N&MNanda & Mehra
Advocates & Legal Consultants
Legal articles

Notes from the chambers.

Arbitration

Drafting an arbitration clause that survives a challenge

An arbitration clause is the one part of a contract that is supposed to come into its own only when everything else has failed — which is exactly why it is so often drafted carelessly. A short, complete clause prevents most jurisdictional fights later. It should fix the seat of the arbitration, the rules that will govern it, the language of the proceedings, the number of arbitrators, and a workable mechanism for appointing them. Each of those choices does real work: the seat determines which courts supervise the reference and may set aside an award; the language and the number of arbitrators bear directly on cost; and the appointment mechanism is what stops a reluctant party from stalling the whole process.

The recurring errors are familiar. Clauses that name an institution but mis-state its rules; clauses that are silent on the seat and leave parties arguing about it before they can argue about anything else; and the so-called pathological clause that points to two different forums at once. None of these is fatal in every case, but each invites a preliminary fight that good drafting would have avoided. The general lesson is that a few careful sentences agreed when relations are cordial save a great deal of expense when they are not. This note is general commentary and not advice on any particular contract.

Corporate

Foreign investment into India: choosing the right entry route

A foreign business looking at India usually has a choice between establishing a wholly owned subsidiary, entering through a joint venture with a local partner, or operating through a branch or liaison presence. The route is not merely a formality — it shapes the degree of control the investor retains, the tax position, the regulatory conditions that attach, and, often overlooked at the outset, how cleanly the investor can eventually exit. A subsidiary offers control and a familiar corporate form but carries the full weight of ongoing compliance; a joint venture brings a partner's market knowledge and relationships at the cost of shared control and the need to negotiate deadlock and exit in advance; a branch can suit a narrow, service-led presence but is more constrained in what it may do.

The right answer depends on the sector, because the conditions on foreign investment differ markedly from one sector to another and change over time. Whatever the route, the structure should be designed with the exit already in mind — the time to agree how a partner buys the other out, or how shares are transferred, is at the beginning, not when the relationship has soured. The above is a general outline of the trade-offs and not advice on any specific investment, which should be assessed against the rules in force at the time.

Intellectual property

Trade mark protection before you launch a brand in India

Clearance and early filing are almost always cheaper than litigation, and yet the most common intellectual-property problem we see is a business that has built goodwill in a name it never secured. Before a brand is launched it is worth running a clearance search to check that the mark is available and not confusingly similar to something already on the register or in use, and then filing promptly in the relevant classes. Filing early matters because rights in a trade mark are strongest when they are documented and dated; a business relying only on use, without registration, is left to prove its reputation the hard way.

That harder route is the action for passing off, which protects unregistered goodwill but requires the claimant to establish reputation, misrepresentation, and damage — a heavier evidential burden than enforcing a registered mark. Realistically, enforcement usually begins with cease-and-desist correspondence, may proceed to an application for an injunction, and is sometimes best resolved through a negotiated coexistence arrangement where the marks can sensibly sit side by side. The point of early protection is to keep those options open and inexpensive. This is general commentary, not advice on protecting any particular brand.

Disputes

Interim relief: protecting a position while a case runs

Commercial disputes are frequently won or lost at the interim stage, long before any final hearing. Litigation takes time, and during that time the thing in dispute — an asset, a contractual status quo, a confidential body of information — can be put beyond reach. Interim relief exists to hold the position steady while the substantive case is decided. Indian courts may grant injunctions to restrain a party from acting, orders preserving or securing assets so that a later judgment is not rendered worthless, and other protective directions, typically where the applicant can show a serious question to be tried, that the balance of convenience favours intervention, and that damages alone would not be an adequate remedy.

Because these applications are decided quickly and on limited material, preparation is everything. The evidence must be assembled before the application is made, the urgency must be real and explained, and the applicant must come to the court candidly, since interim relief is a discretionary remedy and a party that overstates its case or withholds material facts may lose it. Acting early, before the other side has consolidated its position, is usually decisive. The foregoing describes the general framework only and is not advice on any specific dispute.

These notes are general commentary, not legal advice on any specific matter.