When India awakes…

A famous French politician and writer, Alain Peyrefitte, used (after Napoleon, allegedly) the words “When China awakes, the world will shake” as the title of his book published in 1973, which was proven as an anticipation of what happened since leading to the current weight of China as one of two superpowers of the world.

Signs show that the same might be happening with regard to India. A free trade agreement FTA has been signed with Australia (ECTA) and another FTA is in the process of being negotiated with the European Union, with discussions starting in June 2022.

The time has come to take a closer look at the Indian legal system.

Newsletter No. 11 - Girard-Foley's links with India

We have developed close links in India over a long period of years, through several instruction involving French and Indian companies, from SME’s to MNC’s. We have also a long standing formal relationship between law firms acknowledged by the Bar Council of Paris with a high profile firm in New Delhi.

Our understanding of India is further enhanced by the similarities between Indian law and Malaysian law, where our firm is headquartered

The commonalities between Indian laws and the law of Malaysia

From a common base, the one of English common law with local characteristic, India has been and still is a model for Malaysia.

For example, the Malaysian Contracts Act 1950 (Act 136) is a replica of the similar Indian law The Indian Contract Act 1872.

Some chapters of the law on contracts which have been separated and embodied in a distinct statute (“Sales of Goods”, “Partnership”) have been drafted in parallel to each other.

Principles of common law which are not found in all jurisdictions are shared by the two legal systems, such as the unenforceability of clauses that are deemed to create a “restraint of trade” which applies inter alia to non competition clauses in employment contracts.

Other basic concepts are interpreted in a similar manner in both jurisdictions, such as “agency” and “breach of contract”.

Likewise in criminal law, without being similar, the Criminal Procedure Code 2012 (Act 593) and the Code of Criminal Procedure 1973 of India share some of their rules, including some which are of material importance in commerce such as the admissibility of evidence, the plea bargaining and the preventive action of the police.

The cross influence of case-law

Precedents from the other jurisdiction are often quoted on a “persuasive but not binding” basis.

Indian Courts apply Malaysian law Iin some circumstances. For instance in Pantalon Retail (India) Ltd. Vs Amer Sports Malaysia Sdn Bhd & Air of 2012, the High Court de Delhi has stated that: “Indian Courts can apply Malaysian Laws in the present dispute”. Another example is the case of Malaysian International Trading v Mega Safe Deposit Vaults (P.) Ltd of 2006 of the Bombay High Court.

Sustainability and ESG

Labour laws that were once close have diverged since, but some concepts are interpreted in a way that provides some guidance to the other.

For instance, the concept of “life” and of “right to life” in section 5(1) of the Federal Constitution of Malaysia is mirrored in section 21 of the Constitution of India.

Hence, the broad definition of the right of life including a decent living standard, housing, healthy environment, health protection and women’s protection against harassment (Supreme Court Maneka Ghandi 1978) could be an inspiration for Malaysia.

Conversely, it would be a natural move for India to draw from some ESG principles adapted by Malaysia inspired by examples from Australia, New Zealand and Hong Kong.

Commercial disputes, arbitration and mediation

In respect of commercial dispute resolution, while court proceedings in India are known to progress slowly, the judiciary’s competence is undisputed. The Parties acknowledge that alternative dispute resolution (ADR), including mediation and arbitration, is available within an ADR-friendly framework

Awards from arbitration in Malaysia in conflicts involving Indian and Malaysian parties where the contract is governed by Indian law can be more easily enforced thanks to the similarities (as acknowledged in the New Delhi Court case of 2010 Sara International Ltd v. Golden Agri International Pte) between the Arbitration and Conciliation Act 1996 of India and the Malaysian arbitration Act.

In conclusion

Just like it was essential for the future to pay attention to China as soon as 1978 with the rise of the reform and openness policy pioneered by Deng Xiaoping, not is the time to do the same with India.

A main difference is that India already enjoys the benefit of a well established legal system

with its roots in the fundamentals of common law and still current bridges with other jurisdictions, especially Malaysia.

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The content above is purely for informational purposes, relating to a selected overview of legislative, regulatory and case law developments in the relevant geographical area, which is not and does not claim to be exhaustive.

It does not constitute legal advice in relation to any particular case and should not be regarded as such. A more detailed doctrinal study on any of the topics mentioned may be requested.

Philippe Girard-Foley is a Registered Foreign Lawyer accredited by the Supreme Court of Singapore before the Singapore International Commercial Court – Certificate of Full Registration under Section 36P Legal Profession Act (Chapter 61).