April 2010 was a celebrated month for China Eastern Airlines Corporation Limited, the country’s top-three carrier listed on the Shanghai, Hong Kong and New York Stock Exchanges. Apart from reporting an 18-fold year-on-year surge in first-quarter profit following the successful merger with Shanghai Airlines, the company signed an initial agreement to join the SkyTeam alliance. And on 16 April, its in-house legal department was awarded “Chinese Company In-house Team of the Year” at the 2010 ALB China Law Awards for its outstanding achievements across the full spectrum of in-house legal responsibility. It’s an extraordinary recognition, taking place against the backdrop of a turbulent year in the global aviation industry.
“The award is a great honour and an achievement for which our team can be justly proud,” says Guo Lijun, general manager of the legal department of China Eastern Airlines, in his office in Shanghai’s Hongqiao International Airport. “This prestigious recognition comes in a year of significant milestones for the in-house department, which recently reached its first-year anniversary as a separate functional unit in the company.”
Yet although the legal department is merely a year old, having been officially established last April, the in-house team’s history dates back a couple of decades. Guo, who joined the company in 1994, has witnessed the evolution of the nature of the in-house legal function and its standing within China Eastern Airlines. “The legal department is now regarded as critical as [the] finance and audit departments in our company. It’s a cost-effective and expert resource for all the company’s legal affairs. Its influence is on the rise in every stage and aspect of the company’s operations,” he says.
However, he recalls that when he first came on board there were only three legal staff, and the majority of the company’s employees didn’t even know about the existence of the legal team, nor their responsibilities. “It has come a long way since then. Several key turning points have taken the in-house legal team to where it is now. The company’s public float in Hong Kong, New York and Shanghai in 1997 is one, and the parent group’s appointment of a general counsel in 2007 is another,” Guo says.
“The combination of adverse market conditions in the past few years and the company’s business expansions at home and abroad has triggered a substantial increase in legal needs. The company has been swift to realise that having a separate, dedicated legal department is imminent,” he adds.
|CHINA EASTERN AIRLINES – QUICK FACTS
About the legal department:
- Established 2009
- General manager: Lijun Guo
- Number of staff: 22
- Main practice groups: contract review and compliance, litigation and arbitration, general corporate, international affairs
- Most used law firms: O’Melveny & Myers, Baker & McKenzie,
- Davis Wright Tremaine, Allbright, Grandall and Shanghai Hongiao Zhenghan
- Awards: “Chinese Company In-house Team of the Year” by the 2010 ALB China Law Awards
- assisted the company successfully raising RMB$14bn through A-share and H-share equity placements
- advised on the absorption of Shanghai Airlines via share swap – a high-profile and complex transaction involving RMB$16bn asset acquisition
- participated in more than 50 aircraft transactions with a total value of US$10bn
- involved in the negotiation and preparation of the company’s merger with SkyTeam
- compiled a comprehensive anti-trust and competition
- compliance manual for all of its employees, providing key information on antitrust and competition laws in major jurisdictions, including US, Europe, Japan, China and Australia
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