(Yicai) June 10 -- English law is well suited to Chinese firms investing overseas because it covers many areas of commercial activity including contracts, insurance, shipping, maritime affairs and corporate dispute resolution, the president of the Law Society of England and Wales told Yicai in a recent interview.

When Chinese companies invest in regions such as Southeast Asia, the Middle East and Africa they often encounter legal systems that differ significantly from China’s, Mark Evans said. In some countries, court cases can take many years, and sometimes nearly a decade, to resolve, making it difficult for Chinese investors to protect their rights effectively.

To mitigate such risks, firms can specify in their contracts which country’s law will govern the agreement. Chinese companies generally prefer Chinese law, but foreign partners are usually unfamiliar with Chinese law and reluctant to accept it. In these situations, English law is often viewed as a neutral compromise that both sides can trust.

The widespread use of English law is rooted in Britain’s long history in international trade, finance, shipping and insurance. As a result, even today, many businesses involved in international commerce tend to choose English law for cross-border contracts and London as the dispute resolution venue, even when neither party is based in the UK.

For example, a Chinese firm might pen a contract with an Argentine company that stipulates that any future disputes will be resolved through arbitration in London under English law. Such agreements are not uncommon in international commercial activities.

English law governs 80 percent of global maritime transactions, 85 percent of international oil and fats trading, 80 percent of global grain trading and 40 percent of corporate arbitration cases worldwide, Evans said.

Many UK law firms have established offices in Shenzhen to help companies in the Greater Bay Area to go global. Their clients include both state-owned enterprises and technology firms. Advising on investment in the UK is just a small part of their business, and most of their services are focused on helping Chinese companies access global markets, Evans added.

The expansion of Chinese law firms into the UK should be seen as a win-win situation, Evans said. The entry of more foreign law firms into London and the UK will not take business away from British law firms, rather it will expand the size of the legal services market. They can also encourage more foreign investment into the UK and attract more international companies.

He explained that the UK legal market is very open, with over 200 foreign and international law firms currently operating in the country. The Law Society strongly encourages Chinese lawyers to study English law and obtain legal qualifications in the UK.

During his recent visit to China, Evans met with law students at four universities and explained to them the possibility of becoming qualified as both a Chinese and UK lawyer. This dual qualification would enable them to provide British law advice to Chinese companies doing business overseas.

Editor: Kim Taylor