Societies and economies are being crippled by a lack of trust
The protests that have hit countries across the globe in recent months are in some way emblematic of the deep distrust and suspicion that has taken hold in their societies. While segments of society battle each other, economies and livelihoods have taken a hit. In addition, be it in the UK where the Brexit saga rolls on, or closer to home in Hong Kong, where the India Business Law Journal is based, families and friendships on either side of the deep ideological divide are being torn apart.
The erosion of trust may prove to be the single largest obstacle to negotiating an end to the uncertainties and unrest. While shoring up confidence in and among stakeholders will not happen overnight, having in place a leadership that is endowed with the requisite wisdom and tact will help. This can seem like a tall order, but may ultimately be the only way forward.
In India, a trust deficit is currently being blamed for several of the country’s problems including the current economic slowdown. Confidence in many groups from regulators and bankers to healthcare and education providers has been dented and as yet little is being done to address this. This invisible crisis will have long-term effects.
This month’s Cover story looks at mediation, which recently received a boost as an instrument of resolution in cross-border disputes. India was one of 51 countries that recently signed a United Nations Convention on International Settlement Agreements Resulting from Mediation, which when it is ratified would provide an alternative to the expensive and time-consuming court or arbitration proceedings that are currently used for resolving cross-border disputes. While there are currently legislative and other attempts to bring in an element of mediation into the resolution of domestic disputes, enabling the direct enforcement of cross-border settlement agreements will be more than welcome. This is especially so given the huge number of cases pending before Indian courts and the need to ensure that commercial disputes do not clog up the system any further.
In Open for business, we turn the spotlight on the recent tweaking of rules for foreign investment that has included allowing 100% foreign direct investment in contract manufacturing and relaxing regulations on local sourcing for foreign investment in single-brand retail trading. India has been wanting foreign players to “Make in India” and sell not just in the country but also externally, and these relaxations may well be just what the doctor ordered for the sector.
There is, however, no such luck for foreign players hoping to enter India’s legal market. International law firms continue to wait and watch for signs that the market will be liberalized. This issue’s Spotlight is a conversation with Milton Cheng, the recently elected global chair of Baker McKenzie, which has 300 lawyers involved in India-work. He tells India Business Law Journal that the firm “will definitely want to be at, or near, the front of the queue of people waiting to go in” as soon as the market opens. Speaking about his plans for his four-year term, which began in October, Cheng, who is the first Asian to chair the firm, says he is hopeful of seeing “some liberalization” in what is the second term of the Narendra Modi government.
This month’s What’s the deal? is a follow-up on a subject that we devoted an entire issue to exactly a year ago: the #MeToo movement and what is being done through the legal system and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to attain respect for women in the workplace.
While these are early days for the courts to rule on the act – only a handful of judgments have interpreted the act in the six years since it was implemented – our current article analyses how courts are dealing with prosecutions and also issues facing internal complaints committees following incidents of sexual harassment in the workplace.
Writing in this month’s Vantage point Nitin Mittal, the head of legal and company secretary at Signify India, welcomes recent moves to decriminalize violations of corporate and tax law. Asking if non-compliance with commercial laws entails a criminal intent coupled with a public wrong, and whether a criminal sanction should be imposed for an action that is not defrauding the public or harmful to the society at large, Mittal is all for a distinction between regulatory and administrative violations vis-à-vis more serious public crimes. The bottom line, as Mittal says, is that there is no proven evidence to suggest that criminal sanction reduces the propensity of non-violations in business.
This month’s Intelligence report reveals the Rising Stars of India’s legal profession. Our coverage highlights 50 law firms that are on the ascent. This is the third year that we have researched the universe of medium and small firms that clients turn to for external counsel when seeking it from outside the market leaders. As expected, competition within this section of the market is intense, yet some firms show more potential than others. Typically, these are firms such as Bengaluru-based MD&T Partners, which is lauded for “always going the extra mile” for its clients.