Time to level the M&A field

New mechanisms are needed to resolve disputes related to outbound investments of Chinese companies, experts in M&A, or mergers and acquisitions, said.

That's because cross-border M&A deals are rising among companies in the economies involved in China's Belt and Road Initiative, they said.

The dispute resolution mechanism is at present almost entirely in the hands of Western countries, which will affect the implementation of the Initiative, given the growing number of commercial and non-commercial disputes, said Ren Qing, partner at the Beijing-based Global Law Office.

GLO is the first Chinese law firm to provide legal services in a wide range of cross-border and domestic M&A's.

"Most of the cross-border investment in the countries and regions taking part in the Belt and Road Initiative is in infrastructure projects, which have long investment cycles and require large amount of money, so disputes will likely increase," said Wang Guiguo, director of the International Academy of the Belt and Road Initiative, while speaking to Hong Kong-based Chinese language newspaper Wen Wei Po.

"It is imperative to set up a disputes settlement organization in China, just like the International Centre for Settlement of Investment Disputes," Ren said.

The ICSID is an international arbitration institution established in 1965 for legal dispute resolution and conciliation between international investors. It is part of, and funded by, the World Bank Group, headquartered in Washington.

The Belt and Road Initiative has focus on infrastructure, trade, investment and intellectual property protection. In such a vast multilateral economic partnership, it is hard to avoid controversy, said Wang.

"Proper resolution of disputes will enhance the positivity of governments and enterprises which take part in the Initiative."

The idea of a new disputes settlement mechanism in China for cross-border transactions is currently a hot topic in academic and legal circles, according to Ren.

However, Chinese enterprises should try to avoid disputes, and plan their investment path properly to minimize losses, said Simon Li, a counselor at Anjie Law, a legal firm.