India Business Law Journal – April 2010

The sky’s the limit

The ArcelorMittal Orbit, a massive steel structure that will tower over London’s Olympic stadium, will be more than just a symbol of the 2012 Olympics

While its financier, Lakshmi Mittal, sees it as “a bold, beautiful and magnificent sculpture that also showcases the great versatility of steel”, to its designer, Anish Kapoor, it is “a folly” albeit with aspirations. To most others, however, this British tower being created by two Indians is symbolic of the ties that bind both countries, an underlying theme in many of the reports in this issue of India Business Law Journal.

The day that plans for the tower were unveiled, another success story from India was making its mark on London’s landscape. KSK Power Ventur, a growing player in the Indian energy sector, made a sideways move to the prestigious main market of the London Stock Exchange from the less demanding alternative investment market (AIM). In What’s the deal? (Aiming higher) legal advisers Nikhilesh Panchal, Vikas Kumar and Madhur Kohli from Khaitan & Co, chart the company’s leap and explain why London continues to occupy a prime position for capital raising by India Inc.

The affection between India and its ex-colonizer stretches across decades, divides and diverse fields. But is this fondness a vague nostalgic memory of a shared history gone by? Is India’s bilateral partnership with Britain fading and out of date? In our Cover story (In a pickle) India Business Law Journal’s editor, Vandana Chatlani, raises crucial questions about London’s pre-eminence as a launch pad for Indian companies going global. Her report details the threats faced by London lawyers; from Singapore’s new arbitration quarters, Hong Kong’s finance specialists and India’s dealmakers themselves. She examines whether the city’s depth and breadth of expertise is enough to attract the attention of bullish Indian businesses breaking out of the local market to conquer new territory. Whether London’s robust rule of law, mature markets and geographical positioning can satiate India Inc’s voracious appetite is questionable. More importantly, whether India even needs London’s assistance to realize either its domestic or global ambitions is questionable. Norton Rose partner Madhavi Gosavi’s comment that “everything is being financed locally now”, suggests India can go it alone.

And why shouldn’t India take the reins and determine its own fate at a time when London has problems of its own to resolve? Toby Greenbury, a director of the UK India Business Council and co-head of the India group at Mishcon de Reya, writing in Vantage point (Seize the opportunity!) focuses on the changed realities. While India has bounced back “the immediate future for the West looks, by contrast, pretty gloomy”. He urges British businesses to take risks and trade the UK’s depressed and saturated market for new visions in a flourishing India. Forcefully making a case for the UK’s need to “leverage its unique position to power inward investment into India”, Greenbury urges all lawyers to “spread the word and educate and encourage UK-based businesses to look at India more strategically.”

The revival of India’s real estate sector is certainly one avenue of opportunity for foreign investors. Having reached rock bottom, the Indian real estate sector has rapidly regained momentum, climbing out of the abyss it fell into during the global financial meltdown. As our in-depth report in this month’s Intelligence report (Rebuilding value) reveals, the revived fortunes of property companies are prompting reconsiderations for public offerings. Real estate projects are back on track, however, pitfalls remain and complex regulations continue to confound the eager investor. Despite this Vasant Prabhu, vice-chairman of Starwood Hotels & Resorts Worldwide, sees India becoming the global hospitality company’s number one market if it can find the right local partner.

India’s renewable energy sector is also gaining great momentum. In a Spotlight (The greening of India) energy specialist Bob Nelson, of Akin Gump Strauss Hauer & Feld, draws on his long experience of the Indian power sector and reports on what India is doing to develop solar energy. While reminding us that “India has a legacy of unreliable and insufficient power”, he describes a scenario where government and business leaders realize that the development of solar energy makes sense both from a business and environmental point of view. As a result the government has stepped up its efforts to establish itself as a global leader in solar energy, opening opportunities for both domestic and international companies and investors. However, the key to solar power flourishing in India will be consistent and predictable government policy.

Another Spotlight (Under attack) returns to a theme that continues to preoccupy the Indian legal market: whether foreign lawyers should be allowed to practise in India. A writ petition filed before Madras High Court has asked concerned authorities to be more than “mute spectators” and clamp down on illegal foreign practices in India. Of the 30 law firms named in the writ, the majority appear untroubled, denying any wrongdoing. And although Indian lawyers remain divided by the case, several agree they deserve greater protection from the Bar Council.

Given that the last challenge to foreign law firms took 14 years to be decided, there should be many more twists and turns to come. Whether they will be as spectacular as those in the Anish Kapoor masterpiece, only time will tell.