India Business Law Journal – December 2015/January 2016

Out with the old, in with the new

From road congestion to courtroom backlogs, fresh ideas are afoot to get India moving

While 2015 was dominated by doubts over the abilities of India’s policy makers to effect meaningful change, the new year comes with renewed hope that new ideas can take flight. The much lauded odd-even scheme that is being implemented to curb traffic on Delhi’s bursting-at-the-seams roads has shown that policy makers can think out of the box and that politicians have the wherewithal to implement change, even in the face of public scepticism and powerful opposition.

Can such audacious thinking be repeated in other areas? The existing state of affairs – be it in the legal and regulatory realm or infrastructure or public health – cannot continue. India needs more success stories like that being scripted in Delhi.

This issue’s cover story provides grounds for optimism that change may be afoot on several fronts. In an exclusive interview with India Business Law Journal’s editor, Vandana Chatlani, India’s law secretary, P.K. Malhotra, says that the country’s legal market will open as soon as safeguards that “everybody is looking for” are in place. Malhotra says the Bar Council of India is in consultation with the state bar councils regarding a suitable regulatory framework. Once this has been finalized and when the government believes it is “in line with constitutional and statutory provisions, we will give it the go-ahead,” he says.

But when will this happen? Malhotra says that the government is “expecting this to happen very soon”, but as the joint secretary for commerce, Sudhanshu Pandey, who was also interviewed, pointed out: “There are certain asymmetries which the Indian legal system suffers from and they need to be addressed before we open up.”

India Business Law Journal’s interview with Malhotra and Pandey also touched on the ever-present challenge of dispute resolution in India. This is an area where progress has been made with recent amendments to the Arbitration and Conciliation Act, 1996, in the form of the Arbitration and Conciliation (Amendment) Ordinance, 2015. Commenting on one of the key changes, the introduction of a strict time limit for arbitral awards, Malhotra said: “No country, to the best of my knowledge, has made a law where they can debar for a number of years an arbitrator who delays the disposal of a case.” This is a remarkable development, and along with other amendments, it could be transformational for India’s arbitration regime.

In Back to the drawing board we investigate how such a transformation may trigger a rethink of overall dispute resolution strategies. For decades the threat of arbitration has been used as the first intimation of a dispute. But now, under the new regime, it marks the firing of the first bullet, an irreversible action that should be taken only as a last resort. This is a significant change that will require fresh thinking from all concerned.

Other changes that may be afoot in India are discussed in this issue’s extended Vantage point, where four in-house counsel and the president of the Society of Indian Law Firms present their predictions on the developments that will shape India’s business climate in 2016. Despite jitters over the health of the global economy and the slowdown in China, cautious optimism about India’s prospects prevails. Yet our commentators also highlight danger areas and challenges that must be addressed.

Vijayashyam Acharya, the director of legal and compliance at OnMobile, believes that the focus on legislative and structural reform has been disrupted by “the disproportionately high amount of time, attention and resources the prime minister is devoting to promote India’s image overseas”. Naveen Raju, the general counsel and senior vice president of group legal services at Mahindra & Mahindra, expresses concern over the lack of momentum for reform and says that “the government’s investment in key infrastructure has not matched its announcements and policies”.

While our five commentators highlight some of India’s deficiencies, this issue’s What’s the deal? celebrates many of its achievements with a round-up of the top 50 deals and dispute resolution cases of 2015. Following an extensive shortlisting process, the featured deals were chosen by our editors not only for their size in monetary terms, but also for their complexity, innovation and the precedents that were set. While analysing the significance of each deal, our coverage identifies the law firms and lawyers who guided it through its many twists and turns. This information will be particularly valuable to in-house counsel whose companies are contemplating similar transactions.

Finally in this issue of India Business Law Journal, in a flourish of festive fun we indulge in a light-hearted look at the non-curricular activities of foreign lawyers in India (The India diaries). While striking deals may be their primary objective on business trips, many also find time to enjoy the charms and chaos that India offers in abundance. So, while Jamie Benson, the head of Duane Morris & Selvam’s India practice, looks forward to playing in the bankers versus lawyers charity cricket match, Pallavi Mehta Wahi, the co-head of the India practice at K&L Gates in Seattle, enjoys eating butter gravy and visiting Dilli Haat, an open-air food fair in Delhi.

Asked if he would change anything, Alasdair Steele, the head of the India group at Nabarro, said he would like free-flowing traffic. This may be possible, at least in Delhi, if the odd-even scheme is successful. And with that, we wish all our readers a successful and free-flowing new year!