from overseas investment of enterprises may involve the relevant laws and regulations of the country where the investment is located on foreign investment. Only by accurately identifying and applying foreign laws can we effectively protect the legitimate rights and interests of Chinese investors overseas. In foreign-related commercial cases, the identification and application of foreign laws is a difficult issue. In addition to the provision of the parties, the identification of foreign laws through legal experts is also an important way. The Suzhou International Commercial Court set up an expert committee, and invited international legal experts to serve as expert members. This case is the first case in which expert members assisted in identifying foreign laws. The accurate identification and application of Ethiopian laws in this case, and the direct implementation of the judgment results by the Ethiopian administrative department, is a breakthrough in the field of international judicial assistance practice
