< PreviousQUARTERLY Q/1 – 2020 At D&I, we have been working for the best in kind customer experience and modern service delivery for 121 years. During the last couple of years, we have received more top-rankings in Chambers and IFLR than ever before, with praising client quotes for our business understanding. Most recently, we ranked TOP 3 in key customer experience – categories in the Prospera Law Firm Review 2020, the annual survey for the largest purchasers of legal services in Finland. In “Client Understanding” and “Forefront of Digitalisation”, we ranked #1. We ourselves like to think that these recognitions stem from our strong culture of collaboration in which the client is in the centre stage, part of the team. On a more practical note, we believe in our daily routines relating to our D&I Powerhouse service method. Sometimes routines prevent innovation. Focus is required when creating new habits - crisis or not! Loosely quoting a Finnish futurist, inventor and author Perttu Pölönen: when we focus on where we can be better and more valuable than the dreaded machine, when we focus on what will not (presumably) change, we may make it. The things we focus on will get better. The good gets better. They say that without the noise in Wuhan, you could hear the birds sing. After the pandemic, there will be some new good things in our lives. We will have found the mute button. Physical distance will have brought us mentally closer to each other in all relationships that really matter. Remote collaborative working will be the new normal. Online signings and closings will be actively in use, no matter how big the transaction or how spread over different addresses the parties are. But some things won’t change. Closing dinners will never feel the same on Skype. Katja Hollmén, Director of Client Relations @KatjaHollmen Do you hear the birds sing? THINKING AHEAD When given the alternative, we typically resort to doing things just like before. Even the best of intentions are poor indicators of our future actions. Threats to old structures may make us feel uneasy. Such is the human brain. We have a tendency to prefer the systems that bring a sense of reliability and familiarity to our lives. Had you asked me two weeks ago for reasons to switch full on to Plan D (all gadgets and tools in use in all client engagements) I would have talked about speed, effi ciency and transparency combined with a sense of tailoring, active listening and frequent interaction. I might have even thrown in my view on the role of digitalisation in reducing the carbon footprint of lawyering. Painting a picture of a crisis in which a pandemic is triggering global recession, our clients’ businesses are experiencing serious disturbances, and people everywhere are not only encouraged to practice social distancing but prohibited from travelling and meetings and even from having printed documents delivered to them by hand, because the person carrying the papers might also be carrying COVID-19? Unimaginable. The word “crisis” comes from the Greek κρίσις – krisis, originally referring to an unstable situation, a testing time, in which the outcome may be worse or better depending on our actions. Throughout history, people have survived crisis and been capable of adapting to a changed set of circumstances. Even the most overwhelming breakdowns may result in breakthroughs but fi rst, a sense of normalcy and stability needs to be established. Under these exceptional circumstances, safeguarding the clients’ business continuity is our fi rst priority. Understanding our clients’ realities and helping their businesses forward through analysing alternatives and fi nding new opportunities is the key. Being able to deliver our services remotely, with the same attention and quality as always before, comes as a good second. P20-Thinking Ahead Since 1899- Right now We just completed fi nal negotiation round of a strategically important deal and had it bargained, reviewed and executed completely online without anyone having to leave their remote offi ces during the last week of the process. Our client was both relieved and very satisfi ed with how smoothly everything went. I’ve personally been awaiting the jump from digitizing everything to true transformation of our working habits for some time already. This pandemic requires most companies to confi gure themselves to remote work, and complete remote capability will change the way we work in the future. We may see transformation of brick and mortar law offi ces with online capabilities into true digital legal service platforms. Anna Haapanen, Partner Innovation Powerhouse D&I ranked TOP3 Project Management Project Staffi ng Strategic Speaking Partner Personal Contacts Forefront in Digitalisation A Culture of Collaboration in times of change In just a few weeks, our daily lives have changed quite a bit. This has also had a great impact on the way we collaborate. Many organizations have switched to a fully virtual work community in just a few days. Here are D&I’s Head of People & Culture, Mikael Ahtokari’s thoughts on fi ve key cultural ingredients to promote in these turbulent times: 1. Whole human beings – Also virtual colleagues should have the opportunity to discuss their feelings, concerns and share daily experiences to understand each other better. As the COVID-19 outbreak hits people in different ways, empathy and compassion is important. 2. Encounters – Create new kind of virtual spaces for lunch, coffee and other informal encounters between individuals, teams and any member of the organization. 3. Curiosity and innovation – A change of context sparks new kind of thinking and energizes people to rethink daily tasks. 4. Digital thinking – What normally may seem as an add-on to everyday processes now moves to the core. Organizations also need to rethink the way they collaborate. 5. Enriched communication – Empathy, listening, two-way communication and timely flow of information is more important than ever. This also builds trust and strengthens a common sense of purpose. Client Understanding Availability & Service Prospera Law Firm Review 2020QUARTERLY Q/1 – 2020 Finnish Act to be aligned with the EU regulation on the screening of foreign direct investments TRANSACTION POWERHOUSE The EU-wide framework for the screening of foreign direct investments (the “Regulation”) entered into force in April 2019, and as of October 2020 it will be applied in its full scope. Consequently, certain amendments are expected to the Act on the Monitoring of Foreign Corporate Acquisitions in Finland (the “Act”). The proposed amendments to the Act include new provisions on, inter alia, circumvention of the Act, disclosure of confi dential information to authorities and cooperation between the Member States. Furthermore, the proposed amendments aim to address the national concerns and practical needs arisen in relation to the protection of vital national interests, such as national defense, critical infrastructure and technologies as well as supply and functions fundamental to society. According to the draft government proposal, the scope of the Act will not be extended. According to the provisions of the Act in force, a confi rmation of Finnish Ministry of Economic Affairs and Employment (the “MEE”) must be applied for as regards all foreign companies’ proposed acquisitions of Finnish companies that produce defense industry products or services or dual use items or services. Additionally, the monitoring extends to transactions carried out by non-EU or non-EFTA companies’ that may have an effect on vital national interests, such as critical infrastructure, security of supply and other functions fundamental to society. According to the Act, a foreign person or entity is any person or entity not domiciled in the EEA as well as any entity domiciled in the EEA where a foreign person or entity has one tenth of the total votes or a corresponding infl uence. With respect to acquisitions concerning the defense sector, including also companies producing dual use items or services, a foreign person or entity is any person or entity not domiciled in Finland as well as any entity domiciled in Finland where a person or entity not domiciled in Finland has one tenth of the total votes or a corresponding infl uence. According to the Act, acquisitions of at least one tenth, one third or half of the total votes or a corresponding infl uence in a Finnish company trigger the threshold of applying for confi rmation from the MEE. Factors that Member States and Commission may take into account According to the Regulation, Member States and the Commission may take into account several factors when assessing whether a foreign direct investment would likely affect security or public order. These factors include the investment’s impact on, among others: • Critical infrastructure whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defense, electoral or fi nancial infrastructure and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure. • Critical technologies and dual use items including artifi cial intelligence, robotics, semiconductors, cybersecurity, aerospace, defense, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies. • Supply of critical inputs, including energy or raw materials, as well as food security. P22-Thinking Ahead Since 1899- The changes are limited and no material changes are expected to the substance. “QUARTERLY Q/1 – 2020 • Access to sensitive information, including personal data, or the ability to control such information. • The freedom and pluralism of the media. Cooperation and exchange of information between the Member States The national confi rmation processes concerning foreign corporate acquisitions which fall under the scope of the Act will likely be prolonged with at least two weeks as a result of the implementation of the Regulation. The national monitoring mechanisms will be supplemented with requirements concerning cooperation and exchange of information between the Member States. The MEE will in the future serve as the national contact point between the Member States and the Commission in order to ensure the effective exchange of information on monitored foreign investments in a Member State and to make it possible for Member States and the Commission to raise concerns related to a specifi c foreign investment. Furthermore, a provision concerning the disclosure of confi dential information to authorities is proposed to be included to the Act. The implementation of the EU-wide framework, however, does not restrict Finland’s national sole responsibility for safeguarding its national security and the fi nal say whether a particular foreign investment will be allowed or not or whether particular foreign investments will be monitored or not will remain at national level. Applicants will be obliged to submit more information when applying for a confi rmation. The application would in the future include, inter alia, the following information: • the ownership structure of the foreign investor and the target company, including information on the ultimate investor and participation in the capital; • the approximate value of the investment; • the products, services and business operations of the foreign investor and the target company; • the Member States in which the foreign investor and the target company conduct relevant business operations; • the funding of the investment and its source; • the planned completion date of the investment; and • the effects on projects or programmes of EU interest. Circumvention of the Act A new provision considering the circumvention of the Act is proposed to be included in the Act. According to the proposed provision, if it is evident that an acquisition or measures, arrangements or other actions with comparable effects have as an objective to circumvent the requirement to apply for confi rmation from the MEE, it must be submitted for the MEE’s review at its request. The proposed provision would apply broadly, for example it would also apply in cases where the MEE has previously approved another foreign company’s acquisition in a Finnish company subject to monitoring under the Act. Security sector corporate acquisitions According to the draft government proposal corporate acquisitions in the security sector would also become subject to the prior confi rmation of the MEE. This would apply to acquisitions concerning companies providing products or services to authorities which are deemed vital for the security of the society. No exhaustive defi nition would be given, but the preparatory works list as examples the Defence Forces, police, customs, National Center for Security of Supply, National Security Authority and the Transport and Communications Agency Trafi com. As a guiding principle for determining a security authority, the authority would have statutory responsibility for safeguarding national safety and public order. Conditional confi rmations Furthermore, the draft proposal contains a new provision that would enable the MEE to impose conditions for the confi rmation of a foreign corporate acquisition and, if necessary enforce the compliance of the conditions with a penalty payment. The possibility for the MEE to impose conditions would be a benefi cial alternative to no confi rmation for the acquisition. Request for comments The MEE is currently requesting comments to the draft Finnish government proposal implementing the Act. Comments can be submitted at www.lausuntopalvelu.fi until 3 April 2020. The draft government proposal on the amendment of the Act is currently available at the website of the MEE in Finnish and Swedish. The objective is that the proposal would be submitted to the Parliament in June 2020 and that the proposed amendments would enter into force on 11 October 2020. Jan Ollila, Senior Partner @JanOllila Tuomas Rytkönen, Senior Attorney @TuomasRytkonen Nita Rautakoski, Associate-Thinking Ahead Since 1899- Key takeaways • The changes brought about by the implementation of the EU dimension to the monitoring of the foreign corporate acquisitions in Finland are limited and no material changes are expected to the substance. • The time required by the national confi rmation process may be somewhat extended. • Sellers and investors should carefully assess whether the target business operates in the defense and security or critical infrastructure sectors and consider the timing for applying for the confi rmation from the MEE. The expected duration of the confi rmation process should be refl ected in the transaction documents. • Certain acquisitions may also be subject to merger control approval and, in case of land acquisitions by non-EEA companies or individuals, the Ministry of Defense. Sellers and investors should consider possibilities to streamline the different processes of applying for authority approval.QUARTERLY Q/1 – 2020 Managing disputes after Brexit DISPUTE POWERHOUSE In the meantime, if you are facing the prospect of a legal dispute with a UK company, you may wish to consider the following currently known key implications of Brexit on the management of disputes. Following the conclusion of the revised withdrawal agreement between the UK and the EU on 17 October 2019 (the “Withdrawal Agreement”), these implications are different to what we highlighted in our previous Brexit article written before the conclusion of the Withdrawal Agreement. The post-Brexit transition period until 31 December 2020 The Withdrawal Agreement between the UK and the EU, ratified on the Brexit date of 31 January 2020, stipulates that most EU law (as amended or supplemented) will continue to bind the UK during the transition period. The transition period will end on 31 December 2020, unless the UK and the EU decide by 30 June 2020 to extend the transition period for up to one or two years. The UK domestic legislation, the European Union (Withdrawal Agreement) Act 2020 (the “WAA”), nevertheless currently prohibits the UK government from agreeing to any such extension. During the transition period, the European Court of Justice continues to have jurisdiction in the UK. Similarly, the EU framework concerning the rules for determination of applicable law (the Rome I and II Regulations), courts’ jurisdiction to hear disputes and enforcement of judgments (the Recast Brussels Regulation) will continue to apply to disputes While the UK left the EU on 31 January 2020, the uncertainty created by the Brexit saga still persists in relation to the management of disputes with UK companies. The negotiations between the UK and the EU concerning their future relationship, including the framework for civil justice and judicial cooperation rules, are only just starting. P26 between UK and EU member state companies in the transition period. Thus, for most purposes, the UK’s exit from the EU will have no real practical legal implications during the transition period. EU law is frozen into UK law after Brexit Pursuant to the UK legislation, European Union (Withdrawal) Act 2018 (“EUWA”) (as amended by the WAA), EU law as in force before the end of the transition period will be retained as part of the UK’s domestic legislation. Retained EU law includes direct EU legislation, EU-derived domestic legislation and directly effective rights of individuals and other rights derived from EU treaties. The EUWA further stipulates that retained EU law is to be interpreted in accordance with retained EU case law and the retained general principles of EU law. Retained EU case law in turn comprises both decisions of the European Court of Justice and judgments of UK courts that relate to EU legislation before the end of the transition period. Brexit has not affected arbitration Brexit has not affected, nor will affect, arbitration proceedings and enforcement of arbitral awards. The UK is and will remain a contracting state to the New York Convention 1958 providing a virtually worldwide framework for the recognition and enforcement of arbitral awards. The domestic Arbitration Act 1996 providing the framework for arbitration in the UK will further remain in force.-Thinking Ahead Since 1899-QUARTERLY Q/1 – 2020 The recent 2018 Queen Mary, University of London and White & Case LLP International Arbitration Survey identified London as the respondents’ most preferred seat of arbitration. The majority of the respondents further considered that the Brexit will not affect the use of London as a seat. However, some arbitration commentators have suggested that Brexit may have already affected the European parties’ perception of London as a neutral seat and arguably fuelled the scepticism towards “an English style arbitration.” It remains to be seen whether Brexit will indirectly affect arbitration in London. Brexit has not changed the substantive governing law rules Brexit has not changed the choice of law rules applicable to contractual and non-contractual obligations that are set out in the Rome I and II Regulations, respectively. These EU instruments also contain rules for the enforcement of parties’ choice of governing law clauses. The Rome I and Rome II Regulations will continue to apply to disputes between UK and EU companies during the transition period. After the transition period, under Article 66 of the Withdrawal Agreement, the Rome I Regulations will apply to contracts concluded before the end of the transition period and the Rome II will apply to events giving rise to damage, if those events took place during the transition period. Moreover, the UK has passed a statutory instrument under EUWA that will come into force at the end of the transition period and will give effect to the substantive rules in Rome I and Rome II Regulations as a matter of domestic law.-Thinking Ahead Since 1899- Accordingly, the parties may consider choosing English governing law for the same reasons as they did before Brexit. English law is often chosen because of its fl exibility and because the rules of contractual interpretation do not allow evidence of parties’ subjective intentions to be taken into account; the parties generally get what they have written in their contracts. English law has also gained a strong dominance in certain industry sectors, such as fi nance, banking and insurance, due to well- established case law in the fi eld. In contrast, it may not be advisable to choose English law in circumstances, where the parties agree that the courts of an EU member state have jurisdiction over their dispute and/or the agreement is concluded before Brexit and it concerns a certain regulated activity under EU legislation. The rules concerning jurisdiction and enforcement of judgments remain the same during the transition period The Recast Brussels Regulation, which provides for a largely automatic process of determining which court has jurisdiction over a dispute between parties from different EU member states as well as for recognising and enforcing judgments between EU member states continues to apply to disputes with UK companies during the transition period. The 2007 Lugano Convention, which contains similar rules that apply to disputes between parties from EU and EFTA member states, also continues to apply during the transition period. Moreover, the EU Enforcement Order, which provides for the enforcement of uncontested claims, applies during the transition period.Next >