MAY JUN 2024 LOOKING AHEAD TO MODI 3.0 Bingqing Wang Rankings Editor Rowena Muniz Copy & Web Editor John Agra Senior Designer Rozidah Jambari Traffic / Circulation Manager Krupa Dalal Sales Manager (91) 87 7967 7503 Ranajit Dam Managing Editor Amantha Chia Head of Legal Media Business, Asia & Emerging Markets Nimitt Dixit Asia Writer Prime Minister Narendra Modi has secured another term, though with a slimmer parliamentary majority than expected. This could constrain his ability to implement ambitious economic reforms to turn India into a global manufacturing hub. Modi had campaigned on a pro-business agenda of relaxing restrictive labour laws, offering subsidies to boost domestic production, and lowering import taxes. However, with a weaker mandate, he may face greater opposition in pushing through these changes. Acquiring land for industrial use and enacting national labour reforms requires cooperation from state governments. A diminished majority makes this more difficult. And then there is his much-vaunted infrastructure drive, which, as Nimitt Dixit explains on P. 6, received a jolt from the weaker election performance. Lawyers will be pivotal in guiding clients through whatever pro-business policies do get implemented and ensuring they comply with India’s legal frameworks. The profession must carefully navigate both the economic opportunities of Modi’s agenda and the legal pitfalls. For foreign investors, a third Modi term maintains a pro-business leader committed to economic reforms and courting international companies. However, his diminished political capital injects uncertainty. Investors may need to temper expectations, while closely monitoring which reforms gain traction. Legal advisors will be crucial for navigating India’s evolving regulatory landscape and capitalising on new opportunities that emerge. Flexibility will be key as Modi feels out the limits of his mandate. – RANAJIT DAM

2 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE MAY-JUNE 2024 In the spotlight ALB INDIA TOP PE/VC BOUTIQUE FIRMS 2024 Emerging as pivotal players in India’s vibrant investment landscape, boutique private equity and venture capital law firms are gaining recognition for their significant role. These firms provide essential legal services and strategic counsel, supporting both investors and start-ups. Their expertise fosters innovation and economic growth, ensuring India remains a prominent force within the global start-up ecosystem. LIST BY ASIAN LEGAL BUSINESS, TEXT BY BINGQING WANG Image: PopTika/ Aarambh Legal Ahlawat & Associates AP & Partners Bombay Law Chambers Burgeon Law JMP Law LawKNIT Partners Lex Consult LexStart Partners NovoJuris Legal Pioneer Legal Quillon Partners Spice Route Legal Stratage Law Partners Triumvir Law dynamic environment, providing essential legal services and strategic guidance. Its expertise in navigating complex transactions and understanding market dynamics has been instrumental in supporting both investors and start-ups. India’s private equity and venture capital landscape in 2023 has been marked by significant shifts and a robust build-up of uninvested capital, despite a downturn in the start-up segment. A specialised PE/VC law firm has been crucial in this

3 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM METHODOLOGY Several key factors are considered in the selection process for the listing: • Firms must have a demonstrably established presence in the Indian legal landscape, focusing primarily on the legal complexities of PE/VC deals and related matters. • Preference will be given to boutique firms with smaller partnership structures, as this fosters nimble responsiveness and personalised client attention. • Extensive experience and successful track record in handling complex legal matters across various sectors relevant to PE/VC transactions are essential. • Recognition and standing within the legal community for excellence in PE/VC-related matters is significant. • Emphasis is placed on firms with a reputation for prioritising client satisfaction and achieving successful outcomes in dealing with complex PE/VC legal challenges. This firm drives innovation and economic growth, ensuring India remains a key player in the global start-up ecosystem. Established in 2019, AP & Partners helps Indian tech start-ups navigate critical transactions like mergers and acquisitions (exits) and securing funding (fundraising). Its experienced team tackles complex deals across industries. A recent success includes facilitating $17 million in Series A funding for Toddle, a company developing tools for teachers. Its commitment extends beyond the tech sector. AP & Partners recently advised SitusAMC, part of the Stone Point Capital portfolio, on a complex $250 million business transfer involving the commercial real estate valuation business of Situs Group to Altus Group. This transaction impacted over 100 Indian employees who transferred to Altus Group. Specialising in PE/VC, M&A, and technology law, LawKNIT Partners is a fast-growing Indian law firm founded in 2022. With offices in Bangalore, Mumbai, and Indore, it advises a diverse clientele across various investment stages. Its PE/ VC practice advises clients across investment stages (early, growth, bridge) and sectors. It has represented Mount Judi Ventures in a $7 million investment in an education technology company (Convie Genius) and advised Cbrex Technologies on investor rights during their funding round. Established in Mumbai in 2018, Lex Consult tackles PE/VC complexities with a seasoned team. Its proactive approach guides clients through intricate deals, crafting tailored solutions for success across alliances, acquisitions, and domestic/international investments. This expertise is evident in its work with prominent players like Ivanhoe Cambridge (real estate) and Ascendas (warehousing) and extends to propelling start-ups like Snapmint (funding rounds) and fintech ventures like MYSA (investment). A Mumbai boutique firm established in 2016, LexStart Partners supports startups, venture capitalists, and incubators. Focusing on early and growth stages, its 35-person team tailors legal services for each client. It goes beyond legal counsel, leveraging its start-up ecosystem knowledge to offer strategic guidance throughout a start-up’s journey. Recent successes include guiding start-ups in securing funding rounds exceeding INR 120 crore across the B2C, FemTech, AdTech, as well as the fashion and apparel sectors. NovoJuris Legal, founded in 2008, operates in both India and the U.S. The firm provides advice on PE/VC players across various investment stages. It offers guidance on a wide range of investments, from seed funding to IPOs, for both investors and companies. NovolJuris Legal’s expertise is demonstrated in complex deals, such as Aurum’s recent $1.25 million acquisition. The firm conducted thorough due diligence, structured an Employee Stock Ownership Plan (ESOP) for the acquired entity’s founder, and ensured a seamless property transfer. Its strategic advice and meticulous document drafting secured a successful integration for Aurum. Mumbai-based Pioneer Legal, established in 2019, provides comprehensive PE/VC legal services across diverse sectors like technology, education, and healthcare. It advises investors and target entities throughout the deal cycle, from structuring to post-closure compliance. Pioneer Legal differentiates itself with sector-specific expertise, proactive guidance, and support for both early and growth-stage companies. Its focus on customised solutions and leveraging its network within the Indian startup ecosystem positions it to deliver value for clients. This is evidenced by its work on high-value deals like advising the Arora family (promoters) in TA Associates’ $125 million investment in Synokem Pharmaceuticals and advising the seller in Carlyle’s $300 million acquisition of a majority stake in VLCC. Spanning four Indian cities and established in 2018, Triumvir Law focuses on early- to mid-stage start-ups, particularly in technology and media. It differentiates itself through a collaborative approach with partners directly involved in every client matter. This ensures personalised service and meticulous attention to detail. Its seasoned team provides clients with the agility and precision needed to navigate the competitive landscape. Triumvir Law’s expertise extends to venture debt funding, as evidenced by its work with Amber Internet Solutions on a recent round, and seed funding, exemplified by its successful representation of WLDD Private Limited in securing $1.25 million.

4 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE MAY-JUNE 2024 Q&A ALB: What are the reasons behind the launch of the ABI, and what are the organisation’s goals for India’s burgeoning domestic and cross-border arbitration market? Gourab Banerji: Presently, India has the fifth largest economy in the world. India was the fastest-growing economy in G20 countries by end of 2023, and by 2030, the economy is predicted to surpass that of Japan and Germany. In other words, India is slated to be one amongst the big three in a multipolar world. India is an excellent option for foreign investors and international businesses in this climate, increasing the likelihood of choosing commercial arbitration when a dispute arises. We have a talented pool of arbitration practitioners with representation across disciplines and they are among our best human resources. The Arbitration Bar of India has been created to enhance the future of commercial arbitration in India. ABI will help India progress as a pro-arbitration jurisdiction by improving the efficiency and efficacy of the arbitration process, and fully harnessing its human capital by taking into account diversity, helping our present practitioners. ABI will be an organisation that connects practitioners and stakeholders all over India, not just in cities such as Delhi and Mumbai. This integration of arbitration will, I hope, promote the development of arbitration as a choice in commercial cities currently accustomed to litigation, such as Kolkata, Pune, Hyderabad, and Ahmedabad. ABI’s training programs, seminars and conferences are expected to develop professional development of arbitration practitioners in India and, therefore, increase confidence in foreign parties coming to India. ALB: Reports find that Singapore remains the preferred venue for India Inc. when it comes to cross-border dispute resolution. What is the roadmap to increase India-seated arbitration, and what are the biggest challenges to this objective today? Banerji: India was the third-highest foreign user of arbitration in the Singapore International Arbitration Centre in 2023 after Hong Kong and China. Most arbitration in Singapore is institutionalised arbitration, and this contrasts with the current arbitration climate in India, where ad hoc arbitration is very common. The solution is to address the problem of delayed enforcement and address the perception of undue court influence. There needs to be an increased presence of well-established arbitration institutions in India to improve the parties’ trust in certainty and predictability in the system. Additionally, with increasing use of institutional arbitration, a separate pathway for appointments can be established, which obviates the need to approach courts. ABI will help create and develop current arbitration institutions to be on par with LCIA and SIAC. Pertinently, there is a mindset shift in the attitude and approach towards arbitration as a serious mode of dispute resolution, in contrast with the situation ten years ago. There is also a lack of awareness of the public about arbitration as a dispute resolution mechanism. ABI will hold conferences and partner with stakeholders to generate awareness of arbitration among clients and the younger generation of lawyers to become full-time arbitrators. One of the objectives of the ABI is also to create a repository of academic materials. ALB: The central government has been actively promoting India as a venue and governing law for arbitration. What are the key regulatory changes in this regard and what has been the market response to these changes? Banerji: The central government has incorporated key regulatory changes as seen in the 2015, 2019 and 2021 Amendment of the Arbitration and Conciliation Act 1996. The 2015 Amendment helped quicken the time period of arbitration as it introduced a provision that requires the arbitral tribunal to make its award within a year. The introduction of fast track pro- ‘THERE IS A MINDSET SHIFT IN THE ATTITUDE AND APPROACH TOWARDS ARBITRATION’ The Arbitration Bar of India (ABI) was launched on 11th May, with Gourab Banerji, a senior advocate at the Supreme Court of India, appointed as its inaugural president. Banerji shares with ALB about how ABI’s plans to take arbitration to cities across India for better accessibility, increase the quality of arbitration institutions, address the issues of slow enforcement and long arbitral timelines for speedier dispute resolution, and integrate technology in the dispute resolution process for enhanced efficiency. BY NIMITT DIXIT GOURAB BANERJI

5 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM Law Firm Hires IQBAL KHAN LEAVING Shardul Amarchand Mangaldas & Co JOINING J Sagar Associates PRACTICE M&A LOCATION Mumbai POSITION Practice Head BRIJITA PRAKASH LEAVING DSK Legal JOINING J Sagar Associates PRACTICE Real Estate LOCATION Bengaluru POSITION Partner ANJANA POTTI LEAVING J Sagar Associates JOINING Shardul Amarchand Mangaldas & Co PRACTICE Infrastructure & Projects LOCATION Bengaluru POSITION Partner KIRTHI SRINIVAS LEAVING Cyril Amarchand Mangaldas JOINING AZB & Partners PRACTICE Antitrust LOCATION Mumbai POSITION Partner ROHIT TIWARI LEAVING Cyril Amarchand Mangaldas JOINING Shardul Amarchand Mangaldas & Co PRACTICE Capital Markets LOCATION Mumbai POSITION Partner cedure for arbitration that can be completed in six months also helped solve the delay problem of the local courts. Crucially, for domestic arbitrations, Section 34 of the Act was amended to dispense with automatic stay of enforcement of arbitral awards. The 2019 Amendment helped strengthen the notion of confidentiality in arbitration proceedings and immunity for arbitrators. The market response has been positive towards the effort of Indian lawmakers on making India a pro-arbitration jurisdiction. The signals from the Indian judiciary have also been largely pro-arbitration with a few exceptions. For example, in 2022, MCIA’s caseload increased 20 percent from previous year. The institution also received 23 new matters, and 13 percent of those matters where were either one or both parties were international. ALB: Historically, foreign investors have looked at India as a challenging jurisdiction for arbitration, citing slow timelines, particularly in certain sectors, and uncertainty in award enforcement. What is the way forward to address investor concerns and what role will the ABI play under your leadership in this reformation? Banerji: The primary way to solve the issue of slow timelines is to introduce stringent procedural safeguards that will curb the delays in the local courts. ABI plans to advocate for and help implement stricter timeline procedures by seeking appropriate amendments to the Arbitration and Conciliation Act, which will ensure cases are resolved expeditiously and on time. ABI also plans to advocate for legislative changes that ensure quicker enforcement of awards and a narrow scope of grounds for challenge, increasing certainty in the entire process. ABI will play a proactive role, in consolidating the opinion of arbitration practitioners and formulating recommendations to the Law Commission of India. Ultimately, ABI would act as a legitimate body that consolidates opinions and widens the role played by civil society in law-making. The efforts of ABI will mainly revolve around strengthening comprehensive law-making. Integration with technology will help improve the situation through features such as electronic filing, virtual hearing, electronic stamping, and AI-based case management platforms. ABI plans to introduce training and seminars for utilising this kind of technology to ensure practitioners are comfortable with technology, as this is a crucial skill clients seek in the market. ABI plans to meet and connect with several institutions throughout India to help standardise arbitration procedure, ensuring their lack of unpredictability regardless of the city where the arbitration is conducted.

6 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE MAY-JUNE 2024 COVID-19 vaccine-maker AstraZeneca was in the spotlight in May following the company’s admission in a UK court proceeding of the possibility of a rare side effect called TTS associated with its vaccines. More than 50 individuals have alleged the vaccine resulted in death and serious injuries from TTS. Soon after this information went public in India, a lawsuit was filed against the Serum Institute of India (SII), which manufactured AstraZeneca’s vaccine in the country. Another public interest litigation has been filed by an advocate before the Supreme Court seeking the creation of a medical board to examine the potential adverse health effects caused by the vaccine. Lawyers feel this could just be the start of an array of potential litigation against AstraZeneca and SII, particularly owing to the absence of legal ramifications for filing frivolous and meritless claims. WHAT KIND OF CASE CAN BE MADE? There are multiple options for victims, representative bodies, local associations, concerned persons and the government to initiate action against AstraZeneca and SII, says Himanshu Vidhani, a partner in Chandiok & Mahajan’s dispute resolution practice. Victims can file a product liability class action case against the vaccine makers under the Consumer Protection Act, 2019. A complaint can also be made under the Drugs and Cosmetics Act against the manufacturer and approving authority. Vidhani adds that the companies may also be subject to public interest litigation before writ courts seeking investigation into the health effects of the vaccine, and potentially seeking directions to the Centre to establish a damage payment mechanism for those who became severely disabled as a result of a vaccination drive during the pandemic. HOW IMPORTANT WAS THE UK VERDICT? But Vidhani is quick to caution that an admission in a UK court, as reported in the press, will not be enough evidence in Indian courts to make a case against the vaccinemakers. Impact assessment, both actual and potential, of an allegedly faulty vaccine will also need to be done. Over 1.75 billion doses of Covishield were administered in India. The standard to establish criminal charges is even higher with the mandatory requirement to prove criminal intent, adds Vidhani. This may involve the disclosure of communication and pre-market test results to see if the manufacturers knew of the alleged side effects associated with the vaccine, and, if so, what steps were taken to mitigate such risks. WHAT DEFENCE CAN ASTRAZENECA AND SII TAKE? The vaccine companies will likely defend their actions on two grounds, explains Vidhani: The first is a medical argument, that while the drug may have had adverse effects on a few, it was necessary to circulate them quickly in larger public interest. On balance, the vaccine’s urgent need outweighed any potential ramifications. The second would be that the incidence of TTS among vaccine users is extremely minuscule. In the UK court admission, AstraZeneca has said TTS may occur only in “very rare cases.” u u COVISHIELD’S POTENTIAL LEGAL LIABILITY BY NIMITT DIXIT Explainer Deals $2.5 BLN Vodafone Idea’s further public offering Deal Type: ECM Firms: AZB & Partners; Cyril Amarchand Mangaldas; S&R Associates; Sidley Austin Jurisdiction: India $719 MLN Brookfield India Real Estate Trust’s acquisition of stake in Rostrum Realty Deal Type: M&A Firms: Cyril Amarchand Mangaldas; Khaitan & Co; Shardul Amarchand Mangaldas & Co Jurisdictions: Canada, India $556 MLN Warburg Pincus’s acquisition of Shriram Housing Finance Deal Type: M&A Firms: Anagram Partners; Cyril Amarchand Mangaldas; Trilegal Jurisdictions: India, U.S. $370 MLN Consortium’s investment in AG&P LNG Marketing Deal Type: M&A Firms: Cyril Amarchand Mangaldas; Latham & Watkins Jurisdictions: India, Japan $296 MLN Advent International’s investment in Apollo HealthCo Deal Type: M&A Firms: AZB & Partners; Cyril Amarchand Mangaldas; Shardul Amarchand Mangaldas & Co Jurisdictions: India, U.S. $220 MLN Indigene’s initial public offering Deal Type: IPO Firms: Cyril Amarchand Mangaldas; Shardul Amarchand Mangaldas & Co Jurisdiction: India u

7 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM BROUGHT TO YOU BY STRATAGE LAW PARTNERS What are the key stages of corporate litigation in India, and how long does each stage typically take? Corporate litigation is a wide terminology used in relation to several types of disputes initiated and/or defended by corporates. The key stages of litigation would necessarily depend upon the forum where the dispute is being adjudicated viz. National Company Law Tribunal, Commercial Court, or through Arbitration. In case of commercial disputes under the Commercial Courts Act, 2015, the first stage is pre-institution mediation and settlement under Section 12A. However, in cases where parties contemplate seeking urgent reliefs, then they may directly approach the court by filing an application for interim reliefs. Similarly, when a contract provides for an arbitration clause, the first stage would necessarily be invocation of arbitration. However, when parties contemplate seeking urgent interim reliefs, they can approach the jurisdictional District Court/High Court for interim reliefs under Section 9 of the Arbitration and Conciliation Act, 1996. In other words, in any commercial disputes one of the key stages is seeking/ applying for interim reliefs as that necessarily dictates the way and manner in which the dispute will progress. As far as the timelines are concerned, the same depends on several factors being the type of dispute, the forum before which the dispute is being adjudicated, etc. For instance, the Arbitration and Conciliation Act, 1996, provides that an award must be made within a period of 12 months from the date of completion of pleadings, which can be further extended in the manner provided in the act. What are the common grounds for corporate litigation in India, and how can businesses mitigate these risks? As mentioned above, the term corporate litigation is extremely wide and involves several types of disputes. Some of the common grounds for corporate litigation in India are disputes arising between a company and its shareholders or different factions of shareholders, breach of contract by counter parties, infringement of intellectual property rights, employment/labour disputes, dispute between co-owners/partners, regulatory noncompliance. While it may not be possible to completely alleviate the possibility of a dispute, however one of the foremost ways to mitigate the risk of dispute is ensuring that the agreement/contracts are drafted in a manner which completely captures the commercial/ legal understanding between the parties and are not ambiguous in nature. Furthermore, in cases of disputes emanating from breach of contract, it is advisable for the parties to provide for a cure period for the breaches, within the contract itself. It is also advisable that the contract should provide for good-faith discussion period prior to initiation of any legal proceedings. Further, corporates must also have robust IP protection policies, follow all relevant regulatory requirements, conduct regular legal audits and consult with legal experts for complex issues. To mitigate risk of litigation, parties may also consider putting in place a team of professionals or engage external experts to prepare for foreseeable litigations, so as to mitigate losses pursuant to such litigations. How does the Indian legal system handle cross-border corporate litigation, and what are the challenges involved? It is misconstrued internationally that complex commercial litigation before Indian courts can be a challenging experience. However, courts in India have powers to execute decrees passed by courts in reciprocating territories such as United Kingdom, Singapore, Hong Kong, UAE etc., however, if a decree is passed by a court in a non-reciprocating territory, then the same cannot be executed by any court in India. In such case, foreign parties can file a fresh civil suit in Indian court of competent jurisdiction (i) on the basis of the decree passed by the foreign court, or (ii) on the original underlying cause of action, or (iii) on both. Furthermore, in international disputes there are various issues that can be raised by the parties to the dispute, including jurisdiction of the court, difference of procedures, challenge to enforcement of orders/ decrees. Thus, it is advisable that international contracts provide for resolution of disputes by adopting the rules and procedures of institutional arbitration centres such as SIAC, LCIA, ICC, etc. Further, the dispute resolution clause in such contracts should clearly set out the governing law, jurisdiction, and procedure governing any disputes arising out of, or in relation to, such a contract. What are the recent trends and developments in Indian corporate litigation, and how might they impact future cases? Some recent trends in corporate litigation have been resolution of the dispute through methods like arbitration and mediation. Further, developments in the Insolvency and Bankruptcy Code have led to various financial institution invoking jurisdiction of National Company Law Tribunal for initiation of Corporate Insolvency Resolution Process against their debtors. These trends may lead to more efficient dispute resolution, reduced litigation costs, and greater accountability in corporate practices, potentially shaping future cases towards quicker and more transparent outcomes. What are the key factors that should be considered to arrive at a favourable outcome in a corporate litigation? The two key factors that decide the outcome of any litigation are strategy and tactics. Just like in a game of chess, a lawyer must not only anticipate the opponents next move but also must be prepared for all possible variations. As the saying goes “Every battle is won before it’s ever fought.” Similarly, most of the litigations are won or lost before the parties reach court. Hence, due weightage must be given to pre-litigation strategy. Therefore, the parties should ideally approach their lawyers at the very first instance when they anticipate a possible litigation. This will help the lawyers to devise a comprehensive legal strategy to obtain favourable outcome. Further, all future correspondence which will be exchanged between the parties can be in furtherance of well-drawn and discussed legal strategy which will be eventually assist the parties when the matter goes to court. Recent Trends and Developments in Indian Corporate Litigation: Implications for Future Cases Bhavin Gada Partner Stratage Law Partners 156 ABC, Maker Chambers III, Nariman Point, Mumbai 400021 E: W:

8 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE MAY-JUNE 2024 On Jun. 4, both BJP supporters and holders of infrastructure shares sat in front of their televisions with a sinking feeling in their stomach. Narendra Modi-led BJP had unexpectedly fallen well short of the absolute majority mark, and consequent sentiments were causing the stock market to have its worst day in four years. Infrastructure, in particular, fell 10.2 percent compared to an overall 6 percent drop, recording its worst session since Mar. 2020. Infrastructure is so strongly linked to the Modi-led India growth story, that even a reduction in the ruling party’s strength threatened to erode millions in stock value. Modi’s infrastructure drive over the last ten years has been built on three fundamental objectives: First, India is rapidly urbanising, with over 42 percent of the population expected to live in urban lion) in the interim budget, up 11 percent from the previous fiscal year, boosting the funds available for the sector for the fourth consecutive year. The government set up a National Infrastructure Pipeline (NIP) and National Monetization Pipeline to stimulate infrastructure investment. Currently, the NIP has 9743 projects with a capital outlay of $1.3 trillion at various stages of development. INCREASING FOREIGN INTEREST Rapidly increasing budgets, regulatory reforms, rising subsidies, high-yielding infra-assets and professionalisation of the business-facing government machinery have combined to deliver a clarion call for global investors to flock to India. The increased focus on connectivity projects and renewable energy is also bringing in domestic and international investments. In FY 2024, FDI inflows into the infrastructure sector hit $4.2 billion, up from $1.7 billion in the previous fiscal year. This push to be business-friendly is bringing more investors to the subcontinent, rather than any regulatory reforms. Parveet Singh Gandoak, an M&A and private equity-focused partner at U.S. law firm King & Spalding’s Singapore office, says he’s been increasingly busy with infrastructure and renewables work. “Infrastructure has become a sweet spot because our clients are looking at it for attractive investment opportunities, and with geopolitics, demographics, and a leadership committed to development, it’s India’s time in the sun,” Gandoak says. Gandoak points to increased certainty in tax regulation and policymaking, better timelines for approvals, streamlining clearances and registrations, lower government intervention in projects and a high-performing stock market as some of the key reasons behind increased global interest in India’s infrastructure market. “Regulators have become much more market-savvy, and we are seeing the government appointing more industry experts to ensure better governance,” he adds. Another big impetus is the introduction of infrastructure investment trusts BUILDING GROWTH India’s economic growth is intrinsically linked to its infrastructure development, and the government is doing everything possible and more to attract private investment. However, concerns about a weaker NDA alliance, high counterparty risk, and a slow court system remain high on investors’ minds. BY NIMITT DIXIT Image: Sirius Films/ centres by 2030. Infrastructure to support this higher standard of living needs to be built. Second, economic growth will soon be directly linked to sustainable, affordable energy. Building infrastructure to reduce foreign energy reliance is key. And, third, infrastructure is an enabler of growth. It adds employment, eases business logistical requirements and contributes significantly to the country’s gross domestic product, even in slow growth periods. Despite subdued private investment, the BJP-led government has increased its capital outlay and expenditure on infrastructure development almost each year to stimulate economic growth. For FY 2025, Finance Minister Nirmala Sitharaman raised capital spending on infrastructure to 11.1 trillion rupees ($134 bil-

9 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM (InvITs), which allow easy access and exits to investors in India’s infrastructure markets. “InvITs were a game-changer,” says Gandoak. Through these funds, “the government has monetised assets immediately and given them access to public markets. This has given a lot of impetus to some sectors such as roads and has also given an easy exit to investors.” And the market has taken to them. This year alone, KKR-backed Highways Infrastructure Trust acquired 12 road projects from PNC Infratech in $1.08 billion deal, one of the highest in the roads sector. Another InvIT, Brookfield-backed Data Infrastructure Trust acquired American Tower Corp’s India operations for $2.5 billion in January. National Highways Infra Trust completed a $740 million issuance of its units by way of private placement to domestic and global investors, including the Canada Pension Plan Investment Board, and the Ontario Teachers’ Pension Plan Board. Further, Bharat Highways InvIT became only the fourth publicly listed InvIT in the country after completing a successful $300 million initial public offering. But despite reforms, some investors say that may not be as loose-fisted with the purse without a Modi-led government, which has instilled faith that laws and reforms will remain businessfriendly and investor-friendly as long as it remains in power. “Commitment of foreign capital is more connected with growing faith in the Indian economy rather than any reform on the ground,” says Vishwang Desai, managing partner and head of corporate commercial practice at law firm Desai & Diwanji. As a weaker BJP-led National Democratic Alliance begins a the third term, investors remain concerned about whether the political stability over the last five years, which fostered an investor-friendly business environment, will remain. INVESTOR CONCERNS While it is yet to be seen whether the BJP’s aggressive infra-push can continue in its third term, certain long-term concerns need to be addressed to see more private investment in infrastructure. The largest being counterparty risk. Lawyers from India and abroad unanimously agree that the single biggest risk faced by foreign investors in India arises from their counterparty’s poor corporate governance and fraudulent practices. The consensus seems to be that promoters have very creative ways to ensure they control not only the finances, but also the way money is spent and allocated, and even how the shareholders make money from their investments. “The amount of disregard Indian promoters show foreign investors is huge,” a lawyer said on conditions of anonymity. Desai says he advises his clients to always investigate the past history and track record of promoters to identify instances of shoddy governance, miscommunication and misdirection, and denial of shareholder rights. Gandoak adds that having the right to appoint the chief financial officer, rigorous due diligence, and ensuring control over finances and related-party transactions is also crucial in reducing counterparty risk. This is key as most investors are not keen on moving courts to enforce contract terms or adjudicate disputes. Lawyers say this is for two reasons. First, the corporate resolution system in India is sub-par, with the National Company Law Tribunal ill-equipped to handle complex corporate issues. The timelines from arbitration to appeals in court is choking, particularly in the construction sector. Construction disputes in India can take up to five years, which is three years more than the legally mandated period under the Arbitration Act. India has 21 judges for every million people, one of the lowest judge-population ratios in the world. “Foreign investors have no appetite to get stuck in Indian courts,” Gandoak says. He recommends increasing funding for the judiciary and setting up specialised corporate tribunals to handle investor disputes expertly. Another reason to not go to court is to prevent a perception of being an aggressive investor. “If investors start going to court regularly to enforce contract terms against Indian promoters, the marketplace will see them as aggressive investors to be avoided in future deals,” Desai explains. Another big concern for foreign investors remains land acquisition. The process to acquire a parcel of land as an investment requires localised experts, knowledge of local language and dense bureaucratic negotiation. This has been eased, to some extent, explains Desai, by local authorities already acquiring land for any potential future projects. In such cases, a private party can take over the land from the local body on fulfilling the prescribed conditions, and not wait for the government to acquire the land. But in other cases, like bullet train projects, the path of the track is constantly being manoeuvred to fit evolving situations, and land acquisition is bound to take more time, explains Desai. Foreign investors are also staying away from public-private partnerships to avoid red tape, says Gandoak. “PPPs from a foreign investor perspective remain quite limited as perceptions regarding corruption and bureaucratic red tape still bother them,” he explains. “If investors start going to court regularly to enforce contract terms against Indian promoters, the marketplace will see them as aggressive investors to be avoided in future deals.” - Vishwang Desai, Desai & Diwanji

10 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE MAY-JUNE 2024 Chat FIRESIDE INDIA’S TECH BOOM: ARE STARTUPS TAKING INTELLECTUAL PROPERTY SERIOUSLY ENOUGH? 2024 Krishma Patel Partner, IV Merchant & Company Nakul Sharedalal Founder, NS Legal India's tech startup boom raises questions about the seriousness of intellectual property (IP) and patent management, essential for business model. Nakul Sharedalal of NS Legal and Krishma Patel of IV Merchant & Co – give their take on how to navigate through this and get the best possible solutions

11 ASIAN LEGAL BUSINESS – INDIA E-MAGAZINE WWW.LEGALBUSINESSONLINE.COM Q. India has seen a spurt in tech startups and unicorns in the last few years. Are these new-age companies taking intellectual property and patents seriously? Would not doing so impact their whole business model going ahead? NS - I am delighted to see how the startup ecosystem is shaping up in India. I am equally delighted to see that how the government hand-holding is helping the startups foster faster and better. When I touch-base with any startup with their requests of being counselled on intellectual property issues, what I feel is that all of them could have taken a better first-hand knowledge on managing as well as protecting their innovations and creativity. These new-age companies are taking IP seriously but most of them are either late or short on legal budgets. I have a tough time making them understand that IP would impact their business model much more than their marketing priorities and that they should really prioritize IP over everything else as that is the heart of any startup. KM - India’s startup ecosystem is thriving, bolstered by favourable government policies and tax incentives. However, many startups continue to undervalue the critical importance of intellectual property (IP) management. From my observations, startups often postpone IP registrations due to budget constraints or overly prioritise marketing. I consistently advise my clients that neglecting IP can have severe financial and reputational repercussions. Ensuring robust IP protection from the outset is vital for sustainable success and should be a foundational aspect of any startup’s strategy. Q. Do you think a patent or a trademark registered in India can be defended globally in case of a cross-border intellectual property dispute? What are legal strategies required to manage this? NS - That would be yes and no. There have been orders where the transborder reputation has worked in favor of the litigant where the rights have been defended well in case of cross border trademark dispute. The legal strategy that comes to my mind would be advising the client to be mindful about their user dates, choosing the goods/services well and definitely documenting the use of the product well enough to produce enough evidence in case of cross border litigation and justifying the right in a proper manner, from adoption till use. The most crucial aspect in all of this would be that at least making an application outside India where a client is doing or committed to do business. KM - Global defense of a patent or trademark significantly hinges on the brand’s international recognition. For brands with substantial global presence, leveraging a trans-border reputation can be advantageous. It is critical for companies to strategically allocate funds towards securing their IP not only domestically but also in key international markets. This proactive approach is crucial for protecting intellectual assets globally and requires diligent planning and execution. Q. Do you think holding patents, intellectual property or any other trademark outside India by an Indian company can create a tax or other regulatory issue? How can companies safeguard against these? NS - I am very certain that when an Indian entity makes an international IP portfolio, irrespective of all the countries it is holding the IP in, if the applicant is question is the Indian company then all of the valuation of the entire portfolio will stream back to the Indian company. The company has to make sure that strategically how does it want to define its structure vis-à-vis its applications internationally. Usually, we suggest that the IP Portfolio being directed to one company only with it being able to give licenses of use to various other entities in each country to avoid any sort of tax duplications and other regulatory issues. KP - Managing IP internationally can indeed lead to intricate tax and regulatory challenges. Companies must strategically plan their IP holdings based on their unique business models. For some, assigning trademark/patent or such other IP rights ownership to distributors in low-tax jurisdictions may be sbeneficial. Alternatively, licensing IP from the parent company in India may be more tax-efficient for other business models. Establishing clear ownership or licensing agreements is essential to minimise potential tax liabilities and regulatory complications. Q. How does one protect and safeguard the intellectual property in the Metaverse? How can a company or an individual create a robust intellectual property strategy to tackle this NS - I would suggest making a list of your digital assets and a baseline value of such assets. In case of blockchain based toke, it can be a digital file that encodes the product. You have to follow the basic rule of Create, Protect and Prosper even in the metaverse. Also, documenting your data as well as your proprietary information well is another aspect that should always be on a priority. One also needs to keep in mind that metaverse is a huge ocean and tackling your IP in it always depends on case-to-case basis. KP - Navigating IP protection in the Metaverse requires several strategic approaches. Firstly, ensuring that IP rights are formally registered provides a foundational layer of legal protection. Secondly, monetising through licensing can generate revenue while safeguarding usage rights. Thirdly, drafting comprehensive service agreements for Metaverse interactions is vital for enforcing IP rights. Lastly, employing automated monitoring tools to detect and address infringements is crucial in this digitally evolving landscape.

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