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NEWSLETTER(Page 6)
Main Index
Index:
* IBA Buenos Aires Conference - Section 3-1 of 4
* IBA Buenos Aires Conference - Section 3-2 of 4
* IBA Buenos Aires Conference - Section 3-1 of 4
| IBA Daily news Buenos Aires Conference 2008 Monday October 15 |  |
Differences in sports contracts come down to more than simple dollars and sense. According to the lively roundtable discussion yesterday about football players rights and contracts within countries, cultural divides and legal methodology often come into play.
The discussion began with the dark side of recruiting in South American football, where children are signed to contracts before theyre teenagers. The informal recuriting process begins when uncles or friends of children call
agents and teams and ask for tryouts.
Less respectable agents sign 10-year-old players by gauranteeing parents immediate money in return for a players rights through to the age of 20 when they sign professional contracts. The impoverished parents dont
always understand what theyre getting their children into. At the end of the day both parents sign the contract because the oppourtunity is too much for them to turn down, sports agent Julio Quriga said.
Problems arise 10 years later when a player is negotiating his first lucrative professional contract with teams such as Boca Juniors (pictured). That is one of the biggest problems respectable agents run into, Quriga said. We
will be at the bargaining table with the player and the owner, and a figure will walk in from a dark corner claiming he is the real agent.
In the US professional recruiting works on a more basic standard, with college and highschool drafting. Often if a player is under 18 years old, the players parents sign a contract for him, but rarely are his rights given away
before the age of 16.
Additional methods are taken to ensure players dont back out of a contract with specific teams. As soon as we draft players we sign them to a contract with a signing bonus, William Shearer of Powell Goldstein said. If they back out of the deal early we have the ability to claim that money back.
Italian youth contracts are binding and negotiated directly through a club until the age of 19, according to Riccardo Cajola of Cajola & Associates Law Office. After that clubs have a three-year window to sign a player to a longer deal. Contracts must be drafted on templates designed by the league, he said. There is no other way agents can negotiate.
Cajola also explained the economic rights a player has. While in the US sponsorship rights are owned by the player, in Europe agents and
marketing groups hold a certain percentage of the rights.
While clubs have little control over economic rights, European players often find themselves on the short-end of sponsorship deals because the investors are pulling in money for themselves.
The discussion then swung to the challenges clubs face with revenue contracts. In Buenos Aires, representatives estimated that more than 80% of a teams revenue comes from player sales and trades with European clubs.
Ticket sales and television rights make up the rest. Clubs simply cannot survive without transfers, Quriga said. The small clubs sell to the big clubs and the big clubs sell to Europe. Thats just how it works.
The clubs are also regulated by the Argentinian Football Association rules, which prohibit the increase of ticket prices and limit local television opportunities. While clubs are allowed to increase the price of select highvalue tickets, a majority of the general admission seats are governed by the AFA.
That contrasts with the US where teams generate revenue through media packages and sponsorships. Media is easilly the largest revenue maker for teams in baseball, Shearer said. The local television rights and advertising
bring in around 70% of the income.
He went on to say that teams can sign their own contract to broadcast within 100 miles of the teams home stadium. National television rights, since the most recent collective bargining agreement between teams, are split evenly
between the 30 major league teams.
The Los Angeles Angels of Anaheim, which Shearer represents, were able to lower general admission prices, renovate their stadium and charge less for merchandising because of the increased television revenues.
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AFRICAN REGIONAL FORUM
Africa will benefit from the credit crunch
Huge losses on western markets mean that foreign investors are looking elsewhere for new assets in which to invest their excess funds. And African countries could provide the secure returns that they are looking for.
While the rest of the world heads toward recession, the African economy is growing. Changes in national laws have opened up the market to foreign investors, and made Africa a more attractive investment prospect. I think there will be a growing trend for sovereign wealth funds (SWFs) to invest
in Africa, said Wim Dejonghe, of Allen & Overy in Belgium. We have seen increased activity all across the continent, and there are new opportunities for high-return investments. Speaking at yesterdays Africa
Forum session, Can Africa Compete?
Dejonghe outlined the rapidly expanding role of SWFs in the global economy, and urged African businesses to be ready to take advantage of this available capital.
The audience of lawyers, many from African countries, seemed keen to engage in the debate over which investment opportunities most appealed to SWFs. Rafiu A Lawal-Rabana, of Ra Lawal-Rabana & Co in Nigeria, challenged the sessions optimistic outlook, and said that unless there is investment into agricultural projects, the ordinary African will not benefit. Dejonghe agreed that there was a big debate over whether any benefits do go down to the general population, and highlighted the problem in convincing SWFs to invest in smaller projects.
Away from government initiatives such as infrastructure and tourism, lower-profile projects incur the same management costs but provide lower returns.
Geography could also be a challenge. Much existing investment has focused on northern Africa, which is attractive for its proximity to the Middle East, and neglected sub-Saharan countries, where poverty is a bigger problem. It is here that lawyers and businesses must work together to devise
solutions. Session chair Sam Okudzeto, of Sam Okudzeto & Associates in Ghana, said that lawyers in these countries need to be proactive; not sit around and hope for projects to arrive on their doorstep.
Speaking from the floor, Erik Richer La Flche, of Stikeman Elliot in Montreal, Canada, told delegates that if you want SWFs to choose African countries, its up to you to create the vehicles and business models that allow investment. Others agreed that some restructuring of the African legal environment was necessary to make it more efficient at receiving investment.
La Flche cited a study that had revealed that the best investment opportunities in African actually lay in small and medium-sized businesses, but said that SWFs and similar investors were unaware of this fact. He also said that the time for one-way solutions to poverty was over, and that investors are not interested in charitable models; what they want is a
good investment opportunity.
Dejonghe said that the key to attracting investors was to offer diverse, wide-reaching projects which engage with the countrys economy, and that this was how benefits could filter down to the general population.
They wont build you a road without anything else; but link it to an economical activity like tourism, and you might have a deal.
Following huge losses on the American markets, Chinese state banks are also looking to Africa for safer investment. A joint fund with African
banks worth $6 billion has been developed to invest in various African economies.
Okudzeto called SWFs a very exciting topic, but warned assembled
lawyers it is important that we equip ourselves properly to make the
most of this. He described attracting SWF investment as a challenge, and
said that lawyers must be ready to best advise businesses on creating
opportunities that appealed to investors.
SWFs have been limited in the past due to their lack of transparency and accountability. This has led to unease over national security. However, a new code of conduct devised in a joint initiative between SWFs
and the International Monetary Fund (IMF) should increase transparency and reduce nervousness about foreign investment. The Santiago Principles, which were presented to the IMF yesterday, consist of 24 guidelines
relating to governance, accountability and investment policies of SWFs worldwide.
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INSOLVENCY AND RESTRUCTURING LAW EDITORIAL
Possible bleak future for smaller hedge funds
Hedge funds in Asia face grim times as the global recession prepares to hit
them hard. As more than 50 attendees at yesterdays session on The Intersection of the Credit Markets and Insolvency heard, Asian funds suffer from the credit squeeze far more than their US or Cayman-domiciled
counterparts.
Some smaller Asian-Pacific hedge funds will find it harder to survive. Theyve been affected far more than the American hedge funds by the fall in stocks, said Rachel Shahid-Saless, a consultant at the World Bank in her personal capacity.
Asian funds have been hit hard because of their investment strategies. Shorting is illegal in China, for example, and is seen by many other countries as a risky enterprise.
As a result, funds have concentrated on long positions and benefitted from the economic boom. Now that boom is over and stocks have plummeted across the world, these funds are in trouble.
As Shahid-Saless explained: This has created a vicious cycle. The fall in the stock markets led to a withdrawal of funds from Asia, which in turn caused a further drop in the value of stock. Survivors will have to
operate in a market in which investment banks have diminished in number and funding is harder to raise.
Asia is not however the only market to face contagion. In recent weeks, South America has had to acknowledge the spread of the US-originated recession. Just a month ago, Brazilian president Lula de Silva was saying what crisis? Go talk to Bush but now he has to admit that the recession in
the US can affect all economies, said Javier Armando Lorente, of Argentine firm Naveira Truffat Martinez Anido Lorente & Lopez.
A Brazilian peer agreed. Globalisation works for good and bad, said Otto
Eduardo Fonseca de Albuquerque Lobo, of Motta Fernandes Rocha. And last week the crisis finally parked in Brazil. With the crisis comes distressed companies unable to recapitalise or fund debt repayments. Several countries have recently updated their insolvency legislation to replace outdated laws, some of which such as Brazils dated back more than 60 years.
The efficacy of these new laws, however, remains to be tested. Lawyers on the panel expressed concern that this could prompt rash and rushed alterations to the new legislation that would be regretted over time.
Im not very keen on ad hoc measures or procedures, said Lorente. We have to use the laws we already have, and use them wisely.
Another panellist, Nick Hood from Begbies Global Network, agreed. Members of the audience unfortunately missed out on some of his comments due to time constraints the panel was forced to conclude but in onversation with IBA Daily News after the session Hood said:
In virtually all emerging markets there are either ancient and inappropiate laws or newlyengineered legislation which like all prototypes will be prone
to unexpected failure.
Many emerging economies do not have business rescue procedures in
place to deal with distressed companies, so saveable institutions will be liquidated. And few of these emerging markets have the professionals to deal with these situations. It is this, Hood said, that should be a major
cause for embarassment.
Every one of us should be ashamed for allowing this situation to exist. Weve had years of benign economic conditions to do something positive, and its too late now.
Emerging market economies will deteriorate unneccessarily and lawyers from more developed countries will go back to the plentiful work in their comfort zones.
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VOXPOP: ATTRACTION OF THE CONFERENCE
QUESTION:
Why do you come to the IBA conference?
Anthony Mogboh Mogboh & Co Nigeria
It gives me the opportunity to meet other people, refresh with new ideas and keep up to date with legal issues around the world. It is well organised too. There is a lot less stress in registering, getting materials etc. The organisers do everything for people (short of being pampered!)
Luiz Rogrio Sawaya Batista Nunes Sawaya Nusman & Thevenard
Brazil
The main reason I come is for networking to meet people. This is the first conference Ive attended outside of Brazil, so its new to me. My firm decided to come at the last minute, so Ive only just registered, but Im looking forward to various committees including the tax committee. At the end of the day though, it is all about networking and meeting new contacts.
Mia Rinetti Pavia e Ansaldo Law Firm Italy
The IBA conferences are always very international and there are up-to-date speeches focused on the most important topics in the banking sector (in which I work). The seminars highlight the concerns of our clients, which is important as they are also our concerns. It is also a great opportunity to meet lawyers from other jurisdictions to share experience and create relationships
for future cross-border transactions.
Mahesh S Acharya Kaplan & Stratton Advocates Kenya
Some of the seminars are very interesting and useful, but principally, coming here isabout putting faces to the names of peoplefrom different jurisdictions that I have worked with in the past. The sheer volume of people that come here distinguishes it from other conferences. Because it is a general conference, you have a wider range of materials to gather from different practice areas. It is more rounded.
Tola Sanusi Lagos State Ministry of Justice Nigeria
I work for the Lagos state government and our job is to meet the needs of the public. Lagos state always sends a sizeable delegation so that all departments are represented. Im in the civil litigation department, but we all use the conference to learn of the developments in our respective areas. It is also great to meet people and exchange ideas over a cup of tea! After five days, you feel refreshed and you have a new perspective on the law. We get to learn so much.
Dr Hossein Mohammad Nabi Board member of the Iranian Central
Bar Association Iran
Im a board member of the Iranian Central Bar Association and we always participate in the annual IBA conference. I think it is very good for all lawyers to discuss many ideas at the same forum. It is also good for people to learn about other jurisdictions, international law, the status of the rule of law and other cultures in general.
Sadiq Jafar Hadef United Arab Emirates
Being a leading UAE law firm, we are keen to support and attend the IBA. Every year we will send increasing numbers, in particular because the UAE is hosting the 2011 event in Dubai. This years conference has been of extra interest as a result of the unfolding financial crisis. It enables us to discuss its
impact with our global friends and get a better perspective on events.
Diana Benjamin Kingsley Napley UK
The sessions are interesting and you always learn something from each of them. It is also good to catch up with friends that I have made through the IBA from all over the world. In networking terms, you can meet more people in one day than you can from a whole month of lunching in London. Ive almost run out of business cards already!
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WATER LAW
Egypt, Bavaria, Chile and back again
Juan Francisco McKenna
Yesterdays session on international river basins was not as sexy as water and terrorism the Monday talk by the Water Law Section that was covered by the Daily News under the headline Ex-Cop Cautions Lawyers. Mark Lane of Pinsent Masons was happy to admit that from the start. But he pointed out to the assembled audience that the environmental implications of water were probably much more important. Indeed, Tom Pine of the University of Hertfordshire, the ex-cop referred to in Tuesdays headline, said in that session that terrorism ranked fairly low on his list of priorities for
water disasters. As he sat in the audience at yesterdays discussion, Lane reminded listeners that climate change and the environment have much greater potential to fundamentally alter water supplies.
Rivers and river basins that are determined to be international are governed by international rather than local law. The principles of that international law were set up by German states in 1897, and have remained fundamental to
cross-border disputes ever since.
The first speaker, Juan Francisco McKenna of Carey y Ca in Chile, described the impact of these principles as he took the audience on a flying tour across time and space. The principles that originated in Germany had a big impact on the Nile later and affect McKennas work in Chile today.
The Danube runs through eight countries, so issues over the rights to use, access and control the water supply are manifold. As with the Nile, it is the rivers length and the number of countries it runs through as a result that make it a precedent for water law.
The Nile runs through Egypt, Sudan and Ethiopia. But the nature of the river means that while 86% of the water originates in the hills of Ethiopia, 87% of it is used or consumed in Egypt. The remaining 13% is used in Sudan and almost none in Ethiopia. Historically, the position of the Egyptian civilization has meant that it had greater rights to use of the water through size of population and importance to the country, but that has obviously changed over time, said McKenna.
Under international water law any riverside state has the right to use any water that flows across its territory in a reasonable and equitable way. While session chair Eric Garner of Best Best & Krieger said that the vagueness of this phrase is an almost permanent employment contract for lawyers, there are several principles that underlie the meaning of reasonable
and equitable. These include the economic needs of the state, the size of the population (hence Egypts priority), prior and current use, potential for damage, avoidance of waste, and the geography, hydrology and climate of the basin.
Garner pointed out that it is fascinating to see how different countries around the world apply these principles and how they connect with local law. For example, in the US we have the Colorado river, which we basically tell Mexico it can access when we feel like it, he joked. Mark Lane asked McKenna whether there was a case for updating these principles, given the acceleration of climate change and a different set of priorities around conservation as a result. Its a good question, but I think that in between these principles there is an idea of conservation already at work. For example, you have to take a rational approach to the use of water and its affect on supply downstream.
You cant just let the river bed dry up. Garner picked up Lanes point about updating the principles though, saying: Mark, I think I just heard you volunteer to work on updating those on behalf of this committee!
The issues in Chile derive from the countrys long and narrow shape, which means that many rivers flow into and across its borders from Argentina to the east and Bolivia in the north.
Historically, Chile has also had a problem because the rights to use water were controlled by a registered ownership system, which required no particular use. As a result, use was inefficient and there was not enough for industry and irrigation. The solution has been to tax the owners of the rights to water if they do not make full use of their supply. That tax led to many people selling off their rights in the open market, creating a private system of water licences. Recently a licence for 190 cubic metres of water per second was sold for $45 million.
This shows that there is the money in Chile to properly develop water supplies and even to bring in water from abroad, said McKenna.
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LEGAL MARKET: LATIN AMERICA
The Sao Paulo syndrome
Brazil is fast emerging as an international and regional legal hub, says Ryan
Pasquale
Following several years of high commodity prices, Brazil has concentrated its financial strength to a point of regional dominance. In turn, the country
has come to exemplify the growing prominence of legal work emanating from Latin America for international firms.
As a result of this sustained growth, a number of such firms have looked to establish permanent offices in the country where, ironically enough, foreign firms are prohibited from practising domestic law. Fortunately for them, many of Brazils corporations are themselves looking abroad for opportunities.
While firms like Clifford Chance and White & Case have maintained offices in Brazil for more than a decade, there is a sense of urgency for others like Mayer Brown, Simpson Thacher & Bartlett and Skadden Arps Slate Meagher & Flom to make the move. This renewed interest from abroad has its roots in Brazils recent history, with the country legitimizing its financial markets through maintained economic stability.
On the surface, operating an international firm in Brazil appears exasperating. The country, like Bric counterpart India, excludes foreign lawyers from practicing here. This exclusive environment has staved off any saturation of the legal community by outside firms, though the event itself has long been anticipated. The fact that it took so long for the foreign law firms [to enter Brazil] gave us the time to prepare ourselves, says Alexandre Bertoldi, managing partner of the Brazilian firm Pinheiro
Neto Advogados. They are going to be competitors, but they are not going to be enemies. This is a very good move. We finally feel that Brazil is getting into the big leagues.
Though Bertoldi welcomes international firms to the market, he is quick to point out that not every Brazilian lawyer shares his view. I feel that the establishment of top US firms in Brazil is a very good thing. These firms are
going to bring sophistication to the market; they are going to force Brazilian firms to raise their standards. The ones who are better prepared will benefit from that.
The sophistication Bertoldi and others speak of is hardly a secret. Capital raised through IPOs in 2006 and 2007 have brought about a dichotomous effect, splitting the fortunes of the various Brazilian law firms. Of the companies that conducted smaller IPOs a year ago, some find themselves
already in need of new capital sources. This has subsequently created a pool of acquisition targets for potential buyers fuelled by their own IPOs and Brazils recently revaluated sovereign debt.
In the last year Brazils trading platforms underwent significant consolidation. Following a surge of domestic IPOs, the Brazilian Mercantile & Futures Exchange (BM&F) merged with Sao Paulos stock exchange, the
Bovespa, in May 2008. Not only becoming the largest exchange in the region, the aptly named Novo Mercado is now also the third-largest trading platform in the world.
Foreign interest in Brazilian brokerages by groups like Citibank and Lehman Brothers also helped accelerate the financial sector. Lehman Brothers announced the revival of its Brazilian subsidiary in 2007, while Citibank acquired independent brokerage Intra SA Corretora de Cmbio e Valores in 2008. While some of these banks, such as Lehman, have become casualties of the credit crunch, it is expected that whoever takes over their assets will still see Brazil as an oppornity.
Domestic Brazilian banks have expanded this year. Banco do Brasil serves a growing Brazilian middle class through increasing demand for car and home loans, while Banco Ita grew through strategic acquisitions in the Caribbean. Similar to other domestic market sectors, much of the middle-markets success can be traced to recent IPOs.
These developments have dispelled the notion of Brazil as a one-way street for outside investors: power buyers have emerged from the country. Surging commodities prices Jonathan Bisgaier, head of Skadden in Sao Paulo have brought large companies like iron-ore producer Companhia Vale do Rio Doce (CVRD) to the market with an appetite for acquisitions. In February 2008, the Brazilian miner offered $76 billion for its Swiss rival, Xstrata.
Though ultimately unsuccessful, the bids appearance in an otherwise stark deal landscape spoke volumes of CVRDs market position.
Brazilian beef producer JBS also tapped the market for strategic purchases in Europe and the United States. The company purchased a 50% stake in Italian beef producer Inalca for $342 million as well whole acquisitions of Smithfield Foods beef operations and National Beef Packing in the US for $560 million and $565 million, respectively. JBS now constitutes the largest beef processor in the US.
Project finance work in Brazil has also gained notoriety. Rising demand for commodities has pushed much of the countrys aging infrastructure to capacity, making toll roads, power plants, and port facilities a priority. What were seeing is that Brazil has really emerged as a major trade centre, said Allen Miller of Chadbourne & Parke. Miller co-heads the firms Latin America practice group. The paradigm is getting more complex. There are more ways of finding good work from Brazil, its just matter of finding what matches a firms strengths and disciplines.
Similarly, work in the energy sector has thrived. The newly-discovered Tupi oil field could potentially reap 5-8 billion barrels of crude for the already energy-independent state, spurring the construction of new drilling platforms and underwater drilling vessels for the state-owned oil company,
Petrobras.
Brazil also continues to develop alternative energies to supplement its abundant natural resources. Wind farms, ethanol plants, and other enewables projects like the $11 billion hydroelectric dam on the Madeira River look to
diversify the countrys energy-related infrastructure. I think that power infrastructure has been mainly BNDES financed, but we anticipate that theyre simply not going to be able to finance all the needs down there, said Miller.
There are a number of public-private partnerships developing both at the state government level and federally. Theres a subsidized alternative energy program. In the infrastructure-development area, things have moved more
slowly than many would have liked, but the pipeline for projects is pretty big.
Regardless of the Brazilian economys recent success, the firms moving here see long-term opportunities in the region.
I think it basically became more and more clear that the boom-and-bust cycles you saw in Latin America were going to level off, said Jonathan Bisgaier, head of Skaddens new Sao Paulo office. He describes the progression of establishing a Brazilian office as one of careful planning and analysis over the course of several years. It was a combination of wanting
to provide better client service and the overwhelming amount of travel we were having to do [to Brazil]. Over the last 2-3 years, I was literally [in Sao Paulo] every two and a half weeks. The clients really prefer to have you handy. And no matter how good a phone call or a video conference is ...
personal contact is preferable.
It was a combination of factors. I think its the growing strength of the Brazilian economy and Brazilian markets, said Paul Schnell, manager of Skaddens Latin America practice group. Schnell also notes the expansion grew equally out of new business in the region as well as servicing existing
Brazilian clients, saying: We have enough existing clients to justify opening the office here.
The ultimate effect of the move by international firms, however, remains only speculation. From the Brazilian perspective, one immediate effect is the intensified competition for talent. The main effect so far is the [foreign] firms have created a turbulence in the market because they are trying to
hire Brazilian lawyers, said Pinheiro Netos Bertoldi. The fact that right now the exchange rate is very favourable to the real in an almost unprecedented way ... it makes the salaries the domestic firms can offer to associates so different than what we could offer before.
An increase of inter-Brazilian deals also looks to bolster work for the countrys domestic firms, potentially offsetting any business lost to new competitors. Out of necessity to the market it serves, the legal community has become a global one. And like the Middle East and Asia before it, Latin America represents the new frontier for firms looking to leverage market
volatility through strategic geographies. As always, sustainability is the essential element for an emerging market like Brazil and the law firms looking to operate within it. The Brazilian markets reaction to recent economic success, newfound financial prominence, and a growing
legal market has only reached a stage of infancy. And promising as the signs may be, it seems no clear bellwether can be deciphered from the countrys recent progress. Only more of same will make for a successful long-term relationship between foreign law firms and Brazil, and that, unfortunately, is still to be borne out of the years to come.
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PROFILE: DAVID W RIVKIN
An Olympic chair
David W Rivkin, chair of the IBAs Legal Practice Division, discusses Beijing, beef and extra-territorial jurisdiction with Rachel Evans
Could you tell us a little bit about acting as a sports arbitrator at the Olympics?
David W Rivkin: For the last 10 years, Ive served as one of the panellists on the Court of Arbitration for Sport (Cas). This involves around 300 arbitrators from around the world and sends a dozen arbitrators to each Olympic Games. These arbitrators are needed to handle disputes at the games themselves which need immediate resolution. Ive been fortunate enough
to do that three times at Salt Lake City for the Winter Olympics in 2002, Athens in 2004 and in Beijing this year.
Besides Olympics, Ive also sat on some of the more high profile cases that Cas has had. I set on the panel that decided the Floyd Landis case. He was the cyclist that lost the Tour De France title two years ago for doping. And I also sat on the Oscar Pistorius case, the South African double amputee runner who wanted to run in the Olympics. We reversed a ban that had been based on an IAAF [International Association of Athletics Federations] rule that an athlete cant use any device that gives him an advantage. Theyd done a test that supposedly showed Pistorius had an advantage, but he actually only had an advantage over a portion of the race rather than an overall advantage. So we decided that there was no basis to ban him.
Unfortunately he wasnt able to meet the Olympic qualifying time in the small amount of time that he had left but hes working towards making the London 2012 games In Beijing, Cas itself had about 10 cases, eight of which
were heard while we were in Beijing. I chaired two cases, one of which involved a dispute between the Azerbaijani and Spanish field hockey teams and the International Field Hockey Federation. In the final qualifying game, Spain beat Azerbaijan but when there were the usual doping tests, these
raised the question about whether two of the Spanish players had ecstasy in their system. The International Field Hockey Federation decided that it couldnt be certain that the athletes had engaged in doping and therefore refused to disqualify them, so they went on to the Olympics. Azerbaijan
brought three different cases before Cas to try and get an order that they should participate instead of Spain. I chaired one of them and we ruled that they had no authority to appeal the International Field Hockey Federations decisions because they werent doing it under applicable rules.
The other case involved the Swedish wrestler who threw down his Bronze medal and stormed away. An officials decision went against him at the end of his semi-final that caused him to go from winning the second period, which would have required a third period to decide who the winner
was, to losing the second period and therefore the match. After the second period, the officials issued him with a penalty that cost him points from something that had occurred 45 seconds before the end of the period. And the wrestler believed that they should have stopped the match and imposed the penalty then, because if he had known that instead of gaining a point, hed actually lost a point, hed have had 45 seconds to make that up. After he made this protest, the IOC withdrew his medal entirely.
In our case he didnt try to get his medal back, but he did argue that the Wrestling Federations rules were in violation of the Olympic Charter because there was no appeal jury.
We ruled that the Olympic Charter does require that in the future the Wrestling Federation have some kind of appeal jury. He also asked the Wrestling Federation to impose some penalties on the officials that were involved but the Wrestling Federation had totally ignored this. We didnt say
that penalties were appropriate but we did say that under the Wrestling Federation rules, the federation has to give a hearing to an athletes issue. I think the decision probably gave him a little bit of solace, improving the rules, even though it didnt help him get his medal back.
The best purpose we serve is protecting the rights of the athletes. Federations make a lot of decisions, fortunately most of which are right; but if an athlete is excluded from a competition or something else occurs, we are a very useful forum for them. A large proportion of our cases at the Olympics involves eligibility for particular athletes, where the Federation has said that the athlete is not eligible under its rules. Were able to look at the rules and the claim and make a determination, otherwise the athlete wouldnt have
any recourse and the Federation, whether its right or wrong, would have the final word.
Are you looking forward to the conference in Buenos Aires?
Yes, very much. Buenos Aires is a beautiful city. My first visit to Buenos Aires was about a decade ago. I had a great time and I think a lot of people attending, certainly those Ive been speaking to, will be doing some tourism before and after in Argentina. Im planning to travel for about a week afterwards in Argentina. The food and the wine are excellent. Im not planning on eating any beef in the weeks leading up to it because during that week Ill be eating nothing but steak as Argentinean beef is terrific!
Buenos Aires will also be a good city to host the IBA. It has a great number of terrific venues for events, and delegates will have a chance to enjoy Buenos Airess wonderful culture during the week. The programmes that our committees in the Legal Practice Division have organised are really extraordinary so it will be a very full week of diverse programmes.
Which sessions are you most looking forward to?
The Legal Practice Divisions showcase programme is presenting the final report of a taskforce that I established at the beginning of my two years. The taskforce deals with extraterritorial jurisdiction, which is a subject that is increasingly vexing the legal community and international companies. It
is a subject where, given the broad expertise and membership of LPD members, we can play an important role. The taskforce was divided into six sub-committees that looked at the problems associated with extra-territorial application of the law in antitrust, insolvency, criminal law, civil litigation, bribery and corruption, and securities law.
Theyve all put together a great report looking at the issues that arise when countries impose their law on foreign companies operating in their country, or when countries themselves try and operate abroad, and also proposes a number of solutions. The full text of the report is going to be provided
in the welcome pack of every delegate in Buenos Aires.
Why did you decide to set up that taskforce?
Extra-territorial jurisdiction is something that Ive seen handling international disputes. I see the kind of issues and problems that arise when countries exercise broad jurisdiction over litigation and the parties that can appear before it. Ive also seen it in areas like antitrust and securities where
conflicting regulation by countries causes real problems for multinationals. Much of my practice is representing multinationals so I see the kind of issues that they face all the time. I also see the problems that countries have.
The IBA, and the Legal Practice Division in particular, has a lot of members that have particular expertise in the areas where territorial overlaps occur, so we can bring this expertise to bear on identifying the problems and finding solutions. Its a unique role that the IBA can play because of the experience
and broad geographic make-up of its members.
What other sessions are you looking forward to?
My main field is arbitration and the arbitration committee has put together a very large slate of interesting programmes. Im pleased that Im actually going to be able to speak on one Hot Topics in Arbitration because usually at the IBA meetings Im far too busy. This is the only problem of
maintaining the position that I have. Next year, when Im Immediate Past Chair, Ill be able to go to more of the actual sessions and Im looking forward to that. One of the nice things about the programme in Buenos Aires is that there are a good number of sessions jointly organised by committees within the same section.
This was certainly one of our goals when we reorganized the IBA a few years ago. We wanted to create benefits for our members from being a member of a committee, but also enable them to learn from some of the
related committees within the section. So its nice to see cooperation among the committees and the programmes theyre putting on.
How long have you been with the IBA?
Ive been involved in the IBA for nearly two decades. I was originally active within the arbitration committee and was vice chair of that committee for a couple of years. I then chaired the committee for four years before moving into the leadership of what was then the Section of Business Law. I served as Treasurer of the Section of Business Law, and then became Vice-Chair of the LBD and finally Chair.
What does your position within the IBA entail?
As Chair, weve been encouraging committees to involve their members to a greater degree. The committees have started a very long list of projects that allow them to bring their particular expertise to bear on problems in their field. Sometimes this means reporting to governments on a particular
issue, sometimes creating guidelines or best practices, sometimes this is simply creating a study thats available to members and non-members and helps the legal profession. Theres really quite a wide variety of projects.
We have worked to make sure that the committees not only put on outstanding programmes at the annual conference and many of them also put on a specialist conference at some point in the year but that they also use their collective expertise on various projects. This allows the IBA to
become a broader voice of the legal profession. It also provides a lot more opportunities for committee members to be active and involved. The antitrust committee alone has about a dozen projects going on, each of which involve a dozen or two-dozen members.
We have also worked to ensure that the officers of the committees, and the speakers at the various committee sessions, represent the geographic and gender diversity of our members. Youll now see a much broader representation of our membership than we had several years ago.
And I think weve worked on the quality of the conference programmes generally. This shows in the success that the committees have had with their various specialist conferences this year. Quite a few of them have sold out despite the challenging economic times. People obviously find our programmes high quality and thats very satisfying.
As your term as head of the Legal Practice Division comes to an end, are you happy with what youve achieved?
Some of my friends in the US are active in the ABA and their chairmen have one-year terms of office rather than the two we have at the IBA. Im glad that we have two-year terms for committee chairs and division officers because it gives us time to actually see some of our projects through.
My two-year term finishes at the end of the year but I certainly want to remain active in the IBA. Ive been active for nearly two decades and its been very satisfying. Im going to be a member of the IBAs management board as the LPD appoints three members and has started a tradition
to appoin t the immediate past chair, so that they can bring that experience to bear with the broader management. I will have that position for the next two years but it doesnt involve so much day-to-day work.
Will this mean more time for transactional work?
Ive still been very active over the past two years but it means that Ill be able to do that work more often from my New York and London offices, rather than from wherever the IBA has taken me.
My transactional experience has been very helpful to my IBA work. One of the things that I enjoy about doing international arbitration and litigation is that every case is different. Every case raises a different kind of issue about the kinds of things that can go wrong in deals. Ive learnt a fair amount from these cases which has helped me understand the kind of issues that the various committees face.
Equally my IBA work has helped on transactions. Ive met terrific lawyers in the IBA and Ive been able to call on them when my cases have required help in a different jurisdiction. Its important in handling international disputes to understand whats underlying the dispute. That often involves legal or cultural differences and my exposure to these systems through the IBA has certainly helped.
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* IBA Buenos Aires Conference - Section 3-2 of 4
| IBA Daily news Buenos Aires Conference 2008 Monday October 15 | |
Ride the recession
Pippa Blakemore shares some advice on capitalising on the opportunities and overcoming the challenges of a financial crisis
The global slowdown gives your law firm the unique opportunity to increase business. The credit crunch gives you the rare opportunity to check, evaluate, streamline and repair the four key pillars of your business: (i) the robustness of your strategy in the face of current pressures; (ii) the effectiveness of the services that the firm provides to its clients, referrers and intermediaries; (iii) the robustness of your supporting systems; and (iv) the appropriateness of the structures that support the other three pillars.
While many of your competitors may be retreating into themselves, distracted by internal discussions on survival, this is the time for you to look outwards rather than inwards and actively seek ways to improve your services to your current clients and referrers, to develop your contacts and increase and maintain your profile. Thus, when the economic position improves, you are lean, fit, strong and finely tuned to take the greatest advantage of the global upturn.
How robust is your strategy?
Have the current pressures facing your firm blown your strategy to irrelevance?
Is your strategy the cause of some of the problems you are facing? Or has it proved to be the stable point of reference, keeping the firm moving steadily forward while maintaining fee income and profitability on
these choppy economic seas? Analyse what your strategy should have incorporated and didnt, what it did incorporate that proved unhelpful and what it included that is now proving valuable. Apply the results of this analysis to your revised strategy.
Ensure that your future strategy incorporates comprehensive risk management, anticipating as many threats as possible, with plans on preventing these, minimising their impact or overcoming the consequences. Incorporate comprehensive diversification so that the firm is not over-dependent on a particular region of the world, country, economy, sector or practice area.
Your strategy should also incorporate scope for taking advantage of the opportune as well as the planned. All unexpected opportunities should be objectively evaluated against a pre-agreed set of criteria to ensure that they fit with the general direction of the firm but not so strictly that such
judgement stifles entrepreneurship.
On the other hand, you may not have had a formally articulated strategy at all. Or, if you did, like 75% of strategies it was not fully implemented. Now is a good time to evaluate whether you could have done better with or without one. Measure the profitability of each of your clients, sectors, industries and countries and the associated costs of maintenance and winning new business.
Do your clients see that you deliver?
Many of your competitors will be retracting and trying to cut corners on the services they give to their clients. This reduction in service comes at a time when your clients feel most vulnerable, when they need the greatest support from the firm without being able to give in return. If you demonstrate
that you are on your clients side in the bad times they will remember this with gratitude when the good times come, as they surely will. This applies to individuals who may have been made redundant. Keep in touch they may become the entrepreneurial successes of the future.
Ensure that you have well-structured client teams, with a well-publicised client relationship partner, a deputy and a well structured, supportive team. Make sure that everybody in the team understands their role, responsibilities and the expectations of the client.
Make as many opportunities as possible to review with your clients what they want from you, even more so than if things were going well. Clarify their expectations and whether these expectations have changed because of economic pressures on them. Accept their offers to meet and find out what is happening in their business, having carriedout your own pre-meeting research beforehand. Ask for meaningful, systematic and structured feedback on your past performance. Demonstrate to the client that you genuinely want to hear his views. Act on what you hear and, by changes in your behaviour, show that you have implemented the clients requests, within reason.
It is also important to go back to the client at an agreed time to check that his expectations are being met. The current decrease in work volume, and the increase of time that you may have as a consequence, is a unique opportunity to demonstrate to your clients how important they are to you and to strengthen the relationship at this time of mutual hardship.
Enhance the perception of your service by offering ways in which you can help. Research and keep yourself up to date with what is happening in the clients organisations, industries, jurisdictions and political and social spheres including, for example, the impact of the current economic maelstrom and its effect on exchange rates. Monitor tax changes, regime changes and any legislative procedures.
Think of some innovative and imaginative ways in which you can make the clients life easier and improve their profitability and performance. Even if these are inappropriate, they indicate your desire to help and that you are constantly thinking of your client.
Be enthusiastic about your firm and yourself. You need to be interested in your own firm; what it does, how, where and for whom. Clients are constantly surprised about what law firms do and will very often say to lawyers who mention something casually in a conversation, I didnt know you did that. They are often surprised that you have not offered to help in this area before. Therefore, now is an opportunity to talk to the client about your successes. Clients want to be associated with a successful firm be proud and enthusiastic about what you have achieved. Demonstrate that you are the right firm to be supporting your clients in times of difficulty and that you are fully poised for the next phase of the relationship.
Relish challenges on fees as an opportunity to demonstrate your value. General counsel will be under pressure to cut costs. Clients are increasingly asking for a reduction in fees and lower rates. Do not immediately say yes to these requests, because by doing so you will undermine the fee rates you have been charging and hence the clients trust in you. A clients priority is the value you give them in getting the job done so that they can achieve their commercial objectives. Put the demonstration of value in the language and terminology of each individual organization so that in-house counsel can explain to the chairman, CEO or finance director in his words rather than using legalities.
If discussions become fee negotiations on rates, try to adhere to the basic negotiation principle, which is that you dont give away one thing for nothing, such as an immediate discount on rates. Try to give away something that may be of less monetary value to you but that is greatly appreciated by the client. Constantly look for ways to work with your clients to help them reduce their costs and increase your value to them. Do not assume that clients recognise this.
Take nothing for granted. Reviewing your services in todays climate gives you a unique opportunity to stand out from other law firms who are retreating into a defensive position. It gives you the opportunity to get to know your clients better and so strengthen the relationship in times of shared pressure. As your current clients are your greatest source of income and your greatest ambassadors, it is important that these clients continue to recognise that you believe in yourselves and in your future. They will be with you in future if you are with them now.
Check your systems
All of your systems should have four clear, well-publicised objectives. First, do your systems develop and strengthen relationships with current clients, intermediaries and referrers?
Second, do they increase your firms effectiveness in eveloping new contacts, networking and raising the profile of the firm? Third, do they increase the win rate of pitching for new business? Fourth, do they secure the future of the firm? Take the opportunity to streamline your systems now. The following are the critical ones to check.
Technology
Are you maximising the opportunities offered by technology? Many firms have invested heavily in highly sophisticated technology but have not had the time to use it to the full. Frequently this technology is state of the art, but is only being used at a fraction of its capacity. Now is the time to work out how you can increase the return on your investment in technology.
On the other hand, technology is not an end in itself in systems such as client relationship management (CRM). There is often the feeling that once the system is bought and set up there is nothing more that needs to be done by people because the system will do it for them. So assess realistically how to make the most of your CRM systems, whatever their level of sophistication.
Service standards
Do you have tailor-made service standards and key performance indicators? Many key performance indicators have been reduced to the basics of how long it will take to answer a telephone, how long it will take to answer an email and how long it takes to deliver a piece of advice. Although these are irritants to clients when not met, now is the time to devise some more sophisticated service standards, tailormade to each client and based on their own key performance indicators. These key performance indicators can be
introduced into feedback discussions with clients, or discussions with potential clients, and will demonstrate to the client that you are keen be measured in the same way that they are measured by their clients or customers.
Targets
Do you have systematic identification of your targets? The firms criteria for new clients need to be widely publicized and understood to ensure that all efforts are targeted, focussed and effective. Events and seminars, for example, are not just ends in themselves but an important part of bringing
in new clients, as well as strengthening relationships with existing clients. A productive event is one in which there is a pre-briefing on each guest, where each person achieves what they want from the event and there is personal and coordinated follow-up so that, for example, one potential client does not receive four follow-up communications.
Events
Do you have a system for delivering imaginative and costeffective events? There is now a temptation, particularly if people are being made redundant within the firm, to cut down on seminars, events and socialising. Buck the trend by investing thought, time and creative brainstorming to hold events that are not extravagant and glitzy but small, targeted, personal and imaginative. Clients will feel more comfortable enjoying these, rather than the extravaganzas that they are well aware they will ultimately pay for.
Profile maintenance
Are you systematically maintaining your marketing and profile?
Global corporations discovered in the last economic downturn that cutting back was deleterious when the economy started recovering. Law firms can learn from this. Externally, keep issuing confident and meaningful press releases with a good story, encourage lawyers to write articles to be published in the journals that your clients, contacts and referrers read, encourage them to write the book that they always wanted to write and look for different ways to increase profiles in a range of imaginative ways. Internally, keep up morale by systematic and sensitive communication throughout the firm. This means telling people the good news and sometimes ensuring, when things have gone wrong, that everybody knows so that they do not feel caught out when clients and contacts appear to know more about the firm than the employees. This may be difficult, but it will be remembered when times get better.
New business
Are you streamlining your systems to increase your win rate when pitching for new business? Many pitches are done under tight time constraints and are often delivered within minutes of the deadline. This may not impress the potential client, because it appears to demonstrate that your firm will only deliver advice at the last minute. Take this opportunity to review your pitch approach and methodology to create a useful pitch template, systems for standard but tailored CVs, updated deal lists, standard but tailored experience lists and consistent photographs between merged firms, alliance firms, best friends and any group of lawyers who are joining together to produce a unified pitch.
Cross-selling
Are you systematically cross-selling to secure the strength of the firm? While they are not so busy, encourage lawyers to get to know each other, whether they are in adjacent rooms or on the other side of the world. You refer work to those you know, like and trust. Now is a great time to develop
and strengthen relationships internally. Encourage this at all levels of qualification as a long-term investment. Encourage the most junior lawyers to cross-sell and network with their colleagues on the same level.
Training and appraisals
Is everybodys effort targeted through focussed appraisals and appropriate bonuses and rewards? You can focus efforts into the areas you want by having targets incorporated into appraisals. Lawyers should start their business development as soon as they join the firm. This means that when they become partners they are fully skilled and able to take the business forward immediately.
Are you training everybody in soft skills for little direct cost? Resources and skills are available from your clients, who will be pleased to talk to you about their business.
Resources are available within the firm. For example, your lawyers could go on secondments to your clients or to your other offices in different jurisdictions. Senior lawyers from other jurisdictions and your office could speak to lawyers and pass on their experience. All of these ideas have few
direct costs, except for those of travel.
Billing
Improve billing and payment procedures. Reduce the writeoff on bills; increase the speed of payment and reward regular billing and speedy payment. Lawyers are fearful of chasing unpaid invoices, but this demonstrates commerciality to their clients. Work in progress needs to be closely monitored and write-off on bills needs to be reduced as far as possible. These new habits will be good preparation for the economic
upturn.
Strengthen your structures
The external structures of law firms can range from merged firms, alliances, best friends, associations and random contacts. These structures are now being severely challenged to prove that they are, in practice, appropriate
for the firms and the clients they serve. Analyse their strengths and durability through the remainder of the downturn and their potential for the future. Merged firms, alliances and best friends need to confirm their commitment to their particular structure and strengthen their foundations by improved mutual understanding and communication; they need to clarify their messages and champion their unique selling points in terms of benefits and added value to the client.
Internal structures can range from traditional practice area based on industry, sector or client-focussed groups to a hybrid. It is often difficult for lawyers to think outside their practice area and towards a client-centred focus. Now is the chance to change the culture to a client-focussed one by changing the structures and ensuring that they work now, at a time of great stress.
By checking the four Ss (strategy, services, systems and structures) of your firm, you will increase the productiveness of the extra time you have and increase your long-term investment of that time. When the economic situation begins to improve, you will have strengthened and developed the relationships you have with current clients. That is, you will have focussed your networking and increased your profile. This will make you stand out from your competitors, be respected by those in the market and ensure the
future of your firm.
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AFRICAN REGIONAL FORUM
African lawyers must do better
We as African lawyers and associations have not done enough to
promote human rights, democracy and the rule of law in Africa. That was the damning message from Donald Deya (pictured) of the East Africa Law Society at the afternoon session of the African Forum: Promoting the Rule of Law in Africa, the Role of Regional Institutions.
Noting that a disappointing 46 delegates of the large African contingent at this years IBA conference was present to hear the panel, Deya said: I request all of us to commit here and now to actively campaign for the ratification of the protocol establishing the African Court, to campaign for the ratification of Article 34, and to file cases on human rights and rule of law in our jurisdictions.
The African Court of Human and Peoples Rights was established in January 2004 when it was ratified by 15 African countries. Although 24 of Africas 53 states have signed up, only two have ratified Article 34. This clause requires a national declaration that the supranational Court has the jurisdiction to rule on all matters taken to it.
This, according to Deya, is simply not good enough. Cynicism must be put aside and African legal professionals intervene to promote the African Court and thereby support the rule of law throughout the continent.
Lord Goldsmith QC, UK ex-attorney general and current practitioner at
Debevoise & Plimpton, agreed. Echoing Deyas call to arms, Goldsmith asked: Are we as members of the IBA just passive bystanders watching what happens, or do we have the capacity to make change?
Goldsmith went on to explain the importance of the rule of law (a set of predictable regulations that apply to everyone) in enshrining the dignity of people, and creating the conditions under which wealth can be created.
For example, the UK House of Lords has just rejected the governments attempts to enable police to hold suspected terrorists for 90 days. This, Goldsmith argued, was neither a timely nor proportionate measure; its rejection shows the rule of law in action.
The ex-attorney general further demonstrated the rule of law in action with an anecdote about an Afghani warlord who was tried for war crimes in a British court. The warlord, when arrested, was working at a kebab shop in Streatham, London.
A British jury was told about torture on the road from Islamabad to Kabul and served the warlord with a 20-year sentence in a British prison. Its important to send the message that no one has immunity from their crimes; they will not be able to hide from justice in their own country or in Streatham.
In an African context, international intervention by NGOs or courts can prove controversial. But as Deya pointed out: Go ask the women and children of Darfur whether the International Criminal Court should go to Bosnia for warlords first. They want justice as soon as possible and if the ICC can give it, then it should.
International cooperation with African institutions is key, but so is work between associations within Africa. As another panellist Chief Fassy Yusuf, a Nigerian justice of the peace, summed up: Transparency, accountability and good governance are essential to the rule of law. And for these,
you need to network with other bodies that have a similar mission.
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Why Iraq was legal !!!
With Lord Goldsmith QC on the panel, a question on the Iraq war was always likely. Niyi Owolade, attorney general of the Osun State, Nigeria, raised the issue, prompting the following explanation:
The most difficult decision I ever had to make in my professional life was the legality of war in Iraq. Following the invasion of Kuwait, a resolution of the UN security council authorised intervention to restore law and order. Resolution 687 followed this with a ceasefire, providing Saddam Hussein complied with certain conditions.
The UN security councils Resolution 1441 in 2002 expressed the view that Saddam Hussein had failed to comply with the terms of the ceasefire, and he was given one more chance to do so. In 2003, he was judged to have again breached conditions.
Im flattered when people think that the only important thing is law. Its not. When I addressed the British Cabinet on this, they wanted to know whether war was legal, but also whether it was right. Thats a much bigger political matter. The consequences of intervention were undoubtedly worse than anyone had anticipated but it is perhaps still too early to tell whether it was the right political decision.
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BANKING AND SECURITIES LAW
A different take on bank failures
History repeated itself on Tuesday afternoon as delegates from Argentina compared notes with those from Chile on the restructuring methods that solved their various banking crises, in the nineties and now.
Roberto Silva of Marval OFarrell & Mairal in Argentina and Cristobal Eyzaguirre of Claro & Cia in Chile told the packed room, which had attendees standing along the back wall, about sucessful government intervention in financial systems. Im not saying this will work for every nation but it did work for us, Silva said.
Argentinas method included reorganizing assets into good and bad loans, then forming a so-called white knight to take on all of the good assets, placing them in an untouchable trust that the white knight could not access. After that the government allowed bad creditors unassociated with the white knight to fail, with a lot of shareholders recieving little value on stocks. There is not enough gold to pay everyone, Silva said. You have to make a tough decision about who to pay.
Will it be creditors, share holders or depositors? In the end we chose to save depositors. In Chile, Eyzaguirre said that more than 20% of the Chilean financial system was subjected to intervention or liquidation.
The decision was made to keep the most solvent banks assets alive using a 10-year purchase and repayment plan. The government, like Argentina, divided all assets into good and bad loans, then purchased the bad assets with a promise that they would be repayed over the next 10 years. The downside for shareholders was that they had give up on dividends. These actions raised bank capital and brought an influx of new investors into banks. Those new shareholders were allowed to recieve dividends.
The first part of the session focused on the restructuring of last years ABN Amro sale, which was probably the last large bullmarket bank deal. The controversy on the deal was the board members lack of shareholder consideration, as the deal may have had positive implications on the market but it undermined the value of shares.
Richard Hall of Cravath Swaine & Moore laid out a brilliant presentation on the inner workings of the deal, while discussing the pros and cons of the boards actions. The Chilean and Argentine representatives also described the results of the banks sale in their countries. In Chile ABN Amro branches were forced to become subsidiaries and transfer all liabilities and assets over to a local office.
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COMMUNICATIONS LAW
TV in your pocket
The reality is that the regulatory regime is not ready to deal with
current technologies.
Two years ago, Argentines packed into bars all over the country to watch the national team compete in the 2006 football world cup. Many of them would have had a poor view of the screen. How much easier would it have been for them to watch Esteban Cambiasso finish off arguably the finest team goal in years on their mobile phones?
One telecommunications operator wanted to trial such a service, but an injunction was successfully obtained by competitors.
Argentina, like many countries in the world, has a regulatory system that is holding back mobile television. This is because there is no certainty over whether it should be regulated as telecommunications or as broadcast.
At this early stage of development, there is uncertainty, not only over commerciality, but also over regulation, said Santiago Pardo Fajardo of Claro at an often lively discussion on mobile television yesterday. The reality is that the regulatory regime is not ready to deal with current technologies.
Earlier in the session, Clara Luz Alvarez of Bufete Quijano described a similar situation in Mexico. If mobile television is classed as telecommunications, then operating companies can have up to 49% foreign ownership.
But if it is deemed to be broadcast, there can be no foreign ownership at all and there are also strict rules on diversity and public interest.
Fajardo revealed that the world cup injunction in Argentina still stands today. There must be a new multimedia approach to regulation that deals with infrastructure and content at the same time, he said.
It needs to overcome the dichotomy of broadcast versus telecommunications and create legal certainty that may lead to investment. It also needs to be flexible, technology neutral and provider neutral. Finally, it needs to remove obstacles to innovation.
But a comment revealed that this still may not be enough. Samuli Simojoki of Borenius & Kemppinen said: In Finland, the network is there and the regulation has been amended.
But the business model to make an operation successful is too difficult.
Indeed, if Argentina wants a successful model, it may want to look closer to home.
In Brazil, network channels are broadcast to mobile devices for free and the content is identical. This inhibits the sort of interactive viewing that many hope mobile television would create.
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