PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
B: Legal Services
Key Findings:
• A shortage of judges, lengthy appeals and manual recordkeeping add to case backlogs.
• With 25 million cases pending in India, arbitration is the preferred course.
• Foreign lawyers are barred from practicing Indian law; market opening is not likely soon.
• Cross-border work focuses on incorporation, IP, real estate; M&A to follow.
• Legal process outsourcing (LPO) business is booming.
Market Overview
India’s legal structure is, for the most part, rooted in English common law. Its system of the
Supreme Court, 18 high courts, and thousands of subordinate courts, tribunals, and local dispute
resolution bodies administer more than 2,500 federal laws and more than 25,000 state statutes,
plus administrative and local ordinances.
Many of India’s laws date back to the 19th century colonial period but have implications today:
the local government in Delhi used an 1867 law penalizing innkeepers for refusing to offer water
to passersby to take a five-star hotel to court in the 1990s, for example, and the 1885 Indian
Telegraph Act has been used by a state-owned television network to monopolize broadcast
rights for cricket matches. As of 2006, the 1948 Factories Act was still in place, mandating
whitewashing of factories rather than painting; drinking water provided in earthen pots, not
water coolers; and sand in red buckets rather than fire extinguishers.
Central and state laws often conflict. Business call centers are technically illegal under certain
state statutes. In 2005, the Labour Ministry of the Haryana government invoked a 1958 law
prohibiting women from working night shifts, applying it to call centers in Gurgaon. Women
made up 40% of the call center workforce and the centers have to operate at night because of
the time difference with Western countries.
Patience is a Virtue
Cases can be tied up in court for years: in 2005 the Law Ministry estimated that more than 25
million cases were pending in Indian courts. Civil suits constituted a third of the 22 million
pending cases in subordinate courts and 80% of the 3.5 million in the high courts.
A famous labor case involved Uttam Natake, a worker in a Bharat Forge factory in Pune. In
August 1983 Natake was found sleeping on the factory floor just before noon. He had already
been cited three times previously, and the company began disciplinary proceedings, which took
five months, after which he was fired. More than a decade of appeals by both sides followed,
until 1995, when the court awarded Natake a large back pay settlement because he was by then
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