India Business Law Journal – December 2023/January 2024

Justice delayed is justice denied

Old disputes a bane for judges, clients and lawyers

India is grappling with a massive backlog of court cases, exemplified by the recent disposal of the country’s oldest case – after 72 years. More than 3 million cases in India are 10-20 years old, with half a million exceeding 20 years.

The delay in the delivery of justice in India exacerbates the plight of millions entangled in pending cases. Prolonged legal proceedings contribute to prolonged suffering, financial strain, anguish and uncertainty.

The lack of access to courts, and to judicial remedies, further impedes access to a timely resolution, undermining the essence of justice and eroding public trust in the fundamental tenets of our legal system.

Our Cover story, titled Gathering dust, highlights how the burden primarily falls on district courts, constituting more than 85% of pending cases. Land and property disputes, in addition to cases filed by the government, contribute significantly. The shortage of judges, slow bureaucratic appointment processes, financial strain and misuse of legal procedures further compound the issue.

While there is no panacea, remedies can be taken. Proposed solutions include periodic reviews, the discarding of obsolete cases, and addressing dynamic areas like IP, where disputed patented technologies can turn redundant over time.

The article highlights an urgent need for collaborative efforts essential for a streamlined and efficient justice delivery system.

This issue’s Intelligence report covers our In-House Counsel Awards 2023-24, now in its third year, which celebrates the individuals and teams that are driving success in India’s corporate legal landscape.

Recognising the role of in-house counsel, the awards acknowledge their contributions in advising management teams, mitigating business risks, and skilfully navigating the complexities of serving various stakeholders while dealing with government entities.

Of particular note is Shagoofa Khan from the National Investment and Infrastructure Fund (NIIF), who was chosen as General Counsel of the Year. Khan manages a lean team and his work included advising and executing the steps for the first CEO succession in the funds industry; and supporting one of the largest exits in the minority investments segment in India. He is regularly appointed to the Securities and Exchange Board of India’s working groups.

The in-house counsel steering YES Bank’s legal department played a big role in his team being chosen as this year’s In-House Legal Team of the Year. This group of top lawyers played a pivotal role in charting the bounce-back for the once troubled bank.

India Business Law Journal spotlights these corporate heroes and others, showcasing their talent and qualities via interactions with their nominees.

Our Vantage point offering this issue, titled Building an infrastructure superhighway, is by Mukul Shastry, the GC of Cube Highways and Transportation Assets Advisors, a man of considerable expertise. He provides a roadmap that policy makers and regulators would do well to consider, given that the infra sector holds immense potential to propel India to a USD10 trillion economy by 2035 if legal and regulatory challenges are overcome.

The challenges include regulatory hurdles, environmental, social, and governance (ESG) considerations, technological issues, and disputes or contract enforcement. Obtaining approvals and permits, inconsistent policies, evolving ESG norms, and inadequate dispute resolution mechanisms are key concerns.But Shastry proposes workable solutions including: shifting the responsibility for obtaining approvals to concessioning authorities; ensuring uniform laws; and creating an infrastructure regulator.

These measures aim to boost investor confidence, streamline processes, and facilitate the sector’s pivotal role in India’s economic growth. This article is a must read for those in the sector with an eye on India’s future success.

In What’s the deal?, we cover the potential trouble for banking and non-banking finance companies (NBFCs) in the wake of the Reserve Bank of India’s (RBI) directive that aims to curb the evergreening of loans.

This directive has created challenges for banks and NBFCs attempting to transfer or sell holdings in alternative investment funds (AIFs). The directive mandates regulated entities should liquidate their AIF investments within 30 days or make 100% provisioning should the AIF’s downstream investments be in a debtor company of the regulated entity.

Industry experts argue the approach may negatively impact the AIF ecosystem, and that its retroactive application raises actionable constitutional concerns.

In an Expert briefing, our authors share details about key IP strategies emerging in the automotive industry. Collaborative agreements such as joint ventures, which are prevalent, require careful structuring to address issues such as third-party conflicts and transfer pricing. However, the sector faces other challenges like trademark infringement due to counterfeit parts. The authors call on companies to proactively take legal measures against counterfeiters and place standardised regulations at custom houses.