ITBL's Law Blog

Nigeria trade policy review

2011-07-05T10:00:00.001+05:30

Nigeria Trade Policy Review on June 28 and 30, 2011 – Highlights of the Executive Summary on Nigeria from the WTO Website

2011-07-05T00:03:00.002+05:30

1. Items of Trade- Majority of the trade happen in Oil, wholesale and retail trade, communications and agriculture. Amongst the above mentioned, increased trade is taking place in Oil and agricultural sectors.

2. Imports and Export duties - Nigeria is imposing tariffs in lines with the ECOWAS external common tariffs. However, the “gap between average applied MFN tariff rates and average bound rates and the low coverage of bindings makes the tariff quite unpredictable and acts as a discentive to foreign direct investment”. The government imposes different duties on imports that vary from products to products. The governmental policy stipulating that imports entering Nigeria by roads cannot be in containers is also disadvantageous, as the government has not taken sufficient measures to address the traffic congestion at the seaports.

There are two Import Prohibition lists in existence. (a) The Absolute Import Prohibition List is based on grounds of morality, security and health whereas the (b) Import Prohibition List is based on ideals of protection of domestic industry. The exports are also subjected to taxes. There is also an Export Prohibition List in existence. The summary report says that a new legislation is in the pipeline to do away with the Export Prohibitions List.

3. Regulatory Procedures - Though the customs procedures have become simplified, it still requires updation and has to be substituted by modern processing and clearing methodology and techniques. A new legislation is also underway to replace the Customs and Exchange Management Act, which is expected to come into force during the current year. The Public Procurement Act, 2007 is expected to reduce corruption and to improve transparency and efficiency in the public procurement process.

4. The System at present and Plans for Future - Nigeria is keen on providing tax and tariff related incentives to promote investments and proposes to develop Export Processing Zones, the activities of which are looked after by the Nigerian Export Processing Zone Authority. To improve the scope for services, A One Stop Investment Centre was opened by the Nigerian Investment Promotion Commission in March 2006

5. The Summary also discusses the uneven nature of privatisation in different sectors, the challenges faced at the agrarian sector which represents over half of employment of Nigerian population, the challenges faced by the gas and oil sector which is critical to the economy of the country, the problem pertaining to inadequate generation, transmission and distribution of electricity, the weakening of banking industry following the days of economic recession, etc.

6. Towards the conclusion, the Report also observes that the further diversification and growth of the economy could be made possible through attracting private investments. The lack of information and the poor co-ordination between agencies have been considered as reasons inter alia for the slow pace of change in some areas of Nigeria.

Ann Thania Alex

LL.M.

NALSAR, Hyderabad

WTO Panel Report Submitted in Australia Apples Case

2010-08-26T23:03:00.000+05:30

WTO Panel submitted report in the Australian Apples case, where Newzealand lodged a complaint against the phytosanitary measures practised by Australia against the imported apples from Newzealand. On March 2007, the Australia’s Director of Plant and Animal Quarantine had stated that the importation of apples from Newzealand should be subject to the Quarantine Act of 1908 and ‘final import risk analysis report for apples’ from Newzealand, brought out in November 2006. Newzealand had claimed that Australia’s policy was violative of the Sanitary and Phytosanitary Agreement. Though attempts were sought to initiate panel discussions in 2007, ultimately the constitution of the panel saw the light of the day on January 2008. The nature of the dispute along with the panel’s decision to seek expert scientific and technical advice in accordance with Article 11 of the SPS Agreement and Article 13 of DSU consequently resulted in the delay of more than 2 years from the normal timeline of six months. The panel report that was circulated on August 9, 2010 addressed 16 phytosanitary measures used by Australia as not based on proper risk assessment and thereby inconsistent with article 5.1 and 5.2 of the SPS Agreement and by implication inconsistent with Article 2.2 of SPS Agreement, which requires maintaining of SPS measures based on scientific principles. Out of the 16 measures, 13 are pest-specific ones and the panel found those measures as trade restrictive and inconsistent with Article 5.6 of the SPS agreement. The latest reports say that Australia will appeal against the ruling.

Ann Thania Alex
LL.M. IInd year
NALSAR, Hyderabad

India’s Foreign Trade: May, 2010

2010-07-30T14:31:00.001+05:30

EXPORTS (including re-exports)

Exports during May, 2010 were valued at US $ 16145 million (Rs. 73964 crore) which was 35.1 per cent higher in dollar terms (27.5 per cent higher in Rupee terms) than the level of US $ 11952 million (Rs.58005 crore) during May, 2009. Cumulative value of exports for the period April-May 2010 was US $ 33032 million (Rs 149111 crore) as against US $ 24349 million (Rs. 120069 crore) registering a growth of 35.7 per cent in Dollar terms and 24.2 per cent in Rupee terms over the same period last year.

IMPORTS

Imports during May, 2010 were valued at US $ 27437 million (Rs.125694 crore) representing a growth of 38.5 per cent in dollar terms (30.8 per cent in Rupee terms) over the level of imports valued at US $ 19806 million ( Rs. 96125 crore) in May, 2009. Cumulative value of imports for the period April-May, 2010 was US $ 54745 million (Rs. 247211 crore) as against US $ 38858 million (Rs. 191502 crore) registering a growth of 40.9 per cent in Dollar terms and 29.1 per cent in Rupee terms over the same period last year.

CRUDE OIL AND NON-OIL IMPORTS:

Oil imports during May, 2010 were valued at US $ 8844 million which was 66.7 per cent higher than oil imports valued at US $ 5306 million in the corresponding period last year. Oil imports during April-May, 2010 were valued at US$ 16923 million which was 68.5 per cent higher than the oil imports of US $ 10045 million in the corresponding period last year.

Non-oil imports during May, 2010 were estimated at US $ 18593 million which was 28.2 per cent higher than non-oil imports of US $ 14500 million in May, 2009. Non-oil imports during April - May, 2010 were valued at US$ 37822 million which was 31.3 per cent higher than the level of such imports valued at US$ 28813 million in April - May, 2009

TRADE BALANCE

The trade deficit for April - May, 2010 was estimated at US $ 21712 million which was higher than the deficit of US $ 14509 million during April -May, 2009.

--
Manish Sharma
Faculty of Law,
ICFAI University, Dehradun,
E-mail: msharma28@gmail.com

Afghanistan-Pakistan Transit Trade Agreement (APTTA).

2010-07-28T17:19:00.001+05:30

On July 18, 2010, Afghanistan and Pakistan reached a landmark agreement on a transit trade deal. The new deal will allow Afghanistan to use the Wagah land route in Pakistan to transport goods by land to India. However, Indian products cannot be sent in the opposite direction.

The use of this land route to connect Afghanistan to India had been a major source of contention during the talks, with Pakistan asserting that India is not meant to be covered by the Afghanistan-Pakistan Transit Trade Agreement (APTTA).

Other provisions of the final agreement include sea access for Afghanistan, via Pakistan's ports, along with the opportunity for Pakistan to use Afghanistan as a gateway to the rest of Central Asia. The agreement also aims to standardise customs and transit permit arrangements. The pact is expected to be a huge boost to the Afghan economy, especially for pomegranate producers and other farmers, who will now have much easier access to international markets.

The Agreement is expected to contribute in the development of South Asia where the transport of goods from Afghanistan to India will be much easier now which will cut the transaction cost. And it will bring Afghanistan into the mainstream of the South Asian Trading Environment. This Agreement, further, can be made a platform for the liberalization of trade relations within the SAARC Region.

--
Manish Sharma
Faculty of Law,
ICFAI University, Dehradun,
E-mail: msharma28@gmail.com

Thimphu 'Silver Jubilee' Declaration - “Towards a Green and Happy South Asia”

2010-07-28T14:09:00.001+05:30

The Sixteenth Meeting of the Head of the States or Governments of Member Countries of South Asian Association for Regional Cooperation (SAARC) was held on April 28-29, 2010 in Thimpu, Bhutan. The theme of the Summit was 'Climate Change'. The Leaders welcomed Climate Change as the theme for the Summit and reaffirmed their commitment to address this challenge. They also adopted the 'Thimphu Statement on Climate Change' and directed that the recommendations contained therein be implemented in earnest. During the Summit the Leaders expressed the satisfaction that SAARC has achieved a number of important milestones with the completion of twenty five years of its establishment. Off course, the twenty five years standing and survivorship of SAARC as an organization in spite of bitterness of bilateral relations of two major power of the region India and Pakistan, is itself an evidence of its success.

In the Silver Jubilee Year of SAARC, the Leaders emphasized the need to develop a 'Vision Statement'. They agreed to form a 'South Asia Forum' which will consist of eminent personalities of diverse background including from all SAARC Member States. The Forum would provide inputs based on a comprehensive understanding for charting out the future course of SAARC in the medium and long run and recommend the necessary improvements required in the existing mechanisms.

The Leaders emphasized upon the participation of each and every section of the South Asian Community, particularly its students and youth, private media, private sector, think tanks, civil society and institution of economic development. The Leaders recognized the need to draw on the democratic and participatory tradition collectively represented by the Parliamentarians of South Asia for the progress of SAARC. The Leaders were eager to encourage the involvement of private sector in the regional development though the public-private partnership. In this context, they recommended the convening of a "Conclave of SAARC Parliamentarians" in line with the SAARC Charter and directed the SAARC Secretariat to convene of Working Group, comprising nominees of the Member States, to work out the modalities for establishment of such a Conclave.

In the two days Summit, Bhutan pursued the Concept of Gross national Happiness (GNH) for ensuring the people-centric development, culture, preservation of environment, better governance. Other Member States also welcomed Bhutan's offer to host a SAARC Workshop on GNH in 2010. The SAARC meeting took note on deepening regional efforts on poverty alleviation. Further, the Member States welcomed the offer of the Government of Nepal to host the Third Ministerial Meeting on Poverty Alleviation in 2011.

In pursuance of the recommendation contained in the SAARC Ministerial Statement on Environment on conservation of aquatic ecosystem, trans boundary bio-diversity zones, automated network of weather stations and regular and systematic sharing of scientific data. The Leaders called for focus on water management and conservation and development of cooperative projects at regional level in terms of exchange of best practices and knowledge, capacity building and transfer of eco-friendly technology. They were deeply concerned by the extent of environmental degradation in the region. They welcomed the signing of the SAARC Convention on Cooperation on Environment and called for its early ratification and implementation.

Further they showed satisfaction for the ongoing initiatives in promoting gender equality and women's empowerment through regional cooperation. The Government of Maldives announce to nominate a Woman Secretary General as the Tenth Secretary General of SAARC which can be proved another milestone in the path of achieving goals for regional cooperation. Recognizing the important role young people play in the region, the Leaders directed the development of a SAARC Youth Action Plan, in line with the SAARC Youth Charter to guide regional cooperation in this area.

The Member States cheered upon the ratification of the SAARC Development Fund (SDF) Charter and also the inauguration and operationalization of the Permanent Secretariat of the SDF including the appointment of its first Chief Executive Officer (CEO). The Leaders emphasized the need for the Member States to take full advantage of the mechanism of the SDF through expeditious clearance and implementation of the projects and programmes to promote the welfare of the people of the SAARC region, to improve their quality of life and to accelerate economic growth, social progress and poverty alleviation in the region.

The Ministers urged the need to implement the SAFTA in letter and spirit. They emphasised on the removal of non-tariff, para-tariff and other trade distorting barriers with the strong working of SAFTA Ministerial Council. The Leaders welcomed the signing of the SAARC Agreement on Trade in Services and expressed that this will open up new vistas of trade cooperation and further deepen the integration of the regional economies. They called for the early ratification of the Agreement.

The Leaders noted with appreciation that SAARC Commerce Ministers had coordinated SAARC position on WTO Issues and Doha Development Agenda during the Seventh WTO Ministerial Conference and agreed on the SAARC Ministerial Communiqué. They directed the Commerce Ministers to continue the process.

The Leaders called for collaborative efforts to achieve greater intra-regional connectivity and endorsed the recommendation to declare 2010-2020 as the "Decade of Intra-regional Connectivity in SAARC". They agreed on the need to expedite negotiations with a view to finalizing the two agreements on Motor Vehicles and Railways.

The need to enhance cooperation was felt in the energy sector to facilitate energy trade, development of efficient conventional and renewable energy sources including hydropower. The Leaders agreed that an Action Plan on Energy conservation would be prepared by the SAARC Energy Centre (SEC), Islamabad with inputs from the Member States and submit to the inter- governmental mechanism for consideration. They called for the creation of a web portal on Energy Conservation for exchange of information and sharing of best practices among SAARC Member States.

Further the countries, Australia, the People's Republic of China, the Islamic Republic of Iran, Japan, the Republic of Korea, Mauritius, the Union of Myanmar, the United States of America and the European Union were given the observer status during the summit, whereas Australia and Myanmar attended the Summit for the first time. The Seventeenth Summit shall be held in Maldives in 2011.

--
Manish Sharma
LL.B. (Hons.), LL.M. (International Trade and Business Laws)
Faculty of Law,
ICFAI University, Dehradun,
Uttarakhand,
INDIA
E-mail: msharma28@gmail.com
Mobile No.: +91 9012372533

Update: LL.M. International Exchange Program at NALSAR

2010-07-11T17:14:00.001+05:30

Yes, it is true that NALSAR has given this golden opportunity to three students pursuing their LL.M. and are specializing in fields like Intellectual property laws and International Trade and Business Laws. For a change this time the focus for academic development and international exposure to students has been shared with the LL.M. species at NALSAR and these students have been given a valuable chance to expose themselves to the international atmosphere. Three students have been selected from amongst a class of 60 students. They will be studying at the Faculty of Law, University of Western Ontario, Canada for a period of eight months.

Now we can say that LL.M. in India is also going places.

Will be back with more updates…

Visit NALSAR website here
Visit Faculty of Law Exchange program of Faculty of Law University of Western Ontario, Canada here

WTO Panel Report on Airbus Dispute (DS316)

2010-07-01T10:53:00.002+05:30

On October 6, 2004, the United States requested to the Dispute Settlement of the World Trade Organization for consultation with the Governments of Germany, France, the United Kingdom, and Spain (the "member States"), and with the European Communities ("EC") concerning measures affecting trade in large civil aircraft.

According to the request for consultations from the United States, measures by the EC and the member States provide subsidies that are inconsistent with their obligations under the SCM Agreement and GATT 1994. The measures include: the provision of financing for design and development to Airbus companies ("launch aid"); the provision of grants and government-provided goods and services to develop, expand, and upgrade Airbus manufacturing sites for the development and production of the Airbus A380; the provision of loans on preferential terms; the assumption and forgiveness of debt resulting from launch and other large civil aircraft production and development financing; the provision of equity infusions and grants; the provision of research and development loans and grants in support of large civil aircraft development, directly for the benefit of Airbus, and any other measures involving a financial contribution to the Airbus companies. The subsidies in question include those relating to the entire family of Airbus products (A300 through the A380)

The United States further notes that certain launch aid provided for the A340 and A380 appear to be illegal export subsidies in contravention of certain provisions of Article 3 of the SCM Agreement. The United States is also concerned that the measures appear to be inconsistent with Article XVI: 1 of GATT 1994.

The United States is further concerned that the measures appear to be causing adverse effects to US in a manner contrary to the provisions of Articles 5 and 6 of the SCM Agreement. The United States is concerned that the measures have caused and continue to cause nullification or impairment of benefits to the United States under GATT 1994 within the meaning of Article XXIII: 1.

On June 30, 2010The WTO issued the report of the Panel that had examined a complaint by the United States. In that Panel Report, certain recommendations have been stated which are as following:

1. As per the article 3.8 of the DSU, it has been concluded that, to the extent that the European Communities, France, Germany, Spain and the United Kingdom have acted inconsistently with the SCM Agreement, they have nullified or impaired benefits accruing to the United States under that Agreement.

2. According to article 4.7 of the SCM Agreement, taking into account the nature of the prohibited subsidies that the Panel have found in this dispute, it recommends that the subsidizing Member granting each subsidy found to be prohibited, withdraw it without delay and specify that this be done within 90 days.

3. According to article 7.8 of the SCM Agreement, in light of the Panel's conclusions with respect to adverse effects it recommends that, upon adoption of this report, or of an Appellate Body report in this dispute determining that any subsidy has resulted in adverse effects to the interests of the United States, the Member granting each subsidy found to have resulted in such adverse effects "take appropriate steps to remove the adverse effects or ... withdraw the subsidy".

--
Manish Sharma
LL.B. (Hons.), LL.M. (International Trade and Business Laws)
Faculty of Law,
ICFAI University, Dehradun,
Uttarakhand,
INDIA
E-mail: msharma28@gmail.com
Mobile No.: +91 9012372533

Suspension and termination of Anti-dumping duties on Price Undertaking

2010-07-01T09:28:00.001+05:30

According to the Customs Tariff (Identification, Assessment and Collection of Antidumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Designated Authority may suspend or terminate investigation if the exporter concerned furnished an undertaking to revise his price to remove the dumping or the injurious effect of dumping as the case may be. No undertaking can however be accepted before preliminary determination is made. No anti-dumping duties are recommended on such exporters from whom price undertaking has been accepted. No price undertaking may, however, be accepted in case it is found that acceptance of such undertaking is impracticable or is unacceptable for any reason.

Rule 15 of the Anti-dumping Rules 1995 says that:

1. The designated authority may suspend or terminate an investigation if the exporter of the article in question, -

i. furnishes an undertaking in writing to the designated authority to revise the prices so that no exports of the said article are made to India at dumped prices, or

ii. in the case of imports from specified countries undertake to revise the prices so that injurious effect of dumping is eliminated and the designated authority is satisfied that the injurious effect of the dumping is eliminated:

Provided, further that the designated authority shall complete the investigation and record its finding, if the exporter so desires, or it so decides.

2. No undertaking as regards price increase under clause (ii) of the sub-rule (1) shall be accepted from any exporter unless the designated authority had made preliminary determination of dumping and the injury.

3. The designated authority may, also not accept undertakings offered by any exporter, if it considers that acceptance of such undertaking is impractical or is unacceptable for any other reason.

4. The designated authority shall intimate the acceptance of an undertaking and suspension or termination of investigation to the Central Government and also issue a public notice in this regard. The public notice shall, contain inter alia, the non-confidential part of the undertaking.

5. In cases where an undertaking has been accepted by the designated authority the Central Government may not impose a duty under sub-section (2) of section 9A of the Act for such period the undertaking acceptable to the designated authority remains valid.

6. Where the designated authority has accepted any undertaking under sub-rule (1), it may require the exporter from whom such undertaking has been accepted to provide from time to time information relevant to the fulfilment of the undertaking and to permit verification of relevant data:

Provided that in case of any violation of an undertaking, the designated authority shall, as soon as may be possible, inform the Central Government of the violation of the undertaking and recommend imposition of provisional duty from the date of such violation in accordance with the provisions of these rules.

The designated authority shall, suo moto or on the basis of any request received from exporters or importers of the article in question or any other interested party, review from time to time the need for the continuance of any undertaking given earlier.

--
Manish Sharma
LL.B. (Hons.), LL.M. (International Trade and Business Laws)
Faculty of Law,
ICFAI University, Dehradun,
Uttarakhand,
INDIA
E-mail: msharma28@gmail.com
Mobile No.: +91 9012372533

National Conference on Building Next Practices on Intellectual Property (IP) Management, 15-16 July 2010, Hotel Taj Krishna, Hyderabad

2010-05-27T15:06:00.002+05:30

A national conference on IP is being held at Hotel Taj Krishna, Hyderabad, India in the month of July. Below is the information about the conference:-

Overview:

The national conference on building next practices on Intellectual Property (IP) management organized by The confederation of Indian Industry and Andhra Pradesh technology Development and Promotion Centre(APTDC) aims to take stock of the current scenario and adopt the next practices of IP management around the world, build an national and international network of professionals interested in the development of the nascent field of IP management as well as propose strategies for fostering the development of IP management best practices in India.

Background:
Intellectual Property has become a key consideration in day to day business decisions. IPR is an essential tool for achieving competitiveness in today’s business environment.

Many new products and services developed by companies and organizations embody different types of Intellectual Property (Patents, trademarks, designs, copyrights, trade secrets etc.). Companies need to dedicate resources and time for Creation, Protection and Management of Intellectual Property in order to achieve & sustain competitiveness at the market place.

While acquiring IP protection is an important initial step, effective Intellectual Property management means more than protecting a company’s Intellectual Property. It actually involves, in addition to protecting companies’ inventions, a company’s ability to commercialize its inventions, market its brands, license the know-hows, transfer technologies, conclude JVs and monitor & enforce IPRs. Leading companies and organizations increasingly consider Intellectual Property management as part of overall business plan and use it effectively in driving the business strategies.

The Need:

To be Competitive in Global environment, especially as the business is becoming Technology focused, it is necessary for the Corporates to align IPR and IP management in their business strategy so that they are under no threat of “Litigation “or “Infringement” Issues.

Creativity & Innovation are the essential ingredients to be nurtured if we plan to create more wealth out of Intellectual Property. It is important that there are proper mechanisms to identify invention to finally convert them into tangible assets for Corporate. This Mechanism can be triggered if the environment is conducive for IP Promotion, Identification & Protection. These three steps of channelising IP into Business is IP management.

IP has emerged as a key driver for building and sustaining competitive advantage in the contemporary knowledge economy. Policy advisors and decision makers regard IP as a means for promoting creativity and innovation and economic development. Firms view IP as a valuable corporate asset and a strategic business tool. Recent research indicates that over 50% of the value of many business organizations is attributed to IP. Increasing significance of IP is forcing business organizations to actively manage IP.

IP management education and research is in a nascent phase. Most business schools and faculties of management science have no IP management education and research programs. Furthermore, there is presently an acute shortage of resources (text books and case studies) and resource persons (lecturers and professors) on this subject. Although the number of research papers presented at the Academy of Management and similar meetings have been steadily increasing over the past years there is still much work to be done to integrate IP as part of mainstream management discipline.

What should be the research agenda in the field of IP management? How should academics and managers deal with the ever changing world of IP including ongoing developments at the national and international level? How do we bring together the disciplines of IP and management in a coherent manner which meets the test of rigor and relevance?

IP management has emerged as a major area of business competence. It has become as important as understanding innovation, technology, marketing, finance, corporate governance, industrial economics and strategy.

A level Playing field has to be set to channelise IP management for Wealth Creation Opportunities. In the same context Confederation of Indian Industry and APTDC is organising this National conference with an objective to :

Objectives of the National Conference:

Develop an understanding of the basic concepts of IP management and learn about recent developments and next best practices in this field.
Shape the future of IP management in India among Industry and Academia
To provide a forum to learn implications of various important tools of Management of Intellectual Property Rights for enhancing competitiveness.
Create a platform for Industry and Institutes to collaborate in this important Mission
To share best Practices through case studies from leading corporates and Institutions.
Establish linkages and partnerships with IP management professionals, teachers and researchers in the Country.

Important Technical Sessions to be covered:

IPR’s and their strategic relevance: an overview
Integrating IP with Management
Role of IP Management in Enhancing Business Competitiveness
Managing IPRs: Internal Assessment of Technology
IPR’s Valuation, licensing and strategic alliances
Management of IP : inter and intra-organizational issues
Issues Relating to Commercialisation of IPRs
Managing IPRs: Role of Networks and Strategic Alliances
Developing a Road Map for the next best practices on IP Management

Who can Partner/Sponsor with us:

Law firms, Industry, Academic and Research Insitutions, Corporates, Government Agencies.

Who Should Atttend?

This conference will be beneficial to IP managers; consultants and professional who wish to shape the future of IP management Representatives from government agencies, including IP offices, business associations, chambers of commerce and other bodies with an interest in the subject of IP management education and research will also find the program useful.

This conference is also designed for professors, researchers and administrators and faculties of management science who seek a working knowledge of IP management with a view to launching educational and research programs in this emerging field.

Faculty:

Eminent IPR experts from the country and abroad, Policy makers and Practitioners will be invited to make presentations and share their experiences.

PROGRAMME CALENDER:

Date: 15-16 July 2010

Venue: Hotel Taj Krishna, Hyderabad
Timings: 9 AM - 6 PM (Both days)

Contact:

Kamaraju Chitrapu: 98492 39783(M), c.kamaraju@cii.in

Subhajit Saha: 98483 04423, s.saha@cii.in

Confederation of Indian Industry Andhra Pradesh Technology Development & Promotion Centre

I-II-252/9. Plot No.7, II Floor, Regal House, Motilal Nehru Nagar,

Begumpet, Hyderabad – 500 016, Andhra Pradesh, India.

Tel: 91 40 27765837/835/832, Fax: 91 40 27765836

The event information and reply form can be downloaded here

Call for Papers: RDI-NALSAR Conference On Legal Aid to Secure Land Rights to the Rural Poor: Role of Government, NGOs and Paralegals

2010-03-11T19:58:00.002+05:30

In keeping with one of the objectives so stated in the concept note, Rural Development Institute in collaboration with NALSAR University of Law, Hyderabad is going to organize a National Conference on “Land, Poverty and Legal Aid Ensuring Secured Land Rights to the Rural Poor: The Role of Paralegals and Legal Aid” on April 10th & 11th, 2010 at NALSAR campus. As far as the rationale behind this conference is concerned, the discerning individuals are hereby requested to refer to the “Concept note”.

For participating or presenting papers in the conference, participants would have to fill in the registration form available at www.nalsarlawuniv.ac.in. If you wish to present a research paper in the conference, do kindly submit your abstract along with the registration form. The criterion for presenting the paper in the conference would be based on short-listing of selective abstracts by the selection committee and only the authors of the selected abstracts would be allowed to present the same in the conference. Thereafter, a month’s time will be given to the author for submitting the full-length paper and the papers so presented may be published in the form of a Book in due course of time.

For Event Webpage Click here

For details of the Call for Papers, Click here

For Registration form of the Conference, Click here

Draft Press Note 2010

2010-02-08T10:05:00.005+05:30

Department of Industrial Policy and Procedures, Ministry of Commerce and Industry, Government of India has issued a 66 page draft Press Note of 2010 on the subject “FDI Regulatory Framework”. The press note was posted on the DIPP’s website and comments were invited on the same. The draft press note can be found here

By: Manish Sharma, LL.M. (International Trade and Business Laws), NALSAR.

E-mail: msharma28@gmail.com

One Day National Workshop on ‘SAARC Trade Relations: Legal Issues and Challenges’

2010-02-02T22:00:00.003+05:30

South Asian Association of Regional Cooperation (SAARC) was established in 1985 by the Seven Member Countries of South Asia. In 2007, the membership increased to 8 with Afghanistan joining in. The M.K. Nambyar SAARCLAW Centre at NALSAR University of Law, established in 2003 is one of its kinds in the entire country in terms of its objectives. It has its own well equipped building for conducting lectures, conferences, meetings, moot courts, research and other activities. It has credible Fellowship Programmes with special emphasis on Post Graduate education and also Training Programmes for Law Teachers/Law Officials/Judges of SAARCLAW Region. One of the primary objectives of the Centre is to hold annual SAARCLAW conferences and conduct Research Projects on various legal issues concerning the SAARC region.

In furtherance of its mandate objective, the M.K. Nambyar SAARCLAW Centre has planned a one day national workshop on “SAARC Trade Relations: Legal Issues and Challenges”. The Workshop will be held on Saturday, 20th February, 2010 at the M. K. Nambyar SAARCLAW Centre, NALSAR University of Law, Justice City, Hyderabad.

The workshop is for a healthy discussion and debate on steps that need to be undertaken strengthening the economic cooperation within the region also focusing on SAARC’s role in the development of International Trade. The tentative themes of the Workshop shall be:

Rules of Origin (RoO) in the SAARC Region
Trade Barriers
Most Favoured Nations Treatment within the SAARC Region
Dispute Settlement Mechanism under SAPTA/SAFTA
SAARC’s Approach Towards WTO Issues
Informal Trade in the SAARC Region
Principle of Reciprocity and Non-reciprocity in SAPTA/SAFTA

This Workshop will explore the legal-cum-economic aspects of the SAARC and will provide a platform for discussion and aims to point towards possible outcomes to strengthen the legal cooperation and capacity building among the Member Countries.

Contact to participate: saarclawcentre@gmail.com

Website: www.saarclawcentre.org

India and Anti-dumping Laws : General-1

2010-01-11T12:28:00.007+05:30

It is a matter of fact that India was a founding member of GATT 1947 and is also a founding member of WTO that came into existence on 1^st January, 1995. Under the WTO regime the GATT 1994 has been recognized as one of the important agreements on trade in goods which is more or less similar to GATT 1947 with few necessary amendments. WTO Member States concluded other separate agreements also which were the part of GATT 1947. ‘Agreement on Implementation of Article VI of General Agreement on Tariffs and Trade 1994’, commonly known as the ‘Agreement on Anti-Dumping’ is one such agreement.

India had committed to implement this agreement into its domestic law as part of a single undertaking. Sections 9A, 9B and 9C of the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 framed there under, form the legal basis for anti-dumping investigations and for the levy of anti-dumping duties. These laws are based on the Agreement on Anti-Dumping which is in pursuance of Article VI of GATT 1994.

Section 9A (1) says that where any article is exported from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article.

Further it states that margin of dumping is the difference between the product’s export price and its normal value. The normal value is the comparable price at which the goods under complaint are sold, in the ordinary course of trade, in the domestic market of the exporting country or territory. The export price of goods imported into India is the price paid or payable for the goods by the first independent buyer.

Paragraph 2.1 of Article 2 of the Agreement on Anti-dumping says, “For the purpose of this Agreement, a product is to be considered as being dumped, i.e. introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country.”

In both the definitions following are the essential factors:

Export price less than Normal Value
Like Product
Material Injury to the Domestic Industry or Producers
Dumping Margin

If all the above factors exist then it is directly a case of dumping. And against that dumping, the Government of India can impose or levy anti-dumping duties to mitigate the material injury but to the extent of dumping margin or injury margin.

To be continued...

For an interpretation of the Anti-Dumping Agreement, kindly visit: WTO's website

By: Manish Sharma, LL.M. (International Trade and Business Laws), NALSAR.

Contract of Sale of Goods

2009-12-22T18:13:00.004+05:30

The United Nations Convention for Contract of Sale of Goods (CISG); and Indian Sales of Goods Act, 1930

The Convention of International Sale of Goods, 1980 does not apply to India since it is not a signatory to the same. Therefore, by the virtue of it, the rules of this international convention, do not apply in case of a purchase or a sale agreement with an Indian entity. And thereby, the domestic laws of the country (India) will have applicability to such agreements
The Sale of Goods Act, 1930 applies in such a case and therefore, the seller as well as the purchaser would be governed by the provisions of the Act.

A. Common Features

	Convention on Contract of International Sale of Goods (CISG, 1980)	Indian Sales of Goods Act, 1930
Rights, Duties, liabilities and Obligations of Buyer and Seller	Provisions for seller are given in chapter II of the part III from articles 30 – 44. With regard to buyer, chapter III of part III from articles 53-60 is relevant.	Rights and Duties of the seller and buyer are given in chapter IV performance of contract. They are more or less same as given in the UN Convention. And further chapter V states about the rights of unpaid seller against the goods
Suit for Breach	In both the cases it will depend on the agreement between the parties that any dispute they refer to the court of law or the arbitration
Remedies in case of Breach	In case of breach by the seller, articles 45 -52 are relevant and in case of breach by the buyer articles 61 - 65 are relevant.	Remedies in case of breach are available for the parties in chapter VI of the Act. One party can sue another for the damages in case of breach by latter.
Indemnity	In both the cases it shall depend on the nature of the agreement and the intention of the parties to the contract. And in case of the transaction includes transportation also
Fixation of price of the goods	In both the document the, provisions for determination or fixation of price are wide in nature. Parties can fix it according to their interest and the nature of the goods in question by the contract or it may be determined in the course of dealing in future.	Sections 9 & 10

B. Provisions that make difference

	CISG, 1980	Indian sales of Goods Act, 1930
Third party claim	Articles 41-44 deals with third party claim. It says that the seller must not deliver the goods over which any third party is having any right or claim.	The Indian Act, is silent about this kind of provision
Auction Sale	Article 2 excludes the sale by auction from the applicability of the Convention	Whereas Indian Act provides the Auction Sale in section 64.
Agreement	The CISG provides only general contractual terms in relation to Contract of Sale of Goods	Whereas the Act clearly gives the meaning of Contract of Sale of Goods and Agreement to Sell and the future or contingent conditions
Damages	Damages have been given in Articles 74-77 of the Convention which are somehow fix in nature and according to the value of the goods in question or dispute	The aggrieved party may sue for the damages and in that case the court or the tribunal shall decide the amount of damages
Exemption	The Convention provides exemptions in case of any circumstances beyond the parties’ control

C. Provisions about which both the documents are silent

The provisions about which both the documents are silent are:

Mistake
Misrepresentation
Fraud

In case where Indian Law is the applicable law, the above three provisions, about which the International Convention is silent, will be dealt by the Indian Contract Act, 1872.

But if the International Convention is the Governing Law of the Agreement or Contract, the land law of the particular country will be applicable, wherein the proceedings of the court or arbitration are going to be held.

In certain cases, the applicable law shall be the law of the land according to the interest of the parties or the law of the land with that the parties and the agreement is having closest connection.

Continued in the second issue…

Contributed by:- Manish Sharma, LL.M. II year, NALSAR, Hyderabad.

Email: msharma28@gmail.com

'Softwares':Things to know

2009-11-17T12:38:00.003+05:30

Difference between the Box Packed Software and Software Downloaded directly from Internet
With Internet becoming a necessity, softwares have also become inevitable. Everybody of us use or have used some kind of software. A Software is a program designed to perform some specific task in a computer; for example: Operating system (Windows XP, Windows Vista), Document processing (MS Words), Database Management – DBMS – (MS Excel, MS Access, Oracle), Presentation (MS PowerPoint), Photo Editing (Adobe Photoshop), Document Reader (Adobe Acrobat Reader), Antivirus and Firewall and so on. It is a help to the hardware and without softwares, hardware cannot perform the essential functions.

Software usually comes in two forms:
1. Type 1 Software: Software available in a shop or a Mall or from a vendor or from a reseller, which comes in a “Box Packed Type” and usually such softwares are written/burned on a CD/DVD. But these can be stored in a Flash/Pen Drive or on a media which the purchaser obtains in a “Hard Copy Format” i.e. on a CD/DVD, Flash/Pen Drive or on Floppy/Hard Drive, etc.

2. Type 2 Software: Softwares available on the internet fall in this category. Such Softwares can be obtained by downloading it directly from the internet. The seller or the reseller in this case had uploaded that software on his FTP server, which can be located anywhere in the world. There can be a plethora of FTP Servers and the same software can be available on different “Mirror” FTP Servers at different places all over the world. Such software does not come in a “Hard Copy” format and the user downloads such software directly on to his computer Hard Drives.

We use a plenty of softwares without even realising the difference between the above stated two different types. We think that software which is available in the shop (in Hard Copy Format) is the same as the software which is available over the internet and can be downloaded directly from the internet. However, there is a great difference between the Type 1 and Type 2 Software in both commercial and legal sense.

The Type 1 Softwares are generally categorised as “Products” or “Goods” and the Type 2 Software are generally categorised as “Services” in Commercial and legal sense.

The Type 1 Software is traded as “Goods” and follows all the principles and laws relating to “Sale of Goods” in legal and commercial sense.

The Type 2 Software is traded as “Services” and follows the principles and laws relating to “Trade in Services” in legal and commercial sense. The “Services” also includes the Software “Updates” and “Upgrades”.

The “Updates” available on the internet are those softwares which come in “Patches” and are meant only to update the existing software which a user has already installed in his system. By updating, the version of the software does not change, but it becomes “up-to-date”. These upgrade the existing software to a higher version. The user has a choice of buying a new version of software directly from market or “upgrading” the existing software to the latest version of that software. The version of the software changes while upgrading. For Example: “Norton Antivirus 2006” is “updated” to achieve the latest definition of virus databases, the version is not changed, while “Norton Antivirus 2006” can be “upgraded” to achieve “Norton Antivirus 2008”. The user has a choice that he can buy a new and fresh “Norton Antivirus 2008” from market/internet or he shall “upgrade” it from existing “Norton Antivirus 2006” to achieve the “Norton Antivirus 2008”. Usually the Upgrade options are preferred by the users as the costs of the upgrades are always less than the fresh and new software.

The License Agreement (LA) Factor
Every genuine software comes with a License Agreement (LA). Though the software works in almost similar way, even then the Licence Agreement pertaining to Type 1 and LA pertaining to Type 2 is totally different. It can be observed by reading the License Agreement or the “Digital Contract” attached with both types of software. “Digital Contract” is the Contract of use of software which is in digital form. Almost all of us have seen such “Digital Contract” while installing the software, where a dialogue box opens and the user has to “read” it and “print” it and the software can only be installed if the user selects “I Agree” or “Accept”, but if the user selects “I Disagree” or “Reject”, the installation of the software fails. Such types of “Digital Contracts” or “Licence Agreement” are normally known as “End User Licence Agreement” (EULA).

The EULA pertaining to Type 1 software are related to softwares termed as “Goods” and the EULA pertaining to Type 2 are related to softwares termed as “Services”.
For Type 1 Software, the Digital Contract or EULA as it being a Standard Contract comes with a print outside the package or the box of the software. The reason for this is that, the EULA being in digital form, the user must read and know about it at the time he purchases it and not at the time he starts using it. After he buys the software and uses it for the first time, even if he disagrees with the EULA clause which is usually asked from the user when using it for the very first time, then he cannot return the purchased ‘Box’ Software, because he has already opened the Box or the packing material containing the software and only after agreeing to the License Agreement. Therefore, the EULA has to be printed on the outmost covering of the box software, for the purpose that the customer can read the EULA in printed form and can decide whether he agrees or disagrees with the EULA, thereby making his decision whether to purchase the software or not.

Whereas, for a Type 2 Software, the EULA is digitally available just before/near the “Download Link/Button”, from where the downloading can be started. Because of this, the customer who intends to purchase and download the software can read and understand the EULA, thereafter making his decision whether to purchase or not accordingly.

The Taxation and Other Factors
In India, Type 1 and Type 2 softwares are taxed in different ways. Type 1 is taxed as Goods and all taxes, direct or indirect, are levied on Type 1 as Goods i.e. customs, excise, octroi, VAT, etc. are all levied on Type 1 considering it as “Goods”. While Type 2 are taxed as Services and the “Service Tax” as and when applicable is levied.
Some other factors like the Warranty issues pertaining to the two classified softwares are also different. Type 1 softwares being “Goods”, such software carries a warranty with all the terms and condition of warranty. Type 2 softwares being “Services”, such softwares do not have any warranty because warranty is a virtue of “Goods” and not of “Services”.

The above difference is made clear under the UNCTRAL Model law relating to Digital Contract and e-commerce whereby the effort has been made to make e-commerce between countries and individuals easy and less complicated in terms of Taxation, Warranty and Licence Agreement.

Contributed By: Rameet Verma, LL.M., International Trade and Business Laws, NALSAR University of Law, Hyderabad.
Email: verma.ramit@gmail.com

WTO Dispute Settlement Mechanism: a Milestone with 400 Cases

2009-11-09T14:13:00.004+05:30

The biggest change in the WTO from GATT 1947 was the establishment of an effective and efficient dispute settlement system. The member states concluded a separate Agreement in Annexure II of Marrakesh Agreement titled as ‘Understanding on Rules and Procedures Governing the Settlement of Dispute’.

The Mechanism has written lot of successful stories with getting the 400th complaint recently on 2nd November, 2009 which is an evidence of the member states’ confidence in the WTO system. On this occasion WTO Director General Pascal Lamy said, “This is surely a vote of confidence in a system which many consider to be a role model for the peaceful resolution of disputes in other areas of international political or economic relations.” Further he remarked, “All the political muscle-flexing and grandiloquence is discarded at the door once the case enters the WTO.”

Since coming into existence in January 1995, the WTO's 153 members initiated an average of approximately 27 disputes per year under the provisions of the Dispute Settlement Understanding, the WTO treaty governing the settlement of all disputes among the organization's members.

Of the 400 cases filed so far, approximately half have eventually been settled directly between the parties, under the system's mandatory consultation requirements, without going to litigation. Of the remainder, 169 have been the subject of panel and, where appealed, Appellate Body proceedings, 17 are currently in adjudication, and 12 are still the subject of active consultation between the parties.

There is also lot of criticism about the WTO DSM that it is dominated by the developed countries mostly EC and US. On this point the DG said that “Certainly, these two trading giants are the most frequent users of the system. This is not surprising since they are the world's biggest traders, as is increasingly the case with China. But the figures also show that developing countries do not play coy hand-maidens to their richer trading partners. During the period 1995-2009, developing countries have been complainants in more than 45 per cent of all cases, and have been respondents in more than 42 per cent of the cases.”

But still the problems are there before the developing countries specially the least developed countries when they have to enforce the findings of the Dispute Settlement Body against developed countries. The examples can be taken from the cases like US-Shrimp Case in which Malaysia tried a lot to enforce the findings against US. Sometimes the developed countries put pressure upon developing countries to make changes in their domestic laws according to the developed country’s interest; and failure of that they impose various type of sanctions under the loopholes of WTO System.

Therefore, the WTO DSM needs some changes so that it can be just, fair and equitable with the poor world. The ongoing review of the functioning of the WTO's dispute settlement system has given rise to many proposals for clarification and improvement. But WTO Members agree that, as the bedrock of the multilateral trading system, the dispute settlement system will not be subject to any seismic shift in its fundamental structure as a result of the Members' deliberations.

Summary of disputes (as of 2 November 2009)
To date, 400 disputes have been brought to the WTO, of which:
• 84 appear to have been resolved bilaterally but for which no outcome notified to WTO
• 95 were resolved bilaterally for which outcome notified to WTO
• 23 were resolved bilaterally after a panel was established but before the panel was composed
• 12 are currently the subject of active consultations between parties
• 186 went into litigation

Contributed by: Manish Sharma, LL.M. II year, NALSAR, Hyderabad.
Email: msharma28@gmail.com

FDI in India – A brief Introduction

2009-11-06T20:07:00.005+05:30

The Indian Government embarked on liberalizing the Indian regulatory framework with specific reference to foreign investment, through the Statement on Industrial Policy of 1991. Since then the Indian regulatory environment for foreign investment has been eased consistently to make it increasingly investor-friendly.

Entity Options
A foreign company looking at setting up operations in India has the following options for formulating its entry strategy:

1: Operating as an Indian Company, through:

(A) Wholly owned Subsidiary Company

A foreign company can set up a wholly owned subsidiary company in India for carrying out its activities.
Such subsidiary is treated as an Indian resident and an Indian Company for all Indian regulations (incl. Income Tax, FEMA and Companies Act), despite being 100% foreign owned. At least two and seven members are mandatory for a private limited and public limited company respectively.

(B) Joint Venture with Indian Partner : equity participation
Though a wholly owned subsidiary has been the most preferred option, foreign companies have also been setting up shop in India by forging strategic alliances with Indian partners. The trend in this respect is to choose a partner who is in the same field/area of activity or brings synergy to the foreign investor’s plans for India.

2: Operating as a Foreign Company, through:
(A) Liaison Office
(B) Project Office
(C) Branch Office

Foreign Investment not permitted
Under the current FDI framework, foreign investment is permitted from all categories of investors and in all sectors except in certain sectors, namely:
• Atomic Energy
• Lottery Business, Gambling & Betting
• Agriculture (excluding floriculture, horticulture, seed development, animal husbandry, pisciculture and cultivation of vegetables, mushrooms etc.)
• Plantations (excluding Tea plantation)
• Retail Trading (other than Single Brand retail)
• Real Estate (except construction development projects)

Sectors where Foreign Investment is permitted
For other sectors, there are two approval routes for foreign investment in India:
• Automatic route under delegated powers exercised by the Reserve Bank of India (RBI),
• Approval by the Government through the Foreign Investment Promotion Board (FIPB) under the Ministry of Finance.

Automatic Route
FDI is permitted under the automatic route (i.e. without requiring prior approval) for all items/activities except the following:
• where the foreign collaborator has an existing venture/tie-up in India in the same field (‘same field’ means 1987 NIC code) as on January 12, 2005, with the exception of following cases which would not require prior FIPB approval :
• investment by a Venture Capital Fund registered with SEBI;
• existing joint venture has less than 3% investment by either party;
• existing joint venture is defunct or sick.
• proposals falling outside notified sectoral policy/caps or sectors in which FDI is not permitted.

Automatic Route is not available to:
• Unregistered entities overseas
• Investments other than shares and convertible debentures
• For consideration other than cash (except for capitalization of ECB due for repayment and interest on such ECB, technology royalty due for payment)

FIPB Route
In all other cases of foreign investment, where the project does not qualify for automatic approval, as given above, prior approval is required from FIPB.

The proposal for foreign investment is decided on a case-to-case basis depending upon the merits of the case and in accordance with the prescribed sectoral policy.

to be continued...

(Disclaimer: Please check the latest rules and regulations by the appropriate authorities as they are subject to change at any time)

Seventh WTO Ministerial Conference

2009-11-06T15:47:00.004+05:30

The Seventh Session of the WTO Ministerial Conference will be held from 30 November to 2 December 2009. The Conference is taking place four years after the last Ministerial Conference in 2005, where the emphasis will be on transparency and open discussion. The general theme for the discussion shall be “The WTO, the Multilateral Trading System and the Current Global Economic Environment”. The Conference provides an opportunity to look at some systemic issues in the WTO with a view to strengthening the multilateral trading system.

In the pursuance of its intention in General Council Meeting held on 26th May, 2009, on 2nd July, 2009, India submitted a set of five proposals to General Council which are intended to enhance the usefulness of WTO and to make the system more relevant, vibrant and user friendly for both the member states and the larger trading community. India considered these proposals important from the perspective of improving the functioning and efficiency of WTO as a rule-based system.

1. Trade Information System based on Member Notifications: there is a significant gap in the information available on non-tariff measures (NTMs). The WTO took a step in the right direction when it implemented the Integrated Data Base (IDB) covering tariff (applied and bound) and trade data (partner-wise) which are electronically available at the national tariff line level. This has proved to be of immense assistance in formulating not just negotiating positions but also for various research activities. It is time that NTMs are integrated with the IDB in a common format and for similar use. For the trade operatives, the proposal is to create a comprehensive information system that provides at the national tariff line level the tariff and non-tariff measures imposed by any member. This kind of a system will grant member regimes a level of transparency that is not presently available from any source would be an invaluable improvement to the present situation. It will enhance the cooperation with the related multilateral agencies and provide technical assistance to developing and least developed countries.

2. Revitalize WTO Committees: for the better functioning and to improve the utility of the various committees, India has proposed some suggestions to be adopted – a) monitoring the recent developments in the member states on trade disciplines covered by the respective committee; b) a general discussion on the current practices and the recent developments on the trade disciplines of the concerned committees and also to include the outside experts in these discussions; c) to enable the committees to discuss and offer possible solutions to specific trade concerns of the members; and, d) the frequency of the meetings of committees should be increased.

3. WTO’s Engagement with RTAs: the ministers of the member states must issues directives collectively to for monitoring the developing trends in RTAs and their relationship with the WTO. There must be non-binding best practices guidelines for reference while negotiating new RTAs. There should be an effective transparency mechanism. The Secretariat should publish an annual review of the working of RTAs.

4. Omnibus Legal Instrument for Preferential Market Access to LDCs: it has been proposed to establish a ‘steering group’ or a subsidiary body under the General Council to comprehensively examine all WTO related instruments allowing members to grant preferences to LDCs. Following such examination, members to consider; propose and adopt a single instrument that would address all forms of preferential market access for LDCs.

5. Reaffirm primacy of International Standards and Standard Setting for WTO Obligations: Statement from Ministers in the Conference outcome document, reaffirming the provisions relating to the need to adopt international standards in respect of sanitary, phyto-sanitary and technical barriers to trade, stressing the need for members to primarily base domestic regulations on such international standards for all trade in goods. Encourage increased participation in international standard setting activities.

On 15 October 2009, following text from Australia, Brazil, Canada, China, Hong Kong China, European Communities, India, Japan, Korea, Malaysia, Mauritius, Mexico, Norway, South Africa, Switzerland, Turkey, United States and Uruguay, was circulated at the request of the Delegation of India for the inclusion in the outcome document of the 7th Ministerial Conference:

"The rapid change in the global economic environment requires the WTO to be agile and responsive in order to preserve its central role in the global trading system. With a view to maintaining the effective functioning of the rules based multilateral trading system, the WTO needs to periodically engage in a process of review of its functioning, efficiency and transparency and consider systemic improvements, as appropriate. Ministers have invited the General Council therefore, to establish an appropriate deliberative process to review the organization’s functioning, efficiency and transparency and consider possible improvements, while bearing in mind the high priority we attach to the successful conclusion of the DDA negotiations. We look forward to reviewing the progress in this regard in our next meeting."

Contributed by: Manish Sharma, LL.M. II year, NALSAR, Hyderabad.
Email: msharma28@gmail.com

GATS and Legal Services in India

2009-11-06T11:30:00.004+05:30

The GATS brought under its purview the entire gamut of services trade, as classified into 161 service activities under 12 broad sector heads in the GATS sectoral classification list.

However, this breadth of coverage was achieved at the cost of certain flexibilities. One of the key flexibilities embedded in the GATS is the discretion that a member country of the WTO enjoys in deciding which of the services sectors it wants to schedule for undertaking liberalisation commitments under the GATS rules. This is often termed a ‘positive list’ approach or a ‘bottom-up’ approach.

‘Legal Services’
Legal Service has been classified as a professional service under the category of Business services as per the World Trade Organization's Classification list of Services Sector (W/120). Description of Legal services has been defined in UNCPC (United Nations Central Product Classification) which includes legal advisory and representation services and is as follows:.

Legal Services Definition (CPC 861) - This sector corresponds to the United Nations Central Product Classification (UN CPC) at the three-digit level. The definition includes:

8611: Legal advisory and representation services in the different fields of law: (86111 - Legal advisory and representation services concerning criminal law):-
Legal advisory and representation services during the litigation process, and drafting services of legal documentation in relation to criminal law. Generally, this implies the defence of a client in front of a judicial body in a case of criminal offence. However, it can also consist of acting as a prosecutor in a case of criminal offence when private legal practitioners are hired on a fee basis by the government. Included are both the pleading of a case in court and out-of-court legal work. The latter comprises research and other work for the preparation of a criminal case (e.g. researching legal documentation, interviewing witnesses, reviewing police and other reports), and the execution of post-litigation work, in relation to criminal law.

8611: (86119 - Legal advisory and representation services in judicial procedures concerning other fields of law):-
Legal advisory and representation services during the litigation process, and drafting services of legal documentation in relation to law other than criminal law. Representation services generally consist of either acting as a prosecutor on behalf of the client, or defending the client from a prosecution. Included are both the pleading of a case in court, and out-of-court legal work. The latter comprises research and other work for the preparation of a case (e.g. researching legal documentation, interviewing witnesses, reviewing police and other reports), and the execution of post-litigation work, in relation to law other than criminal law.

8612: (86120 - Legal advisory and representation services in statutory procedures of quasi-judicial tribunals, boards, etc.):-
Legal advisory and representation services during the litigation process, and drafting services of legal documentation in relation to statutory procedures. Generally, this implies the representation of a client in front of a statutory body (e.g. an administrative tribunal). Included are both the pleading of a case in front of authorized bodies other than judicial courts, and the related legal work. The latter comprises research and other work for the preparation of a non-judicial case (e.g. researching legal documentation, interviewing witnesses, reviewing reports), and the execution of post-litigation work.

8613: (86130 - Legal documentation and certification services) :-
Preparation, drawing up and certification services of legal documents. The services generally comprise the provision of a number of related legal services including the provision of advice and the execution of various tasks necessary for the drawing up or certification of documents. Included are the drawing up of wills, marriage contracts, commercial contracts, business charters, etc.

8619 (86190 - Other legal advisory and information services):-
Advisory services to clients related to their legal rights and obligations and providing information on legal matters not elsewhere classified. Services such as escrow services and estate settlement services are included.

GATS schedules distinguish between the following legal services: (a) host country law (advisory/representation); (b) home country law and/or third country law (advisory/representation); (c) international law (advisory/representation); (d) other legal documentation, certification, advisory, and information services.
The GATS covers all advisory and representation services in the various fields of law and in statutory procedures. This includes notarial services since they are supplied on a commercial basis. However, activities related to the administration of justice (judges, court clerks, public prosecutors, etc.) are effectively excluded from the scope of the GATS as in most countries it is considered a “service supplied in the exercise of governmental authority.”

Modes of Supply and Legal Services
In order to capture the complex nature and diverse forms of international transactions in services, the GATS adopted a novel approach of classifying the entire range of services trade into four ‘modes’:
• Mode 1 (cross-border)
• Mode 2 (consumption abroad)
• Mode 3 (commercial presence)
• Mode 4 (movement of natural persons)
Major ways in which service suppliers serve their clients (corresponding to the modes of supply mentioned above). Countries have to say whether or not they allow:
• foreign firms to deal with clients in their market from across the border (i.e. to give legal advice electronically);
• their citizens to travel abroad to visit the supplier ( e.g. a foreigner comes to India to consume the services of an Indian lawyer of law firm) in order to consume a service;
• foreign service suppliers to establish an operation ( e.g. law firm etc) in their market; or
• suppliers to enter the country in person ( e.g. a lawyer) to do business.
As a result, firms know where they stand in foreign markets and in their dealings with foreign clients. If they encounter barriers related to these modes of supply, they can verify whether the GATS Member concerned has made legal commitments in this area and ask for the assistance of their government in resolving the issue. All Members have recourse to a WTO dispute settlement process in case another Member does not conform to its obligations.

Provisions/Commitments under GATS
The GATS, among other elements, consists of a series of general provisions that largely apply across the board to all measures affecting trade in services.
However, the GATS also includes a set of ‘specific commitments’ that applies only to service sectors that are enlisted in a member’s GATS schedule. For each specific sector scheduled by it, a member undertakes ‘specific commitments’ on market access (MA) and national treatment (NT) for each mode of services trade.
Importantly, members need not grant full MA and can deny NT by inscribing limitations on MA and/or NT in their respective schedules.
Members are at liberty to schedule their commitments in one of the following ways:
(i) Full commitment: “none” or “no limitations”, which implies that the Member does not seek in any way to limit market access or national treatment through measures inconsistent with Articles XVI or XVII of GATS.
(ii) Commitment with limitations: the Member details the measures maintained which are inconsistent with market access or national treatment, and implicitly commits itself to take no other inconsistent measures.
(iii) No commitment: “unbound” indicates that the Member remains free to maintain or introduce measures inconsistent with market access or national treatment.
(iv) No commitment technically feasible: “unbound*” indicates that in the sector in question, a particular mode of supply cannot be used.

“Commitments” generally involve the following obligations:

I) General Obligations:-

MFN: The ‘most favoured nation’ obligation applies across all sectors and all modes of supply, unless otherwise indicated through an exemption in the ‘MFN Exemption List’. This obligation forces all members to give the most favourable treatment that it has accorded to any of its trading partners to all other WTO members. In short, it obliges each country to not discriminate against any of its fellow members in the WTO.
Transparency: This principle obliges all members to identify and publicise all rules and regulations affecting trade in services. Any change in the regulations must also be made public. Information about any particular regulation must be readily available through national enquiry points.

II) Specific Obligations:-

National Treatment: This obligation requires non-discrimination between foreign and domestic services and service suppliers once they have entered the market. If a member wishes to discriminate for in a particular service he must enter it into its ‘Schedule of Commitments’.
Market Access: This obligation means that there can be no discrimination among services and service suppliers and that the only restrictions that can be enforced by members, provided they are scheduled (in the ‘Schedule of Commitments’ as mentioned above), are quantitative and legal restrictions on:
• the number of service operations
• the value of service transactions or assets
• the number of operations or quantity of output
• the number of natural persons supplying a service
• the participation of foreign capital
• the type of legal entity

Requests made to India under Legal Services (GATS)
There are certain requests to India by a number of countries to open up the legal services market. The plurilateral request in legal services is cosponsored by Australia, Canada, the EC, Japan, New Zealand, Norway, and the USA. Certain other countries have also joined in with the above cosponsors requesting India to open up its legal services sector.

For details of requests made to India by different countries and commitments offered please see the consultation paper of the Department of Commerce, Government of India available at: http://commerce.nic.in/trade/consultation_paper_legal_services_GATS.pdf

Maiden Post Graduate National Moot Court Competition at Pune

2009-11-06T09:28:00.002+05:30

Department of Law, University of Pune is organising a Post Graduate National Moot Court Competition which is to be held on January 23-25th 2010. The moot problem is on the adjudication of issues of Bio-Piracy, Human Rights, State Responsibility and other aspects of International law.

For more details please see the 'News and Announcements' section of the University of Pune website http://www.unipune.ac.in/

Foreign Law firms and India

2009-11-05T19:49:00.002+05:30

In 1994, two New York-based and one London-based law firm had sought permission from the Reserve Bank of India (RBI) to begin liaison office activities in India to advise and assist non-Indian clients in connection with their activities in India and outside India. The three law firms, White & Case (NY), Chadbourne & Parke (NY) and Ashurst Morris Crisp (UK) were granted permission by RBI under the Foreign Exchange Regulation Act (FERA) to start liaison activities . But the entry of foreign law firms was put on hold by an interim order of the Bombay High Court.

In the year 2005 Britain and Australia had approached the Bar Council of India seeking permission to set up their law firms in the country. But the Bar Council of India made it clear to them that it was opposed to the entry of foreign lawyers and foreign law firms in the country. An American law firm had also approached the BCI to open its branch office here to render legal services. But its request was also turned down.

Despite the resistance to their entry, foreign law firms have tie-ups and associate offices in India with whom they continue to work. So, even if they have not set up offices in India, they have liaison offices or India departments that effectively do the work: the London-based Clifford Chance and Baker & McKenzie, both have lawyers for India-related practice. Allen & Overy LLP entered into a referral, training and joint marketing relationship in 2008 with Trilegal. A Washington-based firm set up by a Jones Day partner in 1995, with New Delhi-based P&A Law Offices. London’s Linklaters LLP allied with Mumbai-based Talwar Thakore & Associates in 2007. Clyde & Co. has plans to ener into some kind of an arrangment with ALMT Legal. Certain other law firms in India have alliances with foreign law firms.

Many British and American Law firms have set up Indian Practises based in London, Dubai, Hong Kong or Singapore or forged alliances with leading domestic firms to refer work in and out of India.

There has been a change in the government’s policy. The Government came up with the Limited Liability Partnerships Bill (LLPs) which became an Act in the year 2008. This Act enables such law firms (as well as accounting firms) operate in India by entering into Joint Ventures.

Pending Case: Lawyers’ Collective vs. Bar Council of India & Ors. (Bombay High Court- WP/1526/1995)
In 1995, Lawyers’ Collective, a public interest trust set up by lawyers to provide legal aid, moved Bombay High Court challenging the right of foreign law firms to “practice law” in India. They alleged that these firms were exercising active legal practice in India against the statutory requirements and the permission granted by Reserve Bank of India to merely operate as liaison offices.

The High Court in an interim order had held that the practices engaged by these firms amounted to “practicing the law” and hence were not to be permitted. The Court also said that, in India, since there is no distinction between solicitors and advocates, both counselling and providing legal advice to the clients will be an 'act' of Advocacy and the representatives of these foreign firms will have to be enrolled under the Advocates Act. (The word attorney was removed from the Act by amendments to the Act)

The foreign law firms challenged the HC order in the Supreme Court, which in March 1996, reverted the case back to Bombay HC, asking it to decide the matter expeditiously.

Question which arose in this case: whether the term “practice the profession of law” extends beyond appearing before a court to advising clients and drafting legal documents?

The Court had stated in its interim order that the Advocates Act, 1961, provides that only advocates enrolled in India are entitled to practice the profession of law in India. It argued that the term “practice the profession of law” would include not only appearance before courts and giving legal advice as attorney, but also drafting legal documents, advising clients on international standards and customary practices and transactions. The HC said, “In our view, establishing a firm for rendering legal assistance and/or for executing documents, negotiations and settlements of documents would certainly amount to practice of law.”

The judges held that the RBI licence did not amount to a permission to practice law, but only to establish a branch office to act as a communication channel between the head office and their parties in India. The HC ordered the government to conduct an inquiry into the issue and take appropriate action against the firms.

White & Case pulled out voluntarily after the ruling, as did Chadbourne, though Ashurst remains in New Delhi. No new licenses are being issued. The writ petition in the Bombay High Court is on the ‘Final Hearing’ stage now.

About the ITBL Blog !!

2009-11-02T22:00:00.000+05:30

The era of globalization has transformed the way business is carried on all over the world. International trade has become the key word for the economic development of all countries. As a consequence, cross border commercial transactions have proliferated. With these developments, a plethora of legal issues have emerged in such cross border transactions. The birth of World Trade Organisation (WTO) and the agreements under its ambit have caused key changes in legal systems of almost all member countries. With that the negotiation and conclusion of Regional Trade Agreements between various nations have resulted in a complex web of international rules and regulations. Since 1990, India’s share in International Trade has been growing consistently. With an increase in Trade there is also a rise in the legal problems in International Business. This blog exclusively and exhaustively deals with such legal issues.
This blog aims to discuss various legal issues related to International Trade and International Business with a special focus on India. This blog caters to the needs of students, academicians, traders and other legal firms and organisations.
The blog studies WTO laws and policies with an in-depth examination of India’s involvement in WTO and the impact of such laws and policies on India. Besides WTO, an effort has been made to study India’s regional trade bindings with various countries from a Trade law point of view.