International Law Section Webinar
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ORANGE COUNTY BAR ASSOCIATION INTERNATIONAL LAW SECTION WEBINAR Doing Business with India & Mexico – Laws, Pitfalls and Best Practices Monday, May 17, 2021 EXCELLENCE IN PRACTICE. DIVERSITY IN PEOPLE. DOING BUSINESS WITH INDIA & MEXICO: LAWS, PITFALLS AND BEST PRACTICES PRESENTED BY MONISHA A. COELHO RAUL F. SALINAS m c o e l h o @alvaradosmith.com r s a l i n a s @alvaradosmith.com MONISHA A. COELHO • Dually licensed in California and India. • Guides clients through US-India cross-border legal matters, including setting up U.S. operations, market entry, and India-related real estate matters. • Resolves complex U.S.-based litigation and arbitration such as breaches of contract, technology theft, and partnership disputes. • Represents individuals, multinational companies, and Fortune 100 corporations. [email protected] | 213.229.2400 ALVARADOSMITH.COM RAUL F. SALINAS • Represents numerous Latin America-based companies with operations in the U.S. • Partners with clients to identify risks, set strategy and develop plans to meet a wide range of objectives, including geographic expansion, market consolidation, and more. • Solid foothold in both the U.S. and Latin American business cultures and fluency in Spanish and English. [email protected] | 213.229.2400 ALVARADOSMITH.COM AGENDA OVERVIEW & DEVELOPMENTS LEGAL SYSTEMS & LAWS PITFALLS & BEST PRACTICES Q&A ALVARADOSMITH.COM INDIA • Major Cities – New Delhi (capital); Mumbai, Kolkata, Bangalore, Chennai, Hyderabad, 28 States/8 union territories • Population - 59% working age (15-54 years); 74% literate • Economy – GDP – 4.8%; 35% Urban, 60% Rural; Savings Rate – 30% • Employment – Agri -47%; Industry - 22%; Services – 31%; ALVARADOSMITH.COM INDIA • Markets – US largest export partner - $146.1 billion(2019); Exports - 15.6%; Imports - 5.5% • India FDI to US - $16.7 billion (2019) - professional, scientific & technology services, financial, manufacturing • U.S. FDI - $46 billion. Energy, Healthcare, IT, Aerospace/Defense. Google, Facebook , Amazon. JV best option ALVARADOSMITH.COM DEVELOPMENTS: INDIA PIVOT FROM CHINA Diversify supply chains and manufacturing relieving trade wars and overreliance of China. LOW LABOR COSTS Large and skilled workforce with low labor costs. INFRASTRUCTURE A focus and investment in infrastructure needed - including to boost industrial sector. ALVARADOSMITH.COM LEGAL SYSTEM: INDIA BRITISH FEDERAL INTERNATIONAL COMMON V. ORGANIZATIONS LAW STATE - Barristers & Solicitors ; No Juries - Constitution – fundamental rights - Accepts compulsory ICJ jurisdiction with reservations - Three-tiered court system similar to - Most laws national, states have U.S. court system. Supreme Court different licensing regulations - ICC has final appellate power over all - Separate marriage/inheritance laws state and federal matters. for Muslims, Christians, Hindus - No Foreign Lawyers, Temporary Rep ok ALVARADOSMITH.COM LAWS: INDIA • Foreign Exchange– FEMA, RBI Guidelines, limits on FDI in Indian companies • Corporate Law – entities (LLC, corps.), liability of directors like US • Intellectual Property – limited protection of IP, no trade secret law • Tax - double taxation treaty with US; US tax on worldwide income • Arbitration – Indian Arbitration & Conciliation Act, UNCITRAL, NY Convention Recognition & Enforcement Foreign Arbitral Awards ALVARADOSMITH.COM MEXICO • Population • Economy • Market Share ALVARADOSMITH.COM DEVELOPMENTS: MEXICO NEAR-SHORING SUPPLY CHAINS Offers skilled work force, and quality low-cost manufacturing in North America CAUTIOUS OPTIMISM ABOUT RECOVERY Government has set goal to vaccinate all eligible citizens within 18 months. Expecting a slow path to recovery. REFORMS Expected reforms in tax arena, labor obligation, and imports/exports ALVARADOSMITH.COM LEGAL SYSTEM: MEXICO CIVIL NOTARIO COURTS LAW PUBLICO Five major codes: Civil, Civil An attorney responsible for the Three-tiered court system similar to Procedures, Commercial, Criminal, legality of the content of transactional U.S. court system. Supreme Court has and Criminal Procedures. documents and their compliance with final appellate power over all state civil code. and federal matters. ALVARADOSMITH.COM LAWS: MEXICO • Lending and Investments • Corporate Law • Intellectual Property • Tax • Foreign Arbitration ALVARADOSMITH.COM PITFALL: DELAYS ALVARADOSMITH.COM PITFALL: DELAYS BEST PRACTICE ALVARADOSMITH.COM PITFALL: BUREAUCRACY ALVARADOSMITH.COM PITFALL: BUREAUCRACY BEST PRACTICE ALVARADOSMITH.COM PITFALL: PRACTICAL VS. THEORY ALVARADOSMITH.COM PITFALL: PRACTICAL VS. THEORY BEST PRACTICE ALVARADOSMITH.COM QUESTIONS? MONISHA A. COELHO RAUL F. SALINAS [email protected] [email protected] 213.229.2400 213.229.2400 LOS ANGELES | ORANGE COUNTY | SAN FRANCISCO | WWW.ALVARADOSMITH.COM Pasl Wind Solutions Private ... vs Ge Power Conversion India Private ... on 20 April, 2021 Supreme Court of India Pasl Wind Solutions Private ... vs Ge Power Conversion India Private ... on 20 April, 2021 Author: Rohinton Fali Nariman Bench: Rohinton Fali Nariman, B.R. Gavai, Hrishikesh Roy REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1647 OF 2021 [ARISING OUT OF SLP (CIVIL) NO.3936 OF 2021] PASL WIND SOLUTIONS PRIVATE LIMITED ...APPELLANT VERSUS GE POWER CONVERSION INDIA PRIVATE LIMITED ...RESPONDENT JUDGMENT R.F. Nariman, J. 1. Leave granted. 2. The present appeal raises an interesting question as to whether two companies incorporated in India can choose a forum for arbitration outside India and whether an award made at such forum outside India, to which the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 [New York Convention] applies, can be said to be a foreign award under Part II of the Arbitration and Conciliation Act, 1996 [Arbitration Act] and be enforceable as such. Factual Background 3.1. The appellant is a company incorporated under the Companies Act, Signature Not Verified Digitally signed by R Natarajan 1956 with its registered office at Ahmedabad, Gujarat. The respondent is a Date: 2021.04.20 16:06:51 IST Reason: company incorporated under the Companies Act, 1956 with its registered office at Chennai, Tamil Nadu, and is a 99% subsidiary of General Electric Conversion International SAS, France, which in turn is a subsidiary of the General Electric Company, United States. 3.2. In 2010, the appellant issued three purchase orders to the respondent for supply of certain converters. Pursuant to these purchase orders, the respondent supplied six converters to the appellant. Disputes arose between the parties in relation to the expiry of the warranty of the said converters. In order to resolve these disputes, the parties entered into a settlement agreement dated 23.12.2014. Under clauses 5.1 and 5.2 of the settlement agreement, the respondent agreed to provide certain delta modules along with warranties on these modules for the working of the converter panel. Clause 6 of the settlement agreement contained the dispute resolution clause which reads as follows: Indian Kanoon - http://indiankanoon.org/doc/79928496/ 1 Pasl Wind Solutions Private ... vs Ge Power Conversion India Private ... on 20 April, 2021 6. Governing Law and Settlement of Dispute 6.1 Any dispute or difference arising out of or relating to this agreement shall be resolved by the Parties in an amicable way. (A minimum of 60 days shall be used for resolving the dispute in amicable way before same can be referred to arbitration). 6.2 In case no settlement can be reached through negotiations, all disputes, controversies or differences shall be referred to and finally resolved by Arbitration in Zurich in the English language, in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce, which Rules are deemed to be incorporated by reference into this clause. The Arbitration Award shall be final and binding on both the parties. 6.3 The Agreement (together with any documents referred to herein) constitutes the whole agreement between the Parties and it is hereby expressly declared that no variation and / or amendments hereof be effective unless mutually agreed upon and made in writing. 3.3. Disputes arose between the parties pursuant to the settlement agreement whereby the appellant claimed that warranties that were supposed to be given for converters were not so given, whereas the respondent argued that the warranties covered only the delta modules and not the converters. Thus, on 03.07.2017, the appellant issued a request for arbitration to the International Chamber of Commerce [ICC]. On 18.08.2017, the parties agreed to resolution of disputes by the sole arbitrator appointed by the ICC. It was agreed between the parties, as was reflected in the request for arbitration and in the terms of reference to arbitration, that the substantive law applicable to the dispute would be Indian law. 3.4. The respondent filed a preliminary application challenging the jurisdiction of the arbitrator on the ground that two Indian parties could not have chosen a foreign seat of arbitration. Importantly, the appellant opposed the said application and asserted that there was no bar in law from this being done. By Procedural Order No.3 dated 20.02.2018, the learned sole arbitrator, Mr. Ian Leonard Meakin, dismissed the respondents preliminary application, holding as follows: The Tribunal finds that two Indian parties can arbitrate outside India. The Tribunal is persuaded that the Supreme Court of Indias decision in Reliance Industries