Key commercial issues that affect foreign investors operating in India
Continuous liberalization of foreign investment policy, and simplification of procedures are contributing immensely to attracting increased foreign investment into India. The fact that the government is now annually conducting a review of the foreign investment policy and procedures, provides added confidence to foreign investors, that their concerns are being addressed on a continuous basis.
In India due to an increasingly adversarial and litigious business environment, client demands for efficiency, large sums of money involved, conducting a thorough due diligence, adequate handling of statutory legal compliances and management control has become absolutely vital. Without complete and accurate information, lawyers, auditors and clients negotiating the transactions would be unable to address potentially significant areas of concern. At best this can lead to a failure to pay or receive a fair price for the target company or its securities and, at worst, can result in significant liability to the client.
In addition to this, the protection of intellectual property rights and double taxation issues can also be an issue for some foreign entities operating in India. Foreign investors may take pre-emptive steps by including suitable arbitration clauses in their agreements.
Alternative Dispute Resolution (ADR) techniques, such as mediation and arbitration are being employed more and more by the courts in India. India’s Arbitration and Conciliation Act, 1996 allows both domestic and international disputes to be settled by arbitration. In order to effectively deal with situations like this it may be worth considering other practical aspects such as uniformity and alignment between the applicable laws, rules, venue and forum for arbitration and the enforcement of foreign judgments and awards in India. In addition, the logistics of having to manage multi-jurisdictional legal teams, including costs should also be addressed.
In recognition of the increasingly multinational character of today’s commercial transactions and negotiations, Jafa & Javali has actively worked and interacted with leading international law firms and trans-national overseas entities involving cross-border business operations, including advising on foreign direct investment into India. The firm has also been involved in local and international dispute resolution cases, including the enforcement of judgments and awards, injunctions, protection and enforcement of intellectual property rights, competition law. Several members of the firm hold formal overseas legal qualifications and regularly contribute articles to leading newspapers and journals and lecture on a variety of current legal issues. The Firm has been regularly featured in Asia Pacific Legal 500 and has associations with independent law firms in various parts of India.
JAFA & JAVALI ADVOCATES
Kirit S. Javali, Partner
Barrister-at-Law, Grays Inn
+ 91 11 4164 1757
kirit@jafajavali.com
www.jafajavali.com
Jafa & Javali is a full fledged Corporate law firm with niche expertise in IPR and Dispute Resolution