Being the sixth largest economy in the world, India is rapidly expanding and becoming an appealing place for foreign investment, but in some ways, has developments to make until it matures like other competitive international markets. We speak with Sakate Khaitan, who spends his time in both UK and India, and expands on what India is doing to further its way up the international market.
You deal predominantly with insurance and litigation; what are the biggest challenges these present together, at an international level?
The litigation landscape has not altered significantly in the lower courts over time. However, there is significant progress towards clearing back log of matters in the higher courts. By some estimates the Supreme Court will have cleared its entire back log within the next couple of years.
Further recent changes to Indian arbitration law will in my view, go a long way in clearing back log of cases and reinforce sanctity of contract. These changes inter alia, require arbitration to conclude within 12 months of arbitrators being appointed. We are seeing a change in attitude of arbitrators and lawyers who are now both working towards meeting the deadline set by law. Additionally, with the launch of the Mumbai Centre for International Arbitrations my hope is an internationally recognised institutional arbitration framework will be established.
What do you find are the most disputed factors surrounding insurance and transactional work in India? How does it differ in the UK?
In the insurance sector, most disputes arise from coverage issues. The reason for such disputes is due to the pool of experienced claims handlers being shallow and loss adjusters not fully examining all facts that will permit a claims handler in determining coverage issues.
In transactional work, regulatory uncertainty causes delay and mismatch of valuation expectations deal failure.
The factors mentioned above are generally not seen in the UK market. The reasons for these differences is that the Indian market is still in its infancy while the UK is a developed market.
As the co-founder of the India Business Forum (IBF) at LBS, how do you encourage cross border investments?
Cross border deals have increased significantly. India has opened its borders to foreign direct investment and systematically demolished the licence Raj [i.e., rule]. This is led to increased inflow of capital and therefore, cross border deals.
It has become significantly easier for Indian entities making acquisitions and/or establishing presence outside India. We have seen some marque deals in the not too distant past such as the acquisition of Corus by the Tata Group and Novelis by the Aditya Birla Group.
This trend is likely to continue as corporations look to new markets for growth and Indian corporations look to acquire technology/brands to expand presence in western markets.
As a Senior Partner, how do you manage your team to ensure that they offer immense value to your clients?
Our firm is based on three core principles: excellence in service; superior client experience and respect for every individual. I lead by example and I encourage my team to believe in our core principles, set goals to grow knowledge, be empathetic and more than anything else, be happy.
In terms of insurance and reinsurance, how does India’s legislative progress compare to its neighbouring jurisdictions?
Recent legislative changes in the insurance sector have resulted in a significant increase in our work. These changes have permitted foreign joint venture partners to increase their holdings from 26% to 49% and also permitted foreign reinsurers to establish branch offices in India. Our specialisation in the sector has put us in a great position to win work in the sector and compete head to head with the largest Indian firms.
What progress do you think India still has to make?
A lot of positive steps have been taken in the recent past and a lot needs to be still done to make India business friendly. To expect a new regime to wave a magic wand to solve all problems, transient and endemic, is unrealistic. The government has taken steps in the right direction which includes amendments to the arbitration act and insurance act, a brand-new companies act and insolvency law, and the efforts that the government has been taking to digitalise the processes. Tax reforms are in the anvil. Next steps would be to take make regulatory processes smooth and certain and remove inefficiency, bureaucracy and uncertainty that our processes are riddled with.
Is there anything else you would like to add?
I would like to thank Mr. Padam Khaitan (Senior Partner Khaitan & Co.) for training me in my formative years, Clyde & Co for giving a big boost to my career by forming an association with my erstwhile firms ALMT Legal and Clasis Law and helping me understand the insurance market in great depth and my core team who have all continuously supported me since they have graduated from law school.
