In August 2016, China Calxon Group Co., Ltd. (Calxon), represented by King & Wood Mallesons, was awarded a favorable final judgment on its equity transfer dispute with Asia Pearl Limited (Asia Pearl) involving RMB 810 million. The case was tried at the Hainan Provincial Higher People's Court first and finally by the Supreme People's Court. The final judgment, which has taken effect, is consistent with Calxon’s commercial intents. It’s a typical contractual dispute arising out of the transfer of equity between real estate companies for acquiring land use right, which is of great reference value.

Calxon and Asia Pearl entered into an Equity Transfer Agreement on 25 June 2010 and a Supplementary Agreement on 26 June 2010. In performing the agreements, Calxon found that the Hainan Wealfond project under the deal had not been validly approved, with the nature and the planned purpose of the land plot incompliant with the agreements, and that the preliminary opinion on the construction planning permit or design essentials could not be obtained in accord with agreed terms. In addition, Asia Pearl failed to clear off the economic disputes with the residents over the land to be acquired for development, failed to pay off its debt due to Hainan Wealfond, and concealed its pending lawsuits, all in breach of the agreements. The parties held prolonged negotiations over the implementation of the agreements, but reached no agreement. On 18 November 2013, Asia Pearl filed a lawsuit against Calxon in the Hainan Provincial Higher People's Court.

KWM responded to the lawsuit on behalf of Calxon. Based on circumstances that Asia Pearl’s breach of contract, performance of the agreements, and the status quo of the Hainan Wealfond project, KWM issued a notice to Asia Pearl to terminate the Equity Transfer Agreement, and filed a counter-claim against Asia Pearl in the Hainan Provincial Higher People's Court surrounding the termination of the Equity Transfer Agreement. Asia Pearl subsequently claimed to declare Calxon’s termination notice invalid. On 28 May 2015, the Court, after hearing the two cases in combination, handed down its first-instance judgments, rejecting all of Asia Pearl’s claims. According to the judgments, the Equity Transfer Agreement was to be terminated, Asia Pearl was to refund the equity transfer paid together with any interest thereon, and Calxon was to return the transferred equity. Asia Pearl appealed the judgments to the Supreme People’s Court.

On 5 August 2016, the Supreme People's Court decided in its final judgments to uphold the first-instance judgments in Calxon’s favor. So far, KWM has helped Calxon achieve all of its litigation objectives.

The case was led by KWM partners Qian Yaozhi, Liu Lingyun, Wu Jun and Xu Huying