India Business Law Journal –  September 2020

Better days in sight?

Focusing on the fundamentals

Private equity-led investments that have been flowing into some sections of corporate India in the past month or two must surely be a silver lining to anticipate, even while in the depths of this pandemic. While the whys and wherefores of this interesting phenomenon will provide ample fodder for analysts, it is also necessary to recognize the volatility and fickle nature of the private equity market.

If there is any lesson that the current pandemic is imparting, it is that we must get the fundamentals right, be they economic, or with regard to the legal and regulatory framework, or any other.

It should go without saying that corporate activity does not happen in a bubble. When a country’s economy is in trouble, chances are the same will apply to the fortunes of the companies that are located in the country. None of this is rocket science, and the earlier we recognize and internalize this, the better it will be for companies, and for society.

This month’s Cover story analyses the recent decision reached in international arbitration in the Vodafone tax matter. For many, it involves questions that go to the heart of what is referred to as the arbitrariness that confronts investors in India. For others, it is about the Indian government having the right to tax the sale of an Indian company, especially when the buyer had sought the approval of the government before making the acquisition. Be that as it may, chances are this tax saga will continue, and whether it will produce any winners only time will tell.

In Evolving doors we turn the spotlight on an important by-product of corporate sentiment during this pandemic – a reluctance to opt for litigation as a means of resolving disputes. This has triggered new opportunities for arbitrators, and practitioners of alternate dispute resolution in general, which is typically being conducted online.

As a result, even as the cost of arbitration appears to be coming down, it is also becoming quicker due to less wastage of time in travelling and visiting arbitration centres. Chances are, even when we emerge from the pandemic, alternate methods of dispute resolution, especially those conducted online, will be here to stay as a permanent solution.

This month’s What’s the deal? focuses on negotiation skills, which are often seen as critical for a lawyer. The reality is that a single negotiation can make or break the prospects for any enterprise, and it is vital that negotiation strategies be customized to address ever-changing scenarios.

Negotiations in India are typically protracted, and do not lead to a quick and easy conclusion. A major factor for this is that negotiations are often driven by an excessive reliance on hierarchy and blighted by an ingrained culture of doing an extensive analysis of the subject matter. Be that as it may, being a good negotiator requires people skills, well-ordered priorities and also a positive approach to doing business.

Writing in this issue’s Vantage point Nitin Mittal, head of legal and company secretary at Signify India, says that the pandemic has transformed the professional landscape for general counsel. The writing on the wall warns that they need to evolve. The pandemic has added new perspectives to the parameters of a general counsel’s role, and as a result of the changed environment they are need to be agile, digitally savvy and much more collaborative.

They can either grab the opportunities that have presented themselves in these difficult times to transform themselves, or be rendered irrelevant. Harsh choices, some would argue, but we are living through unexpected and stressful times.

This month’s Intelligence report zeroes in on a community of people who have risen to the challenge of the moment – advocates and court administrators who in courts across India are navigating technology and the technicalities of virtual courts like never before.

In providing this report, we are continuing with a theme from the previous issue of India Business Law Journal. This report explores whether enough is being done to ensure the smooth functioning of the courts and access to justice. The reality is that behind the din of varying opinions, the case backlog confronting India’s courts continues to grow.

A common complaint in the past five months has centred on how many courts list and prioritize urgent matters. But how is urgency to be proved? According to lawyers who work in litigation, doing so has been a challenge and parties can wait seemingly indefinitely for their cases to be heard.

This may be a time for litigants to explore the possibilities of mediation or out-of-court settlements wherever possible. There are also concerns about smaller courts and tribunals simply not having the resources to move to online hearings, all of which is entirely understandable given the challenging times we are in.