India Business Law Journal – September 2010

Rebuilding bridges

One lesson to be learned from the unfolding saga of Delhi hosting the Commonwealth Games is that there are many different Indias

There is the India that the West turns to for everything from online maths tutors to computer programmers, and another that is home to one-third of the world’s illiterate people. There’s the India that built an entirely new airport terminal in just 37 months, and another that is attracting international criticism for its shambolic oganization of the Commonwealth Games. But in a country in which more people have access to mobile phones than toilets, perhaps contradictions such as these are to be expected.

While India scrambles to build bridges between its divergent and sometimes discordant realities, domestic and international businesses are constantly reminded of the risks of operating in such a diverse environment.

As recent events in Delhi reveal, even insiders and those who should know better struggle to operate in the India that is opaque and impervious to deadlines. How else can it be that with just days to go before what was to have been a celebration of a confident India, the country has had to endure the sullying of its image?

India’s sports men and women may well be saying “we told you so”. For until now, they have been alone in paying the price for the country’s antiquated sports laws and dysfunctional sports administration. The majority of sports are controlled by autonomous and unaccountable – yet in many cases publicly funded – bodies, often headed by elderly politicians who have held on to their unpaid but powerful positions for far too long.

As our timely Cover story reveals (Let the games begin), athletes and lawyers are beginning to challenge the status quo. They have turned to the country’s courts and powerful Right to Information Act in their fight against cronyism and corruption in sport. Previous attempts at reform met with little success, but with Indian sport now in the glare of global media attention, the games off the field could be about to hot up.

If the Commonwealth Games was organized by one of the many different Indias, the redevelopment of Delhi airport was most certainly organized by another. For despite being beset by legal, financial and social problems, the project triumphed. Visitors arriving in Delhi for the Games are stepping from their aircraft into a modern, world-class passenger terminal. Is this the same India that was responsible for building the athletes’ village?

The Commonwealth Games is perhaps old India’s last hurrah. Delhi airport, on the other hand, is a shining example of what can be achieved by the new one. Writing in this month’s What’s the deal?, Priyabrat Tripathy, who was part of the in-house legal team on the airport development, offers valuable insights into how his company beat the odds to achieve what many thought was impossible. Tripathy tells of the many challenges that had to be overcome and offers a behind-the-scenes glimpse at how the project was structured, financed and executed.

His insights are complemented by those of Hemant Sahai, a Delhi-based lawyer who played a key role in finalizing the concession agreement for the airport privatization, and who has subsequently worked on the drafting of a model concession agreement to be used for future projects.

As a counterpoint, the author of this month’s Vantage point (Look before you leap) provides valuable advice on what not to do when investing in India. Ngangom Junior Luwang, a partner at Kochhar & Co, discusses the problems facing British mining group Vedanta and argues that many of them are of the company’s own making. He criticizes Vedanta for failing to conduct thorough due diligence and offers invaluable insights to those contemplating similar projects.

As Indian companies expand their international footprints, a growing number are using New York as a base from which to access attractive US funding opportunities and gain entry to the US market (Spotlight). This has resulted in a boom in India-related work for New York’s lawyers and a scrabble by Indian lawyers to qualify to practise in the state.

A New York state bar admission is an impressive credential for an Indian lawyer. However, many of the country’s leading law firms are looking closer to home for ways of enhancing their competitiveness. In this month’s Intelligence report (Managing the business of law) we investigate the steps that Indian law firms are taking to implement best-practice management, marketing and strategic planning. We also ask who is best-equipped to spearhead such a task – a senior partner, a specialist consultant or a professional business manager?

Our coverage finds that Indian law firms are increasingly warming to the services of specialist consultancies that can assist them with everything from business development to the overhaul of remuneration structures. Some of the more traditional law firms have yet to be convinced that outside expertise can be helpful, but attitudes are slowly changing. For India’s legal profession, like the rest of the country, is striving to attain international standards of best practice and take its place on the world stage.

Mega projects like the Commonwealth Games and Delhi airport are manifestations of this endeavour. Whether they succeed in bridging the gap between the many different Indias, only time will tell.