In preparation for the rise of rapid urbanisation and megacities in emerging economies across the Asia Pacific, Baker McKenzie has released a guide to help businesses navigate their way through a myriad of changes and differing regulatory regimes.
The Guide provides an overview of regulatory issues which arise in commercial contracts in the Asian engineering and construction sectors and the extent to which those issues present barriers to cross-border business in the Asia Pacific region.
Construction in emerging markets, including some of Asia's fast-growing markets, is expected to double within a decade and will become a $6.7 trillion business by 2020, accounting for some 55 per cent of global construction output (according to the 'Global Construction 2020' report published by Global Construction Perspectives and Oxford Economics).
In response to this incredible projected growth, Baker McKenzie's Asia Pacific head of construction, Anthony Whelan, said businesses shouldn't underestimate the wave of construction to come, especially when factoring in China's One Belt Road initiative.
"In this climate, issues regarding the interpretation and enforceability of contracts in the region become increasingly complex, given Asia’s diverse legal traditions (civil law, common law and mixed) and differing approaches to commercial issues,” he said.
“The Guide will help in navigating the legal and commercial interpretation of contracts under civil and common law and potential pitfalls to look out for when contracting in Asia.
“For example liquidated damages clauses, dual language contracts, termination rights and dispute resolution requirements."
Another example is security of payment legislation which is gradually being rolled out across the common law jurisdictions in the region. It provides protection for contractors and is currently being introduced in Australia.