Recently, BZW Law Firm’s partner, Philip Qiao, and his team successfully represented a listed company client in a complex cross-border equity incentive dispute arbitration case involving a VIE structure, achieving a positive outcome and effectively safeguarding the client’s legal rights and interests.
The dispute in this case arose from an early equity incentive agreement. Due to the company’s subsequent development and overseas listing, the equity held by the relevant personnel in the domestic company was converted into shares of the overseas listed company. A dispute arose between the parties regarding the validity and applicability of the equity repurchase clauses under the previous incentive agreement. The handling of this case was not only of great significance to the client’s interests but also serves as a valuable reference for similar enterprises dealing with historical equity incentive issues.
Faced with the complexity of the case, the BZW law team started by clarifying the evolution of the nature of equity under the VIE structure. They conducted an in-depth analysis of the changes in the relevant legal entities and, combined with cross-border legal practices, presented professional and compelling legal opinions on the applicability of the relevant clauses of the original incentive agreement after the company’s listing. The team emphasized that with the company’s listing, the legal attributes, valuation basis, liquidity, and regulatory environment of the equity had undergone fundamental changes, and the basis for the performance of the original agreement no longer existed.
After the hearing, the arbitral tribunal took into consideration the core legal arguments presented by the legal team in its award, which ultimately strongly supported the client’s position. The successful handling of this case not only prevented potential economic losses for the client but also highlighted BZW Law Firm’s professional service capabilities in handling complex cross-border commercial arbitrations, especially in areas involving corporate law, securities law, and legal conflicts across multiple jurisdictions.
