Faced with opposition to liberalizing China’s economy 30 years ago, Deng Xiaoping is said to have retorted: “When you open the window, some flies come in”
This first anniversary issue of India Business Law Journal illustrates well the strains and stresses – the “flies” – that accompany any far-reaching attempt at reform. Much of our coverage this past year has investigated the different forms such difficulties take: frustration at the failure of the country’s legal system to perform the facilitating role that should be one of its main functions; dissatisfaction with the unpredictable imposition of new, expensive and sometimes vague regulatory constraints; unhappiness with the shortcomings too often displayed by some of the country’s legal professionals; and increased exposure to international economic influences over which domestic authorities have little or no control.
India Business Law Journal
The magazine’s focus has been to neither ignore these flaws nor dwell on them, but rather to explore how law firms, local and international, are crafting effective strategies to enable their clients to achieve their business goals. Devising suitable solutions is the responsibility of the nation’s professional elites as well as its politicians.
As in the case of China, the benefits that accrue are undeniable: rapid economic growth, the chance to lift many millions out of poverty, and then some. Lawyers play a crucial role in this process. And their role is growing. The Cover story of our inaugural issue in June 2007 focused on how – and which – foreign law firms were “ready to pounce” on India-related business opportunities. A year on, we are pleased to revisit this important subject (Jewels in the crown).
The pie is larger, but Indian law firms’ slice of it is almost certainly shrinking. How much business India’s lawyers are losing out on – and will continue to lose out on – cannot but come to mind. If nothing else, it is testament to India’s arrival at the forefront of global business.
But global business brings with it exposure to the global threats so poignantly encapsulated in Deng’s analogy.
In India’s case, one such “fly” is the increasing incidence of money laundering. Criminal activity associated with “dirty money” has become a primary concern. But as our coverage illustrates, widely welcomed measures to tackle the clandestine transfer of funds have been undermined by infighting among the authorities (Money laundering laws in a spin). Controversy centres on the judicial bodies established to administer the anti-money laundering provisions. The formation of tribunals and the appointment of adjudicators have been suspended because the judiciary and the government are unable to agree on the allocation of adjudicating powers. In common with reforms to other areas of Indian jurisprudence, a hornet’s nest of opposition was immediately disturbed. Legal limbo and paralysis are the result.
Similar examples appear throughout this issue of India Business Law Journal and it is hard to escape the conclusion that India’s rapid economic growth is posing problems that the current regulatory and judicial architecture are too inflexible to address. The pressure points – in the government, the regulatory authorities and the courts – are increasingly noticeable.
Vantage point contributor Pradeep Dinodia of accountancy firm SR Dinodia & Co, writes powerfully on the undemocratic exigencies that parliament’s predilection for retrospectivity, while our examination of a recent case of music piracy (Facing the music) provides a pertinent reminder of the woefully inadequate mechanisms for enforcing intellectual property rights in India.
Meanwhile, the need for regulators to keep laws up to date or miss opportunities is well illustrated in our report on Islamic finance. Simple regulatory changes could transform India into a regional hub for shariah-compliant finance and clear the way for a much-needed wave of investment into infrastructure, a sector well-suited to the deployment of such funds. Yet the Reserve Bank of India’s current regulations make it virtually impossible for a regulated bank to maintain compliance with shariah principles.
This month’s Cover story follows towering figures such as Ashok Desai, Soli Sorabjee and Justice Manmohan Singh as they ply their distinguished trade through the capital’s legal corridors. How the courts work reveals a pervasive imbalance of power – between judges and lawyers, between lawyers and clients and between the need for effective and enforceable remedies and the inertia of the existing system.
Around Sorabjee and other eminences of the courtroom weaves a fascinating tale of appeals, deferments and case management; and all are united in calling for change. But as our coverage reports, seeking justice through India’s infamous judicial system is not always as problematic as people are led to believe. Indeed, a series of encouraging developments promise significant improvements for lawyers and “consumers” of justice alike.
