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Analysis of Cyber Laws in UAE, Australia And China

By: Apoorva B N

ABSTRACT

In the modern swift- moving world, computers and internet are no more a privilege. Internet facilities have become a necessity as it is the par on course for any individual’s life today. Today, we have achieved so many advancements in the technological arena that it is next to impossible to even imagine our lives without computers or the internet. Now that internet has made its way to almost every aspect of human life, along with its blessings are its share of dangers and threats that haunt individuals today. In order to regulate the use of internet and everything that comes with it, ‘Cyber law’ emerged as a necessary facet of law. Cyber law deals with disputes arising in the internet domain, including matters like data protection, privacy concerns, identity left, electronic signatures, information technology and security. As information technology is looking at advancements taking place at a rapid rate, law regarding its regulation also needs to be updated at the same rate. In India, the main legislation that seeks to regulate information technology and related aspects is the Information Technology Act, 2000. Various amendments are being made to this legislation from time to time to be on par with the technological advancements that are taking place in the IT field. Similarly, this article aims to get an understanding and a brief analysis of the cyber laws of other jurisdictions like UAE, Australia and China.

INTRODUCTION TO INFORMATION TECHNOLOGY (IT)

Technological advancement is one of the most important factors contributing to a country’s economy. It also brings about modern rapid changes to the social lives of the individuals. Advancement in technology and science brings about rapid growth in employment opportunities thereby increasing the GDP of the country that enriches the economy as a whole. Information Technology is the study and use of computer systems to store, retrieve and send information.[1] In order to regulate information technology, especially facets of it including internet law, information and digital security, IT law or cyber law has emerged as a necessary aspect of law.

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CYBER LAWS IN UAE

UAE is said to be the most digitally advanced Arab country. It had also made its place in the top 20 digital economies in 2018[2]. In 2017, two breakthrough digital initiatives, the Dubai Internet of Things (IoT) Strategy and the Digital Wealth Initiative, were launched[3]. Securing an important position in the word for being digitally advanced, UAE has its own set of cyber security laws for the regulation of the cyber threats and like offences that form a part of any technological advancement. Therefore, the UAE has a comprehensive legislation on cyber laws called the ‘Cyber Crimes Law 2012’ (UAE-Law No. 5 of 2012)[4]. Few of the important offences and penalties that are covered under this legislation are—

  • Promoting or publishing pornographic material or indecent act and gambling activities.
  • Publishing of others information and photos on internet
  • Violating others privacy by eavesdropping and publishing the information using the social media
  • Human Trafficking
  • Data Forgery of prohibitive data
  • Unauthorized use and interception of computer services

Penalties for imprisonment for a term which may extend to ten years and a fine up to 200,000 AED.

The National Electronic Security Authority (‘NESA’) implements the Cyber Law and regulates the protection of communications networks and information systems in the UAE.[5] The Telecommunications Regulatory Authority (‘TRA’) was established by the Telecommunications Law to supervise the telecommunications division in the UAE. The TRA set up the Computer Emergency Response Team (CERT) to advance the standards of information security and protect the IT set-up.

Information Security Regulation (ISR) standards from Dubai Smart Government mandates government entities in Dubai to implement requirements and controls stated in the standard to ensure appropriate level of confidentiality, integrity, and availability of information assets.[6]

These were the key features of the Cyber law infrastructure in the UAE.

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CYBER LAWS IN AUSTRALIA

The legislations that deal with cyber and Information technology laws in Australia are as follows[7]—

  1. Australian Privacy Principles (APP): It is an amendment made to the Privacy Act, 1983 including various other amendments like—
  • The Privacy and data protection Acts, 2014-Victoria ;
  • Privacy and data protection Act, 1998– New south Wales;
  • Privacy and information Act, 2009– Queensland;
  • Personal information Privacy Act, 2004– Tasmania;
  • Information privacy Act, 2014– Australian capital territory;
  • Information Act, 2002– Northern territory.
  1. The Cybercrime Act, 1995: In August 2012, the Government passed the Cybercrime Legislation Amendment Act 2012(Cth) (CLAA). The purpose of the CLAA was to empower Australia to assent to the Council of Europe Convention on Cybercrime (Cybercrime Convention), the only international treaty on cybercrime. The Cyber Crime Act, 1995 was very much based on the international convention on cybercrime and it contains various offences relating to the unauthorised access, modification, or impairment of data and restricted data (sections 477.1, 477.2 and 478.1 of the Criminal Code).
  2. TELECOMMUNICATION ACT, 1997—The main objective of this legislation is to protect the privacy of individuals who use Australian telecommunication systems related to real time communications.[8]

These were the key Cyber law legislations of Australia and their objectives.

When it comes to high tech crime or cybercrimes of national importance, the accountability of investigation and response is conferred to Australian Federal Police (AFP). They possess jurisdiction over cases of cybercrime concerning online frauds affecting any governmental institution. Their jurisdiction further ranges to the investigation of cases related to virtual child sex harassment and exploitation, child protection and tourist child sex offenders.[9]

The Director of Public Prosecutions prosecutes on violations relating to unauthorised admission to data, damage caused to electronic communication and use of carriage services to harass or cause a wrongdoing, within sections 478.1(1), 477.3(1) and 474.17 of the Criminal Code (Cth).[10]

The New South Wales Police are conferred with powers to investigate and prosecute online fraudsters in offences in areas like internet banking, mobile banking, phishing, mule recruitment, shopping and auction site fraud, scams, spam and identity theft, child sexual exploitation and cyber bullying offences.[11]

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CYBER LAWS IN CHINA

The Chinese Government has always laid emphasis on the advancement in science and technology. Their innovation model includes huge projects in areas like Nano Technology, biotechnology, aircrafts, high-end generic microchips etc. Cybersecurity law of the People’s Republic of China was enacted by the e Standing Committee of the National People’s Congress on November 7, 2016 and was enforced on June 1, 2017. The key features of the cyber law of China are as under[12]—

  1. Security obligations of ISPs
  2. Rules for the transnational transmission of data at critical information infrastructure
  3. Rules for personal information protection
  4. Principle of cyberspace sovereignty

It also provides intricate rules and definitions on legal liability for various unlawful conducts, and sets a range of punishments like fines, suspension for modification, withdrawal of licenses and commercial licenses among others. The law therefore enforces cybersecurity and administrative authorities with powers and duties to implement the law against illegal activities.

Relevant cases in China[13]—

Sina Weibo v. Maimai (2016) was the first unfair competition case concerning big data analytics in China. The central issue for the court to decide was whether the alleged “unauthorized collection and use of data” and its related activities constitute unfair competition under the Anti- Unfair Competition Law. The case is a landmark decision to address one of the important questions on competition for data resources in the internet industry: to what extent data scraping (both personal data and other data) targeting a competitor could be potentially caught by the rules of unfair competition.

Tencent v. Douyin (2019) – case concerning the ownership of users’ ID, nicknames and profile pictures.

Facts: Douyin had entered into a Developer Agreement with WeChat and QQ platforms, and had access to users’ WeChat and QQ IDs, nicknames and profile pictures. Douyin had shared those data with Duoshan, a social networking product run by its affiliate. WeChat and QQ platforms claimed that the unauthorized use of IDs, nicknames and profile pictures of their users constitute unfair competition. The court granted a temporary injunction restraining Douyin from using those user data until the date of final judgment. It remains to be seen whether the court would consider the case following the same logic of the Maimai case.

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CONCLUSION

We can therefore conclude on being able to have understood the meaning and importance of information technology and how it has become an inevitable and a significant aspect of human life today. We also understood the IT laws or cyber laws that are codified in various jurisdiction across the world, like UAE, Australia and China. By the above stated information, it is safe for us to conclude that among the countries whose cyber laws have been discussed in this article, China appears to be the most technologically advanced country thereby making it better equipped in IT or cyber laws to regulate the threats that will be posed with technological advancements. Secondly, UAE is also seen to have been making efforts and taking efficient steps to get their IT or Cyber law infrastructure well- equipped. Australia appears to be relatively backward in terms of technological advancements in comparison with China and UAE. But Australia’s latest technological advancements have given rise to good legal backing by way of the cyber law legislation of the country.

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[1] ‘WHAT EXACTLY IS INFORMATION TECHNOLOGY (IT)’, workforce.com, https://www.workforce.com/news/what-exactly-is-information-technology-it

[2] CLEOFE MACEDA, ‘UAE MOST DIGITALLY ADVANCED IN ARAB WORLD’, GULFNEWS, https://gulfnews.com/technology/uae-most-digitally-advanced-in-arab-world-1.2239034

[3] Ibid.

[4] BASSAM ZA’ZA’, ‘UNDERSTANDING UAE’S CYBERCRIME LAW AND PENALTIES’, GOING OUT, SEPTEMBER 12, 2015 07:00, https://gulfnews.com/going-out/society/understanding-uaes-cybercrime-law-and-penalties-1.1564565#:~:text=the%20uae%20cybercrime%20law%20no,and%20seriousness%20of%20the%20cybercrime.

[5] IBID.

[6] COMPLIANCE AND DATA PROTECTION SERVICE, RNS TECHNOLOGY SERVICES, https://www.rnstechnology.com/compliance-data-protection/#:~:text=information%20security%20regulation%20(isr)%20standards,compliance%20with%20local%20regulations

[7] KING & WOOD MALLESONS, ‘AUSTRALIA’S CYBERCRIME LEGISLATION’, LEXOLOGY, https://www.lexology.com/library/detail.aspx?g=4ab62fdd-f177-47eb-b02d-e327cf9833a9

[8] “Cybercrime Laws in Australia.” lawteacher.net. 11 2018. All Answers Ltd. 12 2020 https://www.lawteacher.net/free-law-essays/australian-law/cybercrime-laws-in-australia-8255.php?vref=1

[9] PAVUL LEGAL, ‘CYBERCRIME LAW IN AUSTRALIA’, PAVUK, 2 June 2018, https://www.pavuklegal.com/cybercrime-law-in-australia/

[10] PAVUL LEGAL, ‘CYBERCRIME LAW IN AUSTRALIA’, PAVUK, 2 June 2018, https://www.pavuklegal.com/cybercrime-law-in-australia/

[11] Ibid.

[12] LAUREN MARANTO, ‘WHO BENEFITS FROM CHINA’S CYBERSECURITY LAWS?’, CSIS, https://www.csis.org/blogs/new-perspectives-asia/who-benefits-chinas-cybersecurity-laws#:~:text=In%20June%202017%2C%20the%20China,for%20China’s%20present%20day%20guidelines.&text=The%20law%20requires%20that%20data,to%20government%2Dconducted%20security%20checks.

[13] Recent privacy case law update in China, Dentons, file:///C:/Users/Apoorva%20Narendranath/Downloads/8b0990bc-f987-428d-b3c1-4eea30fbce82.pdf

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Role of Flag States under United Nations Convention on the Law of the Sea (UNCLOS)

By: Shubham Bhalla 

INTRODUCTION

 The development of flag states started in 1000 BC. The Egyptians used them for the first time for identity purposes. The usage of flag advancement increases in the Stone Ages for identification and in middle age, it has been used as a symbol of the nation. The Law of the Sea Convention explains the duties of Flag States on a large scale in comparison to previous conventions. In Public International Law, it is concerned within the maxim used in the North Sea Continental Shelf cases, Opinio Juris et necessitatis, refers to the psychological element representing the State that acts as they are fulfilling a legal Requirement which is obligatory for them. It also represents the establishment of an International Custom which has been sought for recognition earlier among other states, in the condition of taking certain practices obligatory.[1]

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In the early 19th Century, the ‘Lotus case’ revealed the essential for creating a new customary rule of International Law i.e Opinio Juris. In this case, it has been seen that even if the state has no jurisdiction in exercising their power over crimes committed on High Seas in respect to the Flag States then the French Government had no proof for the act, which had legal obligation over. This case has been criticized majorly for allowance of all those things which is not forbidden under International Law. Later, it has been overruled through the Geneva Convention on Law of Sea, 1958 by application of Article 11 of the convention, stated as ‘No criminal or disciplinary proceedings, except before the judicial/administrative authorities of either the flag State or of the State of which they are citizens, can be initiated against the persons responsible for the collision’.[2]

The practice of State establishes the coastal state in exercising its jurisdiction beyond the territorial jurisdiction by taking control of foreign vessels, to prevent the threat and enforce their rule of law. The example of North Sea Continental Shelf Cases is classical here which speaks about the provision of universal jurisdiction concerning the crimes of piracy. In today’s phenomenon, States are not free to see the resources of the sea, it is due to the “conservation and Co-operation” under Modern International Law. It is all related to the requirement of new legal order which combined as the balance of interests, between exploitation and conservation of the sea Law, from free seas to clean seas and from the peaceful uses and Strategic considerations to the balance between the Coastal Interests and Flag Interests.

The freedom of Sea well explained by the Jurist Lauterpacht, “Freedom of the seas’ true purpose is to ensure freedom of navigation, unhampered by exclusive claims of the seas’ true purpose is to ensure freedom of navigation, unhampered by exclusive claims of individual States, and freedom of utilization of the sea resources to a degree to which they can be equitably utilized by all”.[3]

WHAT IS ‘FLAG STATE’?

The state will be called “Flag State” where the Ship has been registered in that particular Country. It is deemed to be a Home Country for a Ship. The Flag state has the overall responsibility to ensure that the ship or vessels flying its flag in compliance with the International Treaties, Conventions, Regulations, and other Laws applicable. Here, the inspection is carried out within the issue of certificate every time, which is based on National regulations and ratified by that Flag State. So, Safety is measured by the authority. It is a planned perspective as there is the issuance of certificate after every inspection. The flag State does not maintain any threat matrix as compared to Port State under Public International Law. [4]

In the case of Naim Molvan v. Attorney General for Palestine[5], the court held that the ship sailing without the flag of any state has no right of freedom of navigation. This case put a legal regime of a vessel on the seas. The flag helps in settling the responsibility where Rights should be applicable concerning that particular vessel. The flag gets its recognition with the codification of the usage under the High seas convention and ultimately under the United Nations Convention on Law of the Sea (UNCLOS) 1982.

ROLE OF FLAG STATE 

  • ARTICLE 94- DUTIES OF FLAG STATES

Every State shall efficiently execute its power in administrative, technical, and social matters over ships flying its flag. Law of the sea convention prescribes in the second Para of Article 94, a duty of the flag State to maintain regular checks upon the seaworthiness of ships, to maintain a register of the vessel, to take measures to ensure safety at sea concerning the construction, equipment, and seaworthiness of the vessel.

To ensure that crews are qualified, to hold inquiries into shipping casualties, to effectively exercise jurisdiction and control over their Ships, the manning of ships, and labour conditions, etc.

Article 94(1) the matters on which the flag State is to exercise its duties is made precise, that is jurisdiction and control over administrative, technical, and social events. This provision, also present under the 1958 High seas convention, was added to strengthen the concept of concerning the nationality of a vessel by indicating matters over which the flag State should exercise its jurisdiction. The United Nations Convention on Conditions for Registration of Ships 1986 amplifies the objective set out.

Article 1 – It prescribes that the flag State is to apply the provisions of that convention to ensure or, as the case may be, strengthening between a State and ships, fly its flag and, to operate effectively. Its jurisdiction and control over such ships concerning identification and accountability of ship owners and operators as well as concerning administrative, technical, economic, and social events.

The reference there to economic matters has no direct counterpart in Article 94, but that has mentioned the comprehensive character of the obligations imposed on flag States generally throughout the UNCLOS, this slight widening of the purpose served by registration and of the duties of the flag State is compatible with the UNCLOS.

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  • ARTICLE 94(2) – REGISTER AND ASSUME JURISDICTION:

Flag states are required to keep a record of ships flying their flag & to allow jurisdiction under its internal laws over each vessel, its masters as well as crew in administrative, technical, and social matters concerning the ship. For this, the requirement is that the register should contain the names of the vessel and in particular, nothing further requirements were mentioned within this provision.

Article 11 of UNCLOS, on the other hand, sets out in considerable detail the information that should be in a record of a vessel.

  • ARTICLE 94(3) – CONSTRUCTION, EQUIPMENT, AND SEAWORTHINESS OF SHIPS

(b) Crew of ships, labour requirements, and the Coaching of crews taking into account the suitable international instruments;

(c) Utilisation of signals, the maintenance of communications, and the prevention of collisions.[6]

  1. Each vessel before registration is surveyed by a qualified surveyor of ships and should have proper navigational equipment as are appropriate for the safe navigation of the ship. International Maritime Organization is a very specialized agency of the United Nations which is liable for actions to promote the safety and security of international shipping and to prevent marine pollution from ships.
  2. Every vessel has a head which is a master and officers who have proper qualifications and various crew members who have proper qualifications for their work as engineers etc. Safety of Life at Sea (SOLAS), 1974 commands a universal responsibility on flag States to ensure, for the safety of life at sea, the appropriate manning of the ship.

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Standard of Training, Certification, and watchkeeping of Seafarers (STCW) 1978, as amended, contains a comprehensive set of international regulations concerning training and certification of personnel. This Convention establishes minimum requirements for training, qualifications, and seagoing service for masters and officers and certain categories of ratings, such as those forming part of a navigational watch or engine-room watch on, Oil Tanker, LPG, etc.

  1. To ensure safety at high seas means of communications are vital for accident prevention and safety. To exercise its jurisdiction the flag states must take necessary measures regarding the use of signals and maintenance of communications and prevention of collision. The Act for the prevention of collisions at sea is found in International Regulations for Preventing Collisions at Sea 1972.

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Rules on signals: Under Safety of Life at sea (1974) all vessels are required to carry radio installations.[7]

  • ARTICLE 94(5) – CONFORMITY WITH INTERNATIONAL REGULATIONS;

Similarly, with regards to article 94(3) and (4), subsection 5 stresses that flag state is required to conform to “generally accepted” international regulations, procedures, and practices and to take any steps which may be necessary to secure their observation. Internationally accepted regulations and practices are dictated by practical necessity. While each state remains free to apply its legal requirements as regards safety, there would be chaos if these requirements widely varied or were incompatible. This provision is questionable to a range because the law and procedures to be adopted are not defined. It also does not give guidance as to what legislation could be classified as “generally accepted”. Thus one could go ahead to understand it to mean rules and standards established through competent international organizations or general diplomatic conferences to bridge the reluctance of states to impose strict safety legislation due to competition in the industry. So, a nation might be compelled to standards it did not specifically adopt. Examples of particular rules, procedures, and standards include Safety of life at sea (SOLAS), The International Convention for the Prevention of Pollution from Ships (MARPOL), etc. Flag states by this article, are under obligation to take any steps necessary to ensure observance of generally accepted international regulations and procedures. Including those related to safety, marine pollution, and the maintenance of radio communication.

  • ARTICLE 94(6) UPON RECEIVING A REPORT FLAG STATE SHALL INVESTIGATE THE MATTER.

In this article, the country has the right to use its power if the flag state has not exercised proper jurisdiction and control concerning a ship flying its flag, to report its facts to flag states. Upon receiving the report the flag state is to investigate the matter and will take remedial steps if necessary. This article calls for good faith on the part of flag states; it also re-emphasises the exclusive jurisdiction of flag states over vessels flying their flag on the high sea.

  • Article 94 (7) Inquiry into every marine casualty or incident of navigation on high seas

Few flag states are consistent in investigating casualties involving ships properly registered under their flag. They also make reports which show that they are working in the field for collecting the reason for which these casualties are happening. The Marine Accident Investigation Branch is very productive and a good example compared to other organizations. This article applies to the incidents which cause casualties like loss of life or very serious injuries to nationals of different states, damages to ships, or the marine environment. In this Flag state and other states who have a dispute will cooperate and conduct such inquiry. SIMO plays a very vital role in uniting other states for smooth conducting of such inquiries and the betterment of their mutual interest.

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INDIAN SCENARIO IN RESPECT TO THE CASE, The Italian Republic v. The Republic of India[8] (Enrica Lexie Incident)

In this case, two Italian mariners working under Vessel Protection Detachment (VPD) posted on Enrica Lexie, an Italian commercial vessel, shot two Indian Fishermen mistaking them to be pirates in contiguous waters (20.5 nautical miles off the coast of Kerala). Thereafter, the Indian navy and coastguards detained the two Italian marines.

The Permanent Court of Arbitration (hereinafter referred to as PCA) held that Italy was guilty of violating India’s freedom and right of navigation under the United Nations Convention for the Law of the Sea (UNCLOS) Article 87 (1) (a) and 90. India and Italy had concurrent jurisdiction over the incident and a valid legal basis to institute criminal proceedings against the mariners; however, their immunity as state officials acts as an exception to the jurisdiction. The mariners will now be tried in Italy and given a sentence according to their domestic laws.

COMMENTS:

While delivering the judgment, the PCA did not acknowledge the presence of natural rights of a person which cannot be violated in furtherance of official duty. Furthermore, the case has established a dangerous precedent where it will be difficult for India to protect its innocent unarmed citizens from such acts done without provocation in the future.

[1] Dr. Ashok k. Jain, PUBLIC INTERNATIONAL LAW & HUMAN RIGHTS [LAW OF PEACE], (Third Edition 2010).

 

[2] S.S. Lotus Case (1927) PCIJ, Series A No. 10.

[3] SUPRA NOTE 1.

[4] Dr. ASHOK K. JAIN, PUBLIC INTERNATIONAL LAW & HUMAN RIGHTS [LAW OF PEACE], Third Edition 2010.

[5] 81 Ll L Rep 277.

[6] Mafia.org. (2020). Article 94. Duties of the flag State. [online] Available at: https://maifa.org/resolution/resolutions/UNCLOS%2094.htm [Accessed 15 Dec. 2020].

 

[7] Nordquist, Volume III, United Nations Convention on the Law of the Sea, a Commentary at 149.

[8] (2013) 4 SCC 721.

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Analysis of Banking and Investment Laws in USA, UK and UAE

By: Manas Maheshwari 

Introduction

Banks are the most important element of the Financial System of any country. The Economic Development Indicator depends on the efficacy and efficiency of the banking system prevailing in that particular country. The core function of Bank is to accept deposits and lend money thereby acting as an intermediary between depositors and borrowers. The income of  Bank is difference between rate of interest charged to the borrowers and the rate of interest paid to the depositors. This is the traditional function of Banks. In modern times like now, Banks including Non-Banking Financial Companies (NBFCs) perform various other value added services to its customers like foreign exchange transactions, providing distinct types of loans other than business loans such as car loans, home loans, education loans etc. , advisory and consultancy services, hire purchase financing, insurance services and many more. The Banking is not limited to the Commercial Banking operations alone. It has widened its limits and has reached the stage where the Investment Bank’s role in the economic development has come into play. The Investment Bank performs dual functions like acting as an underwriter, book manager to the issue, merchant banker, registrar in primary securities market from side of the corporate issuer. The Investment Bank also advises the clients mainly, Institutional Investors about the Buy and Sell side functions. The role of Foreign Direct Investment (FDI) also comes into play when the commercial operations has been globalized and particularly when the capital is not at abundance.

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Analysis of Banking and Investment Laws in UAE

As per the Doing Business Report 2020[1] published by the World Bank, the United Arab Emirates is ranked 16th out of 190 countries. This shows that UAE is gradually becoming  business and financial centric attracting a host of global banks corporate to set up their operations.

Currently, there are three types of Banks operating within UAE. These are:

  1. Commercial Banks;
  2. Islamic Banks and
  3. Foreign Banks.

The Islamic Banks are regulated by the Shariah principles as opposed to the commercial banks leading to many operational differences between the two. The popular banks currently operating in UAE are Emirates NBD, National Bank of Abu Dhabi, Abu Dhabi Commercial Bank, First Gulf Bank and Dubai Islamic Bank.

The UAE Central Bank is the primary regulator for Banking and Financial Services in UAE. Apart from Central Bank, there are various other regulatory bodies namely:

  1. The Insurance Authority (“IA”);
  2. The Securities and Commodities Authority (“SCA”);
  3. Dubai Financial Services Authority (“DFSA”) and
  4. Abu Dhabi Global Market (“ADGM”).

The Regulatory authorities functioning within the federal level are the Central Bank, IA and SCA and those functioning within the emirate level are DFSA (operates within the Dubai International Financial Centre) and ADGM (operating within Abu Dhabi).

The Federal Law No. 10 of 1980[2] governs the Central Bank, the Monetary System and Organization of Banking. The Islamic Banks, Financial Institutions and Investment Companies are governed by Federal Law No. 6 of 1985[3]. The Decretal Federal Law No. 14 of 2018[4] covers the subject of Central Banks and Organization of Financial Institution and their activities. The SCA is governed by Federal Law No. 4 of 2000[5] and issues regulations from time to time which the companies operating in the securities market has to comply with. The IA regulates the Insurance sector in UAE in accordance with Federal Law No. 6 of 2007[6].

The DIFC, being an international Financial hub offers very vibrant environment w.r.t Commercial Banking and Investment Banking services. The laws related to this area of business are:

  1. Companies Law[7];
  2. Electronic Transactions Law[8];
  3. Insolvency Law[9] and
  4. Law of Security[10].

The Financial Collateral Regulations[11], Insolvency Insurers Regulations[12], Security Regulations[13] and Investment Companies Regulations[14] has been amended from time to time by DIFC.

The Central Bank of UAE issues licenses to foreign banks for operating in UAE as per the law that governs the domestic bank licensing. The Investment Banks cannot accept deposits whose maturity period is less than two years with some exceptions and these banks are licensed as per the relevant law[15]. The Islamic Banks can carry all types of Banking, Financial and Investment services and operations as per the relevant federal law.

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Only authorized Institutions and Companies incorporated as per the Commercial Companies Law are licensed to act as moneychangers[16]. In respect of Financial Intermediaries involved in sale and purchase of stocks and bonds and in money market transactions, only UAE citizen in respect of natural person can act as an intermediary[17]. The responsibility for licensing brokers and intermediaries fall upon SCA in respect of shares and Central Bank in case of currency and commodities.

The Investment Companies as per the resolution[18] adopted by Board of Directors of Central Bank is involved in following businesses:

  1. Managing Portfolios;
  2. Preparing Allotment;
  3. Managing Investment Trust funds and
  4. Acting as a Trustee for managing funds on behalf of Beneficiary.

The Finance Companies undertake the following activities according to the resolution[19] adopted:

  1. Loans and Advances;
  2. Issuing credit guarantee and
  3. Issue of securities such as stocks, bonds, debt etc.

The Laws and Regulations governing Foreign Exchange are:

  1. Anti-Money laundering legislation[20] by Central Bank (To Register Hawala Providers);
  2. Anti-Money Laundering/Anti-Terrorist Financing Regulations[21] by DIFC and
  3. Anti-Money Laundering and Combating the Financing of Terrorism[22] by DMCC.

In the midst of Covid-19 pandemic, the Central Bank of UAE have taken various measures relating to rescheduling loan payments, reducing charges for customers, deferring loan installments, encouraging customers to adopt digital banking services, to boost lending capacity of banks and to provide temporary relief to private sector and retail customers affected by Covid-19 pandemic and directed all banks to carry out sanitization of ATMs on regular basis[23].

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Analysis of Banking and Investment Laws of UK

As per the Doing Business Report 2020[24] published by World Bank, United Kingdom is ranked 8th out of 190 countries. This establishes the fact that UK Laws and Regulations are business friendly.

Most of the UK laws partakes its character from European laws and regulations. The Primary framework for regulating Banking, Financial Services and Insurance sector in UK is Financial Services and Markets Act 2000[25] (“FSMA”). Apart from this, there are various domestic rules and regulations derived from secondary sources.

The principal regulators for Banks are:

  1. Bank of England (“BOE”);
  2. Prudential Regulation Authority (“PRA”), a division of BOE and
  3. Financial Conduct Authority (“FCA”).

The BOE performs a statutory duty exercising its powers in the matter of resolution of Banks if a Bank is declared insolvent. The Financial Policy Committee (“FPC”) of BOE performs macro-supervision over Banking and Financial Sector. The Payments System is regulated by a Payment Systems Regulator and the issuance of Electronic Money is regulated by FCA.

The Primary function of PRA is to supervise the Banking and Insurance Companies[26]. The PRA also ensures proper mechanism of infrastructure in place for performing Banking related functions. It develops strategies in cooperation with the Companies to counter the crisis like situations. The PRA helps in ensuring a sound financial system is in place.

Till 2013, the Financial Services Authority (“FSA”) was the principal regulator for Banking and Financial Services industry. After 2013, the responsibility was divided between PRA and FCA.

The PRA and FCA are different entities working together and having a common aim. The FCA is responsible for ensuring fairness in the Financial Markets. It helps in ensuring a fair outcome for the consumers. The primary objectives[27] of FCA are:

  1. To protect the consumers;
  2. To protect the Financial Markets;
  3. To promote competition and
  4. To work in coordination with consumer groups, trade associations, professional bodies and other stakeholders.

The FCA is an independent public body and the main source of its income is the fees which it charges from its customers. The FCA is accountable to the Parliament and Treasury.

The activities that are regulated under the Banking and Financial sector are incorporated in the Financial and Markets Act (Regulated Activities) Order 2001[28] (“RAO”). Regulated Activities covers the following aspects:

  1. Accepting Deposits;
  2. Securities and Derivatives Business;
  3. Transactions in Investments;
  4. Insurance Activities;
  5. Mortgage Contracts and
  6. Consumer Credit.

In the wake of the global financial crisis in 2008, the UK economy went into a sharp recession. This was the time when the concept of Bank Ring-Fencing was developed. Under this concept, the retail banking services of the Bank were separated from the other services that the Bank offered and were prioritized. The Bank Ring Fencing helps in protecting the consumer banking services from the unexpected events which leads to global financial crisis like situations.

The Financial Services Compensation Scheme (“FSCS”) is a deposit insurance scheme which protects the consumers of the firms in financial sector that have failed.

The Consumer credit in UK is mainly regulated by Consumer Credit Act, 1974[29]. The Act regulates the following aspects:

  1. Credit card purchases;
  2. Credit agreements and
  3. Credit advertising.

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The Banking Resolution aspect is incorporated in the Banking Act 2009[30]. The Bank of England is the UK’s Banking Resolution Authority. The Resolution regime is governed by the Bank of England’s approach to Resolution. This Resolution regime does not apply to the credit unions. The depositors of credit unions are paid out by FSCS up to a maximum limit of 85,000 pounds per credit union[31].

Due to Covid-19 pandemic, the FCA has also reviewed the disaster recovery plans in order to ensure that all the regulations have been complied with[32]. The UK’s exit from the European Union will also have a substantial impact on the Banking and Financial Sector.

Analysis of Banking and Investment Laws in USA

USA has a dual banking system put in place. Both the Federal Banks and State-Chartered Banks are operating in USA. The following categories of Banks are operating in USA:

  1. National Banks;
  2. State-Member Banks;
  3. State non-member Banks;
  4. Foreign Banks;
  5. Private banks;
  6. Industrial Banks and
  7. Trust Companies.

The Banks are required to obtain a charter before accepting deposits and continuing business[33].

The Primary Regulatory Authority for keeping a regulatory oversight over the Banking operation in US is the Federal Reserve System (“Fed”). The Federal Reserve System, being the Central Bank of USA is the primary supervisory authority over Bank Holding Companies, Financial Holding Companies, State Chartered Banks, Savings and Loan Holding Companies. The Federal Reserve is equipped with the following powers:

  1. Remove officers of Banking Companies;
  2. Imposing penalty and fines;
  3. Revoking Bank membership and
  4. Terminating activities of Banks.

The main functions[34] performed by Fed are:

  1. Formulate monetary policy;
  2. Stabilizing the financial system;
  3. Administering the payment and settlement system and
  4. Promoting the consumer awareness and community development.

Besides the Federal Reserve, other regulatory bodies operating in USA are:

The Office of the Comptroller of the Currency (“OCC”): The OCC[35] is the primary supervisory authority having oversight over National Banks, Saving Banks and Foreign Banks having branches at federal level. The OCC is an independent unit of the Department of Treasury. It helps in ensuring that the Banks are accountable to customers and comply with the relevant laws and regulations.

The Federal Deposit Insurance Corporation[36] (“FDIC”): It is an independent agency created to instill the confidence among the general public in the financial system. It insures deposits and supervises the state-chartered Banks. The responsibility of FDIC also lies in administering the deposit insurance fund and managing receiverships.

State Banking Agencies: The State Banking Agencies are responsible for supervising the banks operating at state level. The functions of this agency varies from state to state. Some common functions performed by these agencies are:

  1. Issuing Bank charters;
  2. Conducting examinations at Bank and
  3. Enforcing regulations and levying fines.

Some other important regulators[37] for Banking and Financial oversight are:

  1. Financial Crimes Enforcement Network;
  2. Federal Trade Commission and
  3. Consumer Financial Protection Bureau.

The Securities and Exchange Commission (“SEC”) is the primary regulator of Securities Market in USA. The primary objective of SEC is to protect the investors, develop efficiency in the securities market and to address investor grievances.

The derivative market in USA is regulated by Commodity Futures Trading Corporation (“CFTC”). The National Association of Insurance Commissioners (“NAIC”) is a regulatory organization governed by chief insurance regulators of the respective states. The Insurance Laws are enacted by the respective state legislature under which insurance regulators operate. The legislations related to Banking in USA are:

National Bank Act of 1864[38]: This act performs the functions relating to establishing national banks, creating uniform national currency and establishing OCC.

Federal Reserve Act of 1913[39]: This act established the Federal Reserve System as the Central Bank of USA. The act sets out the framework for the operation of Fed and ensuring stable monetary and financial system.

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Federal Credit Union Act[40]: This act establishes the National Credit Union Administration for governing the credit unions.

Federal Deposit Insurance Act[41]: This act establishes the Federal Deposit Insurance Corporation which will insure the deposits of all banks and saving associations. The FDIC is the primary regulator for state non-member banks.

Bank Holding Company Act of 1956[42]: This act gives enhanced powers to Federal Reserve by regulating the Bank Holding Companies.

International Banking Act of 1978[43]: This act brings foreign banks at par with the domestic Banks w.r.t regulations, capital requirements etc.

The Gramm-Leach-Bliley Act[44] was adopted in 1999 for providing affiliation of Banks, securities firms and for safeguarding the personal sensitive data of the customers.

The Dodd-Frank act[45] of 2010 is a comprehensive set of regulations governing financial services borne out of great recession of 2008. The Act performs following functions[46]:

  1. Protecting consumers against any abusive lending and mortgages by Banks;
  2. Overseeing non-banking hedge funds;
  3. Establishing financial stability oversight council;
  4. Orderly shutdown of Banks if it becomes insolvent and
  5. Creating Volcker’s Rule which prohibits banks from owning hedge funds for their own purpose.

Besides these important acts some other important acts such as Bank Secrecy Act[47], Patriot Act[48] etc.

According to Doing Business Report 2020[49] published by World Bank Group, the United States of America is ranked 6th out of 190 countries. The Banking and Investment related laws in USA are quite business friendly and amended from time to time in response to the latest developments.

 

[1] The World Bank, Ease of Doing Business Rankings, Link.

[2] Union Law No. (10) of 1980.

[3] Federal Law No. (6) of 1985.

[4] Decretal Federal Law No. (14) of 2018.

[5] Federal Law No. (4) of 2000.

[6] Federal Law No. (6) of 2007.

[7] DIFC Law No. 5 of 2018.

[8] DIFC Law No. 2 of 2017.

[9] DIFC Law No. 1 of 2019.

[10] DIFC Law No. 8 of 2005.

[11] DIFC Financial Collateral Regulations, November 01, 2019.

[12] DIFC Insolvency (Insurers) Regulations, September 29, 2008.

[13] DIFC Securities Regulations, November 01, 2019.

[14] DIFC Investment Companies Regulations, November 12, 2018.

[15] UAE Central Bank, Banking, Link.

[16] UAE Central Bank, Banking, Link.

[17] UAE Central Bank, Banking, Link.

[18] Resolution No. 164/8/94 dated 18 April 1995.

[19] Resolution No. 58/3/96 dated 14 April 1996 and Resolution No. 165/06/2004 dated 6 December 2004.

[20] Central Bank of UAE, Anti-Money laundering legislation,  Link.

[21] DIFC Non-Financial Anti Money Laundering/Anti-Terrorist Financing (AML/CFT) Regulations, Link.

[22] DMCC Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Policy and Process, Link.

[23] Mazen Boustany and Samar Safar Aly, Guidance for Financial Services Industry in the UAE, April 01, 2020, Link.

[24] The World Bank, Ease of Doing Business Rankings, Link.

[25] 2000 c 8.

[26] Bank of England, What is the Prudential Regulation Authority?, Link.

[27] Financial Conduct Authority, About the FCA, Link.

[28] 2001 No. 544.

[29] 1974 c 39.

[30] 2009 c 1.

[31] Financial Services Compensation Scheme, About us, Link.

[32] Mazen Boustany and Samar Safar Aly, Guidance for Financial Services Industry in the UAE, April 01, 2020, Link.

[33] Baker McKenzie, Global Financial Services Regulatory Guide, Link.

[34] Federal Reserve System, About the Fed, Link.

[35] Office of Comptroller of Currency, Who We Are, Link.

[36] Federal Deposit Insurance Scheme, About Us, Link.

[37] Baker McKenzie, Global Financial Services Regulatory Guide, Link

[38] 12 U.S. Code § 38.

[39] Pub. L. 63-43.

[40] 12 USC § 1751 et al.

[41] Pub. L. 81-797.

[42] 70 Stat. 133.

[43] 92 Stat. 607.

[44] 113 Stat. 1338.

[45] 124 Stat. 1376-2223.

[46] Mark Koba, Dodd-Frank Act: CNBC Explains, Link.

[47] 84 Stat. 1114-2.

[48] 115 Stat. 272.

[49] The World Bank, Ease of Doing Business Rankings, Link.

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E- Sports Player Contracts and the Clauses Covered Under It

By: Manohar Samal

  1. Introduction 

Electronic sports (e- sports) involves playing computer or other games for profit where fans view the gaming and place wagers depending upon the skills of the players indulged in such games.[1] Not only wagers but, e- sports generate revenues through live streaming of players as well.[2] Reportedly, 380 million people worldwide were indulged in watching some or other form of e- sports making it a billion dollar industry.[3] The growth and evolution of e- sports into a money- making industry has resulted in exploration of new possibilities in the legal field such as its operation with legal endorsements, intellectual property and contracts.[4]

Contract law plays an extremely central role in e- sports and contracts for teams, players, tournament leaders and leagues should be well- drafted in place. This is mainly because during the initial years of e- sports turning into a profitable industry, exploitation and late payment of consideration were common occurrences.[5] One of the most vital contracts in e- sports is the endorsement contract as many players have faced difficulties in such forms of contracts in the past.[6]

Albeit the fact that the e- sports sector has colossally grown within the past decade worldwide and in India, the regulatory system seems to be lackadaisical in this field.[7] India does not have any law on regulating e- sports and only a Private Member Bill titled Sports (Online Gaming and Prevention of Fraud) Bill has been introduced before the Lok Sabha till date.[8]

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  1. E- Sports Player Contracts and the Clauses Covered Under It 

Traditional sports have well- regulated systems with contractual stability.[9] However, the same thing cannot be said about e- sports. Since there is no principal legislation or effective regulation, contract based relationships govern the entire e- sports industry.[10] Therefore, it would not be wrong to infer that contract law plays a pivotal and colossal role in the e- sports industry. Due to the various difficulties faced by players in the past, it is important that certain contract clauses work in their favor and towards the interest of the e- sports game at large. This would naturally mean that e- sports player contracts will have to contain some indispensable content and clauses and these clauses have been enlisted below:[11]

  1. Definitions Clause- The definitions clause is an indispensable clause in any contract. This would also include e- sports player contracts since a definition clause helps in explaining the exact meaning of the terminology or nomenclature used in the contract which can result in reduced risk of future litigation in interpretation related matters as all ambiguities are eliminated after looking at the definitions clause.
  2. Player Services Clause- All the services which are going to be provided by the player have to be clearly specified in the e- sports player contract. This would include all services provided by the player in addition to participating and playing in competitions, leagues or tournaments such as social media promotion and creation and promotion of video content (vlogging). This clause would also have to cover the hours of engagement which is agreed upon by the player and the respective contractor.
  3. Player Obligations Clause- E- sports player contract needs to contain an exhaustive list of obligations which the player is expected to carry out. This would include details in respect of tournaments which the player will participate in, the teams which will accompany and instruct the player, the amount of promotion required to be done by the player in sponsor events, the apparel and accessories to be worn by the player and the hours of training in which the player is expected to indulge. The player obligations clause is pivotal because it results in clear indication of the players obligations preventing any form of exploitation.
  4. Player Restrictions Clause- The player restrictions clause is responsible for explicating the restrictions and limitations which the player has to adhere to. This clause includes factors and concomitants such as restriction from playing in tournaments without the team or the contractor’s permission, restriction to promote competitors’ or their sponsors and for specifying a code of conduct for players to observe during the tenure of the contract.
  5. Non- Disparagement Clause- A non- disparagement clause offers protection to teams and sponsors from defamatory remarks made by a player and is an indispensable part of an e- sports player contract.
  6. Remuneration and Allowances Clause- Details of the remuneration paid or going to be paid to the player has to be specified under this clause. Moreover, all benefits, allowances and bonuses arising in the course of the contract will also have to be specified under this clause.

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  1. Image Rights Clause- This clause covers a unique aspect known as image rights. An image right is the right associated with the player due to his or her skills which a team or the contractor can use during the course of contract.[12] Such image rights include name, appearance, voice, in- game avatar or gamer tag. This clause is paramount since it could lead to the player being additionally compensated or paid for allowing exploitation and utilisation of his or her image rights.
  2. Equipment Clause- The equipment going to be supplied, types and forms, restrictions and permissions to use and similar connected matters have to be covered under the equipment clause. This is mainly because the equipment has a great role to play in the player’s success while participating in a tournament or league or competition.
  3. Revenue Sharing Clause- The revenue sharing clauses contains facts about the amount of extra revenue which will be shared with the players from the sale of merchandise, sale of in- game items, revenue generated out of streaming and prize money earned. Since revenue sharing from additional sources has been a controversy leading to litigation and conflict amongst the team and the players, it is vital that this clause is drafted properly where clear specifications about percentage of revenue sharing is stipulated.
  4. Roster Management Clause- Roster management clause is a key clause in an e- sports player contract. This is mainly because roster management strategy of the team can directly affect a player’s career. Roster management is a process which involves strategising the use of player resources by the team.[13] Therefore, it would contain information such as players going to initiate playing during the tournament, league or competition and the number of substitute players. The time duration after which each substitute will be allowed to play is also covered under the roster management clause of an e- sports player contract.

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  1. Termination and Renewal Clause– The termination and renewal clause is an indispensable clause in an e- sports player contract. This clause contains aspects of compensation in case pre- termination of contract takes place and quantification of value of the remaining contract period of a player in proportion to the investments made by the contractor in such player. Post- termination obligations and duties are also covered under this clause such as deletion of data, return of equipment and non- disparagement. Non- compete and non- acceptance of any other team or contractor’s offer is also covered under this clause. Renewal related aspects are also covered under this clause. This is an important clause to keep the player’s conduct in check and also helps the player in understanding his or her restrictions. Such clauses are also known as buyout clauses.[14]
  2. Loans Clause- Unlike the common meaning assigned to the term “loan”, in an e- sports contract, loans are not even remotely related to bank loans and instead refer to loaning of members to other teams. It may arise that teams may enter into arrangements for exchange and loaning of players. This is why it is important that the loans clause is drafted properly so that any form of legal dispute between teams does not arise. The loans clause contains information such as the duration of loans, functions to be performed by the loaned player, restrictions and permissions to the loanee team and other assignment details.
  3. Governing Law and Disputes Resolution Clause- The governing law and disputes resolution clause affirms the jurisdiction whose law will govern the contract[15] and the court, tribunal or forum which will be preferred in case any sort of dispute arises between the team, sponsors or players. The location of such preferred court, tribunal or forum is also specified under the governing law and disputes resolution clause.
  1. Confidentiality Clause- The confidentiality clause is a pivotal clause in any contract. Similarly, confidentiality clauses have significance in e- sports player contracts as well. This is because aspects such as team plans, resources and strategy are delicate information which could lead to the success or loss of teams in e- sports. Therefore, it is important to protect it through a confidentiality or non- disclosure clause. The scope of confidentiality, permissible disclosure and related aspects are covered under the confidentiality clause of an e- sports player contract.

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  1. Conclusion

 Hence, the above discussions pristinely explicate the role of an e- sports player contract in the smooth conduct and success of e- sports games along with showcasing the clauses which are covered under such forms of contract.

[1] USC Gould School of Law. “eSPorts Law Growth”. USC Gould Online Blog. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://onlinellm.usc.edu/blog/esports-law-growth/>.

[2] Willingham, AJ. “What is eSports? A Look at an Expensive Billion Dollar Industry”. CNN Edition. (27 August 2018). [online]. [last accessed on 15 August 2020]. Available from: <https://edition.cnn.com/2018/08/27/us/esports-what-is-video-game-professional-league-madden-trnd/index.html>.

[3] Ibid.

[4] Ibid 1.

[5] Ibid 1.

[6] Ibid 1.

[7] Verma, Bhumesh and Srivastava Stuti. “Regulating E- Sports- An Opportunity and a Challenge”. RGNUL Student Research Review. (05 July 2019). [online]. [last accessed on 15 August 2020]. Available from: <http://rsrr.in/2019/07/05/regulating-e-sports-an-opportunity-and-a-challenge/>.

[8] Ibid.

[9] Rastogi, Anirudh and Ranjit, Vishakh. “E- Sports Player Contracts: Common Clauses and Potential Legal Issues in India”. Mondaq. (18 June 2020). [online]. [last accessed on 15 August 2020]. Available from: <https://www.mondaq.com/india/gaming/955392/e-sports-player-contracts-common-clauses-and-potential-legal-issues-in-india>.

[10] Ibid.

[11] Ibid.

[12] Vrey, Rogier and Wilms, Tim. “eSports and Image Rights”. CMS Law. (17 August 2017). [online]. [last accessed on 15 August 2020]. Available from: <https://cms.law/en/nld/publication/esports-and-image-rights>.

[13] Roundhill Investments. “E- Sports Glossary”. Roundhill Investments. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://www.roundhillinvestments.com/esports-glossary>.

[14] Lewin, Pete. “Why Every Esports PLayer Needs a Contract”. The ESports Observer. (21 November 2016). [online] [last accessed on 15 August 2020]. Available from: <https://esportsobserver.com/every-esports-player-needs-contract/>.  

[15] Contractbook. “Electronic Sports (eSports) Player Contract (EU)”. Contractbook. (2020). [online]. [last accessed on 15 August 2020]. Available from: <https://contractbook.com/templates/electronic-sports-esports-player-information-eu>.

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Laws relating to Private Equity in the Construction Industry

By: Ananyaa Jha

Introduction

The capital investment in a business plays a major role in determining its long-term sustainability and success and there are various sources available, one of which is private equity, which has gained momentum since the past two decades in India, especially owning to the boom of the IT sector. At present the private equity (PE) firms are showing tremendous growth, the funds are distributed evenly across different sectors to mitigate the risk-factor. PE is a capital form of investment in a company that is not listed or traded publicly.

The paper discusses the law governing private equity in India along with how does a PE investment work. It also throws light upon the increasing demand for last-mile funding in construction industry and how private equity can come to the rescue.

Private Equity & its’ Importance?

The term private equity refers to capital investment in an entity that isn’t publicly traded. It’s an interest or ownership in a company that isn’t publicly listed. Private Equity investment can be made in a public company with the objective of making them private and delisting them from the stock exchange platform. Private Equity investors gain equity in return for the capital they invest in the company. Private Equity investors are generally institutional investors (such as banks, hedge funds, pension funds etc.) or individuals having a high net worth, or private equity firms comprising of accredited investors.[1]

Private Equity is different than venture capital as the latter is a funding provided to start-ups or entities which are in the nascent stages which showcase a lucrative growth in the long run, whereas private equity is more commonly invested in mature businesses that have already been established but are unable to generate profits due to poor performance & lack of efficiency, and are in-turn failing.  Private Equities play an active role in the functioning of an entity in order to improve the performance and help steer the company in the direction of increased revenues so that upon selling the investment and exiting from the entity, a generous amount of profit can be earned.[2]

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PE is a crucial form of investment as along with providing the required liquidity in a project, it stimulates entrepreneurship & increases shareholders value, in turn promoting job creation and fuelling economic growth. PE leans towards the riskier side of an investment scale as there is high likelihood of a company failing to perform. It involves a high level of long-term risk in order to yield high returns. Various strategies of PE investment include but is not limited to- growth equity funds, leveraged buyouts, venture capital investments, certain real estate investment amongst others.

Construction Industry & Private Equity

Construction industry and private equity have joined hands for the past many years, coming together to fund significant development projects worldwide. In the absence of PE firms, a lot of real estate development projects wouldn’t see the light of day or wouldn’t have reached the finish line. In this industry, the PE firms make available the required funds to help a project start and finish. These firms have a major role to play in the development of real estate.

Development of the real estate in any country is a costly affair, sometimes requiring the support of foreign investors too. The entire project can cost upwards of 10 to 100 crores. In majority, the development firms fall short of the necessary amount to fund the project in its entirety. This is where PE firms come into the picture. Usually, a banking institution will cover a hefty amount of the costs yet it leaves approximately 20-35% to be funded by the developers, which could still be a large amount, unable to be funded by the developers on their own, they may require additional help funding their project, bringing in private equity.[3]

If a PE firm chooses to invest in a real estate development project, they will have a major role to play in the process of decision-making. Basically, the PE firm/investor are regarded as either a majority or a part-owner of the property in which they are investing, owing to the large scale of investment in the project, they get entitled to a considerable scale of ownership of said project, which entitles them to have substantial influence in all the decisions to be made. They will provide their input throughout the construction process. The construction firm, in all becomes indebted to the PE firm.

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The year 2020 has witnessed a drop in PE investments because of the novel coronavirus disease’s outbreak (COVID-19 pandemic). The chance of specific sectors like healthcare, technology, e-commerce among a few others currently bringing about investment opportunities exists[4].

The real estate industry has taken a major hit due to the ongoing COVID-19 pandemic and the end of first quarter (March) has shown the sector to reach an all-time low. Commercial as well as residential sectors have been hit severely.[5] The already ailing residential sector in terms of poor demand is witnessing a hard time to launch any new projects or to even finish the ongoing projects due to shortage of labour and continuous construction stoppage.[6]

The slowdown in the sector will remain even post COVID-19 crisis and as lockdowns relaxation continues nationwide, since the construction sector is faced with a critical working capital crisis which holds utmost importance to restart the business & sustain it successfully. Many have their hopes pinned on intervention by the government to help recover the loss created by the pandemic. However, private equity can prove to be of aid in this current scenario.

The regulatory framework revolving around PE funds in India

In India, commonly the PE funds are established as trusts & in accordance with SEBI (Alternative Investment Funds) Regulations, 2012, are registered as an alternative investment fund (AIF). Although, only a company, trust and limited liability partnership are available to be used as the legal vehicle for the PE funds. Companies Act, 2013 provides for PE funds to be established as companies but this method is not used much due to the lax compliance required in comparison to trust structures and in addition, the unclear precedents for fund-raising. According to the Limited Liability Partnership (LLP) Act, 2008, the alternative investment funds can be instituted as LLPs, however, the LLPs use for PE funds is quite rare.[7] The regulatory framework:

  1. SEBI (AIF) Regulations, 2012

SEBI via notification dated May 21, 2012, repealed & replaced 1996 Venture Capital Funds Regulations of SEBI with the Alternative Investment Funds Regulations of 2012, The AIF Regulations were intended to provide for unregulated funds & extends its principles in this regard along with increasing stability and accountability of the market. There are 3 categories along which these AIFs are spread. Category II categorizes such AIFs which don’t come under the ambit of Category I & III. According to regulations, PE funds get registered as Category II. The purpose of preparing these regulations was to create a standard structure in order to govern private set of funds & investment vehicles to improve the channelizing of the funds.

SEBI has recently issued a circular that introduces various notable changes to the legal framework that currently exists. To strengthen the disclosures required, SEBI directed compulsory Performance Benchmarking along with standardizing PPM, that’s the prime document for disclosing all the relevant information to the potential investors, & Annual Audits for the alternative investment funds. On 1st March, 2020, all these changes have been enforced.

  1. The Companies Act, 2013

The Companies Act, 2013 brought with it a required overhaul for companies’ governance in India. The Act of 2013 brought major changes by placing regulatory responsibility, accountability & heavy compliance policies on private companies. Private companies take the ‘private placement’ route to raise capital as they aren’t permitted to offer securities to the general public & raise capital, so they have to take a different approach, wherein the securities are issued to only a selected no. of private individuals. Section 42 of the Act governs the ‘private placement’ process and all such private companies have to comply with the provisions contained in the section. The Section plainly states an invitation or an offer can’t be made to over 200[8] individuals, excluding the securities that are offered under ESOP[9] & the Qualified Institutional Buyers, but such immense rules in respect of PE funds are inapt because regulating the investments that are done through PE funds do not necessitate large compliances because the securities aren’t offered to the public. [10]

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The working of PE Investment

Elucidated below is a guideline which the investors/firms need to follow when they invest in private equity of an entity:

  • Raising Capital & Share-Purchase: The Private Equity investment process starts with chalking out an acquisition plan, & ways in which capital for it could be raised, that encompasses decisions based on different kinds of financing used for raising capital, etc, along with conducting due diligence. As soon as the acquisition deal closes, the management duties of the firm that’s been acquired becomes the responsibility of PE investors.
  • The Acquired Company’s Restructuring: The subsequent move is restructuring of the firm required to increase its productivity by managing the company through improving operations & reducing costs. It covers a wide range of crucial decisions about the operations, the expansion, the profitability, the strategy to be adopted, along with the company’s growth model. The involvement level will be directly proportional to the size of their investment.[11]
  • Selling/Exiting the Company: Generally, the end mission of PE firms is putting the company on sale/exiting at a sizeable profit, which usually takes place after around 3 to 7 successful years after initial investment, although the number of years may vary depending on specific strategic circumstances. After the acquired company begins profiting, & continues to show consistent growth, it is the right time to sell it as there exists high probability of the promoters gaining enormous profits from the sale of the entity. The PE investors get their share of the profits and enjoy a good return.

The demand for last-mile funding in Construction Industry

PE firms have been on the look out to take advantage out of the increasing need of last-mile funding by the construction/real-estate developers because of the on-going stagnation in the residential sector which has worsened due to the liquidity crisis that is existent in the country. Many of the PE investors are keeping an eye for offering capital out of existing funds for construction projects which are in the final or late stage & also establishing platforms in order to finance such real estate projects. [12]

After Real Estate (Regulations & Development) Act (RERA) was implemented in 2017, the developers since then have focused on completing the construction projects & so the demand for funding capital in the late-stages has soared. The banks unwillingness to refinance loan in addition to the liquidity crisis in the financial market has elevated the demand for PE funds because a substantial number of late-stage projects are unable to finish due to lack of capital.

Given the scenario, influx of last-mile capital funding coming in to complete projects is very positively transformative for all the concerned stakeholders. The benefit of last-mile funding is that comparatively it’s a less risky approach as these projects have the necessary approvals, the construction has begun & to some extent have started bringing about sales, so all of this helps to mitigate the risk involved, which provides better chances of reward & hence, investors interests piques.

The PE firms’ interest in the real estate sector is growing at the same time when the government is taking initiative to revive the sector. The government in 2019 announced the establishment of a Rs 25,000 crore AIF in respect of last-mile funding to get the stalled residential projects back on track, because sales have been on the declining scale since 2014, except a marginal rise in the year 2016, but the demonetisation decision by the government & goods and services tax (GST) implementation worsened the situation in 2017 & since the recovery in the sector is moving very slowly.

Conclusion

Private Equity and the construction sector haven’t always connected as the PE investors have by & large steered clear of the construction industry owing to a great deal of inherent risks, like the business having a cyclic nature, professional management, succession planning along with the unrealised expectations in respect of financial requirements of the construction business, i.e., bonding, & the owners of construction companies have been apprehensive of outside investors. However, that perception is changing as PE investors will bring not just financial aid but act as a strategic partner, unlike the other sources of capital & work with the business & make a sustainable model by keeping a long-term vision, thereby maximizing value. The PE firms will bring in deep understanding of the construction industry & help the companies grow by investing not just capital but an array of other valuable requirements for the company to grow.[13]

[1] https://www.investopedia.com/articles/financial-careers/09/private-equity.asp, (Last Visited at 9:00 AM on 6th November, 2020).

[2] https://www.investopedia.com/ask/answers/020415/what-difference-between-private-equity-and-venture-capital.asp#:~:text=Private%20equity%20is%20capital%20invested,potential%20for%20long%2Dterm%20growth., (Last Visited at 10:00 AM on 6th November, 2020).

[3] https://workwithfocus.com/news/private-equitys-role-in-real-estate-development-construction/, Last Visited at 5 PM on 6th November, 2020.

[4] Rukmini Rao, “Coronavirus: E-commerce, SaaS and healthcare to attract more PE funding, says report”, Business Today, May 14, 2020, available at https://www.businesstoday.in/current/corporate/coronavirus-e-commerce-saas-and-healthcare-to-attract-more-pe-funding-says-report/story/403823.html (last visited at 2 PM on 6th November, 2002).

[5] Knight Frank India Survey.

[6] Kailash Babar, “Covid-19 impact: Real estate sentiments hit lowest level”, The Economic Times, April 16, 2020, available at https://economictimes.indiatimes.com/wealth/real-estate/covid-19-impact-real-estate-sentiments-hit-lowest-level/articleshow/75175857.cms?from=mdr (last visited at 7 PM on 6th November, 2020).

[7] Pratish Kumar, Sumitava Basu and Divya Dhage, “Private Equity in India: market and regulatory overview”, available at https://uk.practicallaw.thomsonreuters.com/8-504-2425?transitionType=Default&contextData=(sc.Default)&firstPage=true, (last visited at 11:00 AM on 6th November, 2020).

[8]  Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014.

[9] Employee Stock Option Plan

[10] B&B Associates, “Private Equity in India: Evolution and Legal Overview”, July 31, 2020, available at: https://bnblegal.com/article/private-equity-in-india-evolution-and-legal-overview/, (last visited at 9:00 PM on 8th November, 2020).

[11] https://corporatefinanceinstitute.com/resources/careers/companies/equity-firm/, last visited at 11:00 AM on 8th November, 2020.

[12] Bidya Sapam, “Private equity firms sense big opportunity in last-mile real estate funding”, December 3, 2019, available at: https://www.livemint.com/industry/infrastructure/private-equity-firms-sense-big-opportunity-in-last-mile-real-estate-funding-11575311313757.html, (Last Visited at 10 AM on 9th November, 2020).

[13] https://www.cohnreznick.com/insights/private-equity-builds-bridges-construction-industry#:~:text=Private%20equity%20brings%20a%20lot,a%20company%20needs%20to%20grow., last visited at 11:30 AM on 10th November, 2020.

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Analysis of Laws Relating To Criminal Procedure In India, USA And UAE

By: Divyashree Dhumal

The Criminal Justice System is designed to delivers justice for all. Which also means protecting the innocent, convicting criminal and providing fair trails. The Code of Criminal Procedure is provided with the rules and regulations that has to be followed by the Court and Police. The Code of Criminal Procedure does not define what are violations of laws but rather set out procedure on how a criminal case should be handled. The Code of Criminal Procedure is important for the Defendant.  The Code of Criminal Procedure guarantee’s constitutional due process to those individuals charged with crime.

It is an objective of the Code to provide an opportunity of fair trail to the accused person and to make sure that the right of the accused is not compromised. The code makes sure that there is no delay made in the investigation and ensures fair trial. It also ensures the attendance of any person who is related to with the case through the means of warrants, summons, proclamation and attachments of the property. The Code provides a detailed scheme for the working of various functionaries of the state to help and administration of the justice.

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The Code of Criminal Procedure in India.[1]

Earlier there was no constant procedure for the Criminal Justice system in India. In 1861, the Code of Criminal Procedure was passed by the British Government. It was first created in the year 1882 and then amended in the year 1898.

In (iqbal v state of maharashtra, 1975) the Supreme Court said, “It is the procedure that spells much difference between the rule of law and the rule of the whim and caprice.”

The Code of the criminal procedure is called a Criminal Procedure Code (CrPC). It is Substantive criminal law in India. The act contains 484 sections further divided into 37 chapters, 2 schedules, and 56 forms. It provides detailed information about the investigation of crime, apprehension of a suspected person, evidence collection, determination of the guilt, and determination of punishment to the offenders. The Code describes all the offenses that are present in the Indian Penal Code on how should they be dealt with.

The CrPC provides uniform sets of criminal courts throughout the territory of India by conferring jurisdictions, powers, and functions. The Code separates the Judiciary from the Executive, which enables the state to work differently without the interference of any other organ of the state. The Judicial Magistrate works under the High Court of their respective States. The Judicial Hierarchy is represented by the Chief Judicial Magistrate and first- and second-class Judicial Magistrate, District Magistrate and subordinate magistrate. Earlier jury system was followed now the jury system has been abolished.

Under the Code of Procedure, every person is entitled to Fair trail and hearing from an independent and impartial tribunal. The Accused is considered to be innocent until proven guilty. The Accused has the right to be represented by a counsel. In case, The Accused is poor and in no condition to appoint a counsel then the court provides free legal aid. Some Special provision are provided under section 313,315 and 164(2), etc. made for protecting the rights of the Accused. Special provision is made for Protection of the accused person. Supreme court of India has also given guidelines with respect of right of the accused person (D.K. Basu vs State of West Bengal , AIR 1997).

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The Procedure of the Summary cases is same as the Summons cases except where it is provided. In summons cases the offences are punishable with imprisonment up to two years. Additional revisional jurisdiction powers are also given to the session’s courts by the High Court. The revision power given to the Superior Courts cannot be exercised by the Interlocutory orders. An appeal by the state in case of acquittal can be only filed only after obtaining leave from the High court. The Court has the power punish the blatant matters in case of perjury on the spot. Public Prosecutors and assistant public prosecutors are systematized and qualification is prescribed for the same. If a case is related to the central government which has to be removed then the consent of the government has to be taken.

Code of Criminal Procedure in USA[2]

There is federative structure in the United States, the federal government and each state has their own criminal justice processes, federal criminal procedure law and 50 different state jurisdictions. The pre-trial (investigatory) process and the trial (adjudicatory) process are the two parts of criminal law procedure.

In the first century Supreme Court of United states had no constitutional criminal procedure decisions. There were two reason for this and professor Akhil Amar pointed out two reason for that: first in (Barron v. Baltimore , 1833) the court decision meant that then federal constitution did not apply in state proceedings until the incorporation of the bill of rights after the fourteenth Amendment. Second, general appellate jurisdiction over federal criminal cases until 1891 was lacked by the court. The Criminal Procedure of USA has been derived from several source of law. The criminal procedure is different from civil procedures.

Under 3 article, 2 section, clause 3 provide that in trail of crimes except in impeachment case, such trail shall be held in the states where the said crime has been committed and if not committed in that state then at a place or places as the congress by law suggests and also there shall be jury for these cases. Fifth amendment is a relevant part of the United States Constitution, which says that no person shall be answerable for a capital, or infamous crime, unless on a presentment or indictment of grand jury, except in cases of land or naval forces, or Militia,  when in actual service in time of War or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law.

Sixth amendment provides rights for the accused person such as in a criminal prosecution the accused person has right to speedy and public trail, with an impartial jury of the State and District where the crime has been committed. Eighth amendment provides that excessive bail shall not be required. Fourteenth amendment provides that no person shall be deprived of life, liberty or property without due process of law nor deny any person within the jurisdiction for equal protection of the law. Burden of proof always lies on the prosecution in a criminal trial which means that the Prosecution has to prove beyond the reasonable doubt that the defendant is liable. As there is no burden on the defendant. The Defendant has to only prove that it reasonably possible that the defendant did not commit the crime. Once both the sides have presented their cases then the case goes to the jury. The jury is made aware of all the legal rules which may affect the decision. the jury then deliberate in the jury room about whether the defendant is Guilty or not of the particular crime.

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At that point the jury is not allowed to discuss about it to anyone other than the other jury members or even read about the cases. Once the jury has decided it is called as verdict. In case the defendant is found guilty the sentence of the defendant is done by the Judge. After the sentence, the case enters the post-conviction stage and the defendant has the right to appeal to the Higher Court. American appellate does not retry the cases. In USA Plea bargaining takes place even in most serious crime such as homicide. Plea bargaining becomes impossible when the defendant is charged or indicted for the crime. After the defendant has plead guilty, the court recalls its rights. The parties participate in a discussion in which they try to agree on a particular sentence range and once they have reached to an agreement the case is disclosed in an open court. the court has the authority whether to accept the plea or not.

Criminal Procedure in UAE

The Initial step in a Criminal action for the victim is to file a complaint against the offender to the police. The complaint should set out the details of the incident that had occurred and the series of events pertaining to the criminal offences. The complaint can be in formal writing or by the way of oral statement before the police which is recorded in Arabic and then signed by the complainant. The complainant has to file the complaint before police station which has the jurisdiction. The complainant has the authority to call a witness who can testify against the offender which will be in his favour. Following the complaint, the police will have to get in contact with the accused and take his/her statement. During this whole process the accused can bring in potential witnesses who can testify for the accused.

The police have to report the case to the relevant department within the police station that are responsible for opining and reviewing the complaint. Once the police have finalized their task after taking the statements of all the parties, the complaint is given to the police prosecutor, a judicial authority empowered to refers cases to the Court. The Criminal trial in Arabic, and all statements are taken in or translated into Arabic. The Court provides the accused with sworn translator. Cases are heard before judges only, a closed setting. Only the legal counsel, the defence counsel and the parties to the case, along with the witnesses that may be haven been called are allowed in the chambers. In case if a minor is involved then parents and legal guardians can attend. There are no jury trails. The duration of a trail may vary and it depends on the emirate in which you are tried. There is no limit to the duration of trail. The punishment under U.A.E penal code are divided into two categories, sharia- based and Chastisement.

Conclusion

There is not much difference in the criminal procedure around the world and how they are enforced and applied. The Criminal trail works in the same way. But the criminal procedure in USA and India are much detailed and elaborated then UAE Criminal Procedure. The procedure of the investigation by police are also the same.

[1] https://en.wikipedia.org/

[2] https://en.wikipedia.org/wiki/United_States_constitutional_criminal_procedure

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Analysis of Corporate Laws in USA, UK and UAE

By: Tanvi Rai

Introduction

“A modern economy is marked by the feasibility of endogenous change: Modernization brings myriad arrangements from expanded property rights to company law and financial institutions.”

– Edmund Phelps

Corporate law, which is also commonly known as enterprise, business, commercial or company law is a sphere of law which deals with managing and governing rights, duties, relationships and conduct of various companies, organisations, businesses and even persons. It is directly related to the life cycle of a company/corporation/business hence it involves the company’s formation, funding, governance, death and many more related aspects.

An additional aspect of Corporate Governance is represented by capital markets, culture of the business, share ownership, and many more aspects, legal rules, characteristics, problems differ from one jurisdiction to another, yet are present in across the world. Corporate law essentially regulates and controls relations amongst companies, its investors, shareholders, board of directors, employees, creditors, other stakeholders like the government, consumers, the society at large and environment along with their interaction with one another. Commercial law is umbrella term which includes company and business laws and all activities related to them. This also includes financial and corporate governance laws.

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Brief Historical Background of Company Law

The modern company law began in the year 1844 in England, United Kingdoms, with passing of the Joint Stock Companies Act. For the very first time a corporation/company could have been incorporated by registration. Before this act, a company could only be incorporated by obtaining either by sanction of a special Act of the Parliament of England or by obtaining a Royal Charter. There was also an important creation made in the process, which was re creation of office of the Registrar of the Joint Stock Companies. In the year 1855, the English Parliament passed another act namely the limited Liability Act which provided for the limited liability to the members of a registered company. Further, in 1856, a new and comprehensive act came into force which superseded the 1854 act and marked the starting of new company law in England creating articles and memorandum of association.

In North America, this charter and new law had two purposes, one was the colonizing rub-off, and another was a trading purpose. The Hudson’s Bay company was almost completely dedicated to only trading activities but most companies like Plymouth, London Company, Massachusetts Bay Company were wholly engaged in settlement of colonists. In other parts, the chartered English Companies continued to be formed for the expansion of new trade.

Analysis of Corporate Laws in USA, UK and UAE

Corporate Law in United States of America

The United States of America is the world’s largest economy having corporate laws at federal, state and local levels and has been flooded with business prospects. This corporate law at the federal level creates minimum requirements for business in company shares and governance rights. Being capitalistic democracy, the country and its corporate laws allow the companies to get incorporated in the state of their choice and convenience, regardless of the place of their headquarters. This and other standards have been enlisted in the Securities Act of 1933 and the Securities and exchange Act of 1934. Over the last century, Delaware General Corporation Law is the most preferred State Law for incorporation of major Corporations and companies. This is specifically for the of lower corporate taxes, lesser shareholder rights against the board of directors of the company and that Delaware has a specialised court and legal profession. Nevada has replication the same. Out of the fifty states, twenty-four of them abide by the Model Business Corporation Act, whereas the states of New York and California are essential due to their massive size.

Incorporation, Charter Competition and Corporate Personality

The articles of incorporation are the foundation of the Company, they not just laid about the basics but also determine the state of incorporation of the company and accordingly levels of corporate taxes, various qualities of shareholder and stakeholder rights, the duties of directors and other things are determined. A business which has been rightly and legally incorporated acquires the status of a separate legal entity which is different from that of its investors. The company can both sue and be sued in its own name.

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Corporate Governance

In principle, a corporation’s constitution can be designed in any way so long as it complies with the compulsory rules set down by the state or federal legislature. Most state laws, and the federal government, give a broad freedom to corporations to design the relative rights of directors, shareholders, employees and other stakeholders in the articles of incorporation and the by-laws.

Duties of the Director

Decisions of a company are majorly entrusted on the directors; these can retrain as well as empower the directors in whose favour they exercise their discretion. The directors should promote shareholder value, which exercising their own business judgement to balance all the claims against various stakeholders, employees, and shareholders. Another duty of the directors are their fiduciary duties which expects them to avoid any conflict of interest between their own pursuit of profit and the interests of the corporation. Another requirement in most of the states is a basic duty of care in performance, this standard is determined from the fact that any prudent man could follow in any contract of services. But the state of Delaware has discarded these duties and allows liability waivers. Duty of care, which is primarily rested upon the shoulders of the board of directors includes standard of diligence and to act with reason and care.

Derivative Suits

The Board of Director owe their duties and responsibilities to the company as whole and not to each and every shareholder and stakeholders individually therefore the right to sue for breach of duty by the Board of directors as a whole or a single director rests by default with the company itself. Hence, this creates a problem where action is brought against a single director when the company has been taken over and the board is non- friendly or has been replaced after the company suffering bankruptcy. There are a few solutions to the aforementioned problem, first being that jurisdictions outside of US allow specific share to shareholders to claim is right. Second is by giving standing to sue to non-shareholder groups and last and the main alternative is with an independent shareholder to derive a claim on company’s behalf to sue for breach of duty. This is decided by the courts on the merits of the case.

Corporate Law in United Kingdom

The Department of Business, Enterprise and Regulatory Reform which is BERR and was formerly the Department of Trade and Industry the DTI is responsible for corporate law and Governance Directorate. UK’s interest in the development of EU company law is represented by this directorate. Matters relating to various aspects of corporate governance are dealt with in codes of best practice.

Formation of the Company

An assortment of organizations might be consolidated under the Companies Act 2006. Individuals keen on beginning the undertaking – the forthcoming chiefs, representatives and investors – may pick, initially, a limitless or a restricted organization. “Limitless” will mean the incorporators will be obligated for all misfortunes and obligations under the overall standards of private law. The choice of a restricted organization prompts a subsequent option.

Rules of Attribution

While a limited organization is considered to be a legitimate individual separate from its investors and representatives, truly, an organization can just act through its workers, from the directorate down. So there should be standards to credit rights and obligations to an organization from its actors. This typically matters in light of the fact that an oppressed outsider will need to sue whoever has cash to pay for penetrate of a commitment, and organizations as opposed to their representatives frequently have more cash.

Directors’ Duties

Directors designated to the board structure the focal expert in UK organizations. In doing their capacities, directors (regardless of whether officially designated, accepted, or “shadow directors”) owe a progression of obligations to the company. There are by and by seven key obligations systematized under the Companies Act 2006 segments 171 to 177, which mirror the precedent-based law and fair standards. These may not be restricted, deferred or contracted out of, however organizations may purchase protection to take care of directors for costs in case of breach. The solutions for penetrates of obligation were not arranged, yet keep precedent-based law and value, and incorporate remuneration for misfortunes, compensation of ill-conceived gains and explicit execution or directives.

Corporate Governance

It communicated that different rules, recommendations and rules structure the rule of corporate organization inside the UK, for instance, exclusively based law rules, for instance, trustee commitments of bosses, secured reports of an association including notice and articles of alliance, form expressly Organizations Act 1985, the presenting rules applying on all associations recorded on the Point Rules or Authority Rundown, the Consolidated Code on

Corporate Administration; be that as it may, the Code’s courses of action are not central, yet it is compulsory for the recorded associations to give their yearly report a declaration showing consistence with the Code and give reasons if not concurring. Keasey, Thompson and Wright (2005) found that the Code is joined by the Smith Direction insinuating audit sheets and evaluators; the Turnbull Direction related to

Code’s internal control need and the Higgs Audit and proposed proposition of good practices. Moreover, non-authentic standards appropriated by bodies addressing institutional monetary trained professionals, for instance, ABI PIRC (the Benefits and Venture Exploration Experts and NAPF are fundamental. All the recorded associations will without a doubt adhere to these standards. Moreover, in case of public associations’ takeovers, Mergers and the rules of the Takeover close by the City Code on Takeovers are important. Additionally, Code of Market Direct of Budgetary Administrations Authority is huge as it relates to the information introduction, which is significantly sensitive and mystery and if it isn’t followed, it might incite make a sham market.

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Corporate Law in United Arab Emirates (UAE)

The corporate law of UAE regulates all the aspects of a company and its management right from governance to finance of the company. Each emirate has its own corporate code.

Types of Business License

There are primarily four types of business licenses provided in UAE, which are professional, commercial, industrial and tourism. Services offered by the various professionals like doctors and others, artisans and craftsmen get a professional license. Trading and commercial activities come under the ambit of commercial licenses, given that these activities are undertaking with the intensions of making profits. Industrial and manufacturing activities are carried out under the industrial license. Lastly, all activities related to tourism like hospitality and travel are covered under tourism license.

Jurisdiction of the company

There are only three jurisdictions that are followed in UAE for formation of a company, there are Mainland, Free Zone and Offshore and all company are divided into these three jurisdictions. These jurisdictions are separate licensing authorities, the mainland is licensed by Department of Economic Development of the respective emirates, which the Free Zone will be licensed by the relevant free zone authority and so will the offshore authority. In the cases of commercial as well as industrial licenses, UAE National holds/owns 51% shares and 49% is held by the expat partner. While in professional license, 100% shares are owned by expat partner but UAE national is appointed as a Local Service Agent.

Limited Liability Company (LLC)

It is the most common form of registered organisation and is recommended where the purpose of the entity is to make sales within the region. An entity with a 100% foreign ownership is not allowed in UAE.  Under the Commercial Companies Law (CCL) of the UAE the foreign investors are allowed to own 49% of equity shares in national companies and 51% at all times by one or more UAE nationals.

LLC under article 218 of CCL can be formed by minimum of 1 and maximum of 50 shareholders who are limited to the liability of their share capital in the company. In the latest amendments to article 217 of CCL minimum share capital requirement is removed allowing founders of a limited liability company the freedom to determine the company’s share capital. MoA or management contract appoints managers and a LLC must appoint one manager and maximum of five managers for business for a fixed or unlimited term. They have fill managerial and administration power, but the LLC is not allowed to practice its activities without Trade License and Commercial Registration Certificate.

Branch/Representative Office

A branch or representative office has the identical legal personality as its parent company as well as operates business under the name of its parent company. The branch or representative office carries out similar activities to that of the parent company. However they are not permitted to carry on business of importing products of the parent company, as this function can only be carried on by local trade agents. In a few instances the representative office of a foreign company are required to obtain an additional license from UAE ministry of Economy. A UAE national must be appointed as a ‘service agent’ for the branch or representative office.

Civil Company

This is a company for the professional like doctors, lawyers, engineers and accountants in UAE. Except the engineering civil company all others are a 100% owned by professional partners. However, a UAE National Local Services Agent is a mandatory. A foreign company can be a partner in a civil company, as long as the foreign company is in the same field as the civil company.

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Comparative Analysis and Conclusion

There is a vast and major difference among laws in US, UK and UAE. The first and the foremost difference is that of Language. While in USA and UK the entire corporate law is in English (which may differ from each other, American English in the states and British English in UK), the law and agreements are primarily in Arabic, and if written in English, have to be deciphered in Arabic. Arabic is preferred over English in UAE.

In the USA, undertakings are at various levels, i.e., government law, state law, and the close by law/local laws. Of course, in the UAE, an individual body picks the rules, and all the organizations require to expect quick to remember. In the USA, cover rules are given to be clung to and further the state applies the relatable standards close by the associations which breaker rules into their by-laws. With the ultimate objective of expense assortment, each level powers its own evaluation which the organization needs to pay. State laws are particular in every one of the 50 states. This grows the multifaceted idea of the pattern of business. The association is restricted by first the public authority rules, by then the state rules, ultimately the local standards. UAE has a uniform system. The organization close by explicit associations picks the rules for all the associations and there is no centre level. Both for the territory associations the ones in smoothed out business zones, there is only one level at which the rules are set down similarly as the obligation procedure is taken.

In UAE, the business and the piece of the business are treated as free substances and the pay made from the branch is considered as the pay of the branch itself, however, in the USA, the branch is treated as a bit of the business and not a unit of the business. Hereafter, the evaluation to be charged on that particular branch is charged on that of the whole business.

The fundamental principles of the UAE give confined commitment to the financial specialists of the association as the business and the speculators are seen as free substances. USA gives a decision to the owners of the association to either get troubled freely on the business and the speculator’s compensation comparably as UAE or the other option is get the business pay in like manner troubled as the owner’s own personal compensation. Regardless, for the resulting decision, certain conditions are to meet.

Definitively, the relationship of corporate organization practices and laws of the UK and the U.S. are similar or there is an indistinguishable standard. Regardless, for associations and their in-house managing, the changing embodiment of the definitive scene of the two countries propels various troubles. Believe it or not, after the deplorable budgetary crisis of 2008 and 2009, the laws demand totally recorded associations to hold quick to code of ethics and related laws and rules. Considering, it has been dependable with the Sarbanes-Oxley Act and 2004 Act; nevertheless, for non-U.S. firms, SEC has been extraordinarily obliging giving them an open entryway through avoidances to develop their associations as they may go up against conflicting challenges considering neighbourhood laws. In the U.S., SOX expect a critical part for effective corporate organization while in the UK, Demonstration 2004, Smith Direction and various laws coordinate to clear money related itemizing.

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Role of Consumer Protection Law in Medical Negligence cases

By: Sreyasi Sarma

Abstract

Medical profession is a noble profession. The connection between the patient and the specialist depends on shared trust and confidence. It is a helpful weapon of shopper to guarantee responsibility of specialist organizations. The patients have begun utilizing this Act, when they are abused by clinical carelessness of the medical services. Each specialist independent of the spot of his administration has an expert commitment to broaden his administration for ensuring life. Inadequacy might be consequence of powerlessness and absence of competency while carelessness would be brought about via lack of regard. In all instances of carelessness, there will be lack yet in all instances of inadequacy, carelessness won’t be available. The Indian legal executive has excellent help in securing and protecting the privileges of the customers just as sharpening the general public concerning the privileges of the customers. The analyst through some case laws endeavour to zero in upon the legal activism on clinical carelessness risk under the Consumer Protection Act.

Introduction:

Recently, Indian culture is encountering a developing mindfulness with respect to patient’s privileges. This pattern is unmistakably detectable from the ongoing spray in suit concerning clinical expert or foundation obligation, guaranteeing redressal for the enduring caused because of clinical carelessness, vitiated assent, and penetrate of privacy emerging out of the specialist persistent relationship. The patient-focused activity of rights assurance is needed to be acknowledged in the monetary setting of the fast decay of State spending and gigantic private interest in the circle of the medical services framework and the Indian Supreme Court’s meticulous endeavours to Constitutionalize a privilege to wellbeing as a principal right. Starting at now, the arbitrating cycle concerning clinical expert obligation, be it in a purchaser discussion or a normal common or criminal court, considers precedent-based law standards identifying with carelessness, vitiated assent, and penetrate of classification. In any case, it is similarly basic to take note of that the assurance of patient’s privilege will not be at the expense of expert honesty and self-rule. There is certainly a requirement for finding some kind of harmony. Something else, the outcomes would be illogical.

With regards to acquiring measures, there is a meriting need for a two dimensional methodology. On one hand, the attractive heading focuses towards recognizable proof of least sensible principles considering the social, conservative, and social setting that would encourage the adjudicators to choose issues of expert risk on a goal premise. Then again, such distinguishing proof empowers the clinical experts to disguise such norms in their everyday release of expert obligations, which would ideally forestall to an enormous degree the situation of assurance of patient’s privileges in a litigative atmosphere. Over the long haul, the present antagonistic arrangement of specialist and the patient would go through a change to the benefit of the patient, specialist, and society on the loose.

In the law of carelessness, experts, for example, attorneys, specialists, engineers and others are remembered for the classification of people purporting some extraordinary ability or gifted people by and large. Any errand which is needed to be performed with an extraordinary ability would commonly be conceded or attempted to be performed just if the individual has the essential expertise for playing out that task. Any sensible man going into a calling which requires a specific degree of figuring out how to be known as an expert of that branch, impliedly guarantees the individual managing him that the aptitude which he purports will be practised with a sensible level of care and alert. On a similar relationship, this guarantees the patients that a specialist has the imperative expertise in the clinical calling which he is rehearsing and keeping in mind that endeavour the presentation of the errand depended to him he would practice his ability with sensible skill. Decided by this norm, a proficient including clinical expert might be held obligated for carelessness on one of two discoveries: possibly he was not had of the essential expertise which he proclaimed to have had, or, he didn’t work out, with sensible ability in the given case, the aptitude which he had.

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The norm to be applied for judging, if the individual charged has been careless, would be that of a customary equipped individual practising common ability in that calling. It isn’t vital for each expert to have the most elevated level of aptitude in that branch which he rehearses. Where a calling grasps a scope of perspectives with respect to what is an adequate norm of direct, the ability of the expert is to be decided by the most minimal standard that would be viewed as worthy. The test is the norm of the customary gifted man practising and maintaining to have that extraordinary ability. A man need not have the most noteworthy master ability; it is entrenched law that it is adequate in the event that he practices the normal expertise of a common skilled man practicing that specific workmanship.

Hence, an expert man should order the corpus of information which structures part of the expert hardware of the common individual from his calling. He ought not linger behind other common steady and clever individuals from his calling in the information on new advances, disclosures and improvements in his field. He ought to have such mindfulness as a normally able professional would have of the insufficiencies in his insight and the impediments on his ability. He should be aware of the dangers and dangers in any expert assignment, he attempts to the degree that other conventionally skillful individuals from the calling would be ready. He should bring to any expert undertaking he attempts no less mastery, ability and care than other usually skilled individuals from his calling would bring yet require bring no more.

To build up risk on that premise it must be appeared

(1) that there is a typical and ordinary practice;

(2) that the respondent has not embraced it; and

(3) that the course indeed embraced is one no expert man of conventional aptitude would have taken had he been acting with normal consideration.

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A clinical specialist can’t be held at risk essentially on the grounds that things turned out badly from incident or misfortune or through a blunder of judgment in picking one sensible course of treatment in the inclination of another. A clinical expert would be obligated just where his lead fell beneath that of the norms of a sensibly equipped.

Legal INTERPRETATION OF MEDICAL NEGLIGENCE LIABILITY

Overall, the accompanying lawful issues have been tended to and reacted to by various discussions and Courts in India.

Charge of Medical Negligence against Professional Doctors

From the hour of Lord Denning up to this point it has been held in a few decisions that a charge of expert carelessness against the clinical expert remained on an alternate balance from a charge of carelessness against the driver of an engine vehicle. The weight of verification is correspondingly more prominent on the individual who charges carelessness against a specialist. With the best ability on the planet, things here and there turned out badly in clinical treatment or careful activity. A specialist was not to be held careless essentially on the grounds that something turned out badly. The National Commission, just as the Apex Court in a catena of choices, has held that the specialist isn’t subject for carelessness in view of another person of better aptitude or information would have endorsed an alternate treatment or worked in an alternate manner. He isn’t liable of carelessness on the off chance that he has acted as per the training acknowledged as legitimate by a sensible group of clinical experts. The Hon’ble Supreme Court on account of Dr Laxman Balkrishna versus Dr Trimbak, AIR 1969 SC 128, has held the above view that is as yet viewed as a milestone judgment for choosing an instance of carelessness. On account of Indian Medical Association versus Santha, the Apex Court has concluded that the expertise of a clinical professional varies from specialist to specialist and it is officeholder upon the Complainant to demonstrate that a specialist was careless in the line of treatment that brought about the life of the patient. Along these lines, a Judge can see a specialist as blameworthy just when it is demonstrated that he has missed the mark concerning the norm of sensible clinical consideration. The standard of Res-Ipsa-Loquitur has not been commonly trailed by the Consumer Courts in India including the National Commission or even by the Apex Court in choosing the case under this Act. In a catena of choices, it has been held that it is for the Complainant to demonstrate the carelessness or insufficiency in assistance by illustrating master proof or sentiment and this reality is to be demonstrated past all sensible questions. The simple charge of carelessness will be of no assistance to the Complainant.[1]

What Constitutes Medical Negligence?

Disappointment of an activity and results are not carelessness. The term carelessness is characterized as the nonattendance or absence of care that a sensible individual ought to have taken in the conditions of the case. In the claim of carelessness for a situation of wrist drop, the accompanying perceptions were made. Nothing has been referenced in the protest or in the grounds of allure about the sort of care wanted from the specialist wherein he fizzled. It isn’t said anyplace what kind of carelessness was finished over the span of the activity. Nerves might be chopped down at the hour of activity and simple cutting of a nerve doesn’t add up to carelessness. It isn’t said that it has been intentionally done. Actually, it is additionally not said that the nerves were cut in the activity and it was not cut at the hour of the mishap. No master proof at all has been created. Just the report of the Chief Medical Officer of Haridwar has been delivered wherein it said that the patient is an instance of post-horrible wrist drop. It isn’t said that it is because of any activity or the carelessness of the specialist. The simple claim won’t present out a defence of carelessness except if it is demonstrated by solid proof and is upheld by master proof. The facts demonstrate that the activity has been performed. It is likewise evident that the Complainant has numerous costs yet except if the carelessness of the specialist is demonstrated, she isn’t qualified for any compensation.[2]

What is the Standard of Care?

It is currently a settled standard of law that a clinical expert will bring to his assignment a sensible level of expertise and information and must exercise a sensible level of care. Neither the most noteworthy nor the least level of care and fitness decided in the light of conditions for each situation is the thing that the law requires. Decided from this measuring stick, post-employable contamination or shortening of the leg was not because of any carelessness or insufficiency in help with respect to the contrary party Appellant. Inadequacy in help subsequently can’t be attached on the inverse party.[3]

For a situation that prompted visual impedance as a result, the accompanying perceptions were made. The writing concerning largo unmistakably referenced that the symptom of this medication whenever taken for a more extended length can influence visual perception however this isn’t a reality for this situation. Plus, there is no master proof on record to show that the utilization of this medication made harm the patient’s visual perception. In any event, for the wellbeing of argument, on the off chance that it is acknowledged that this medication made harm the patient’s vision, if the Respondent-specialist is one who has encouraged his patient to utilize this medication after an assessment in which he discovered the patient to be experiencing jungle fever, all things considered too the specialist Respondent can’t be held liable of carelessness or insufficient in his administration. In any case, as expressed above, for this situation, the medication has been utilized by the patient in low portions for a couple of days and there is no master proof to show that the utilization of medication has influenced his vision. Thusly, the Complainant-Appellant has neglected to demonstrate that the Respondent was careless and insufficient in his obligation as a doctor.[4]

Verification of Medical Negligence

It has been held in various decisions by the National Commission and by the Hon’ble Supreme Court that a charge of expert carelessness against a specialist remained on an alternate balance from a charge of carelessness against a driver of a vehicle. The weight of evidence is correspondingly more noteworthy on the individual who affirms carelessness against a specialist. Even with a specialist with the best aptitudes, things now and then turn out badly during clinical treatment or in a medical procedure. A specialist isn’t to be held careless essentially in light of the fact that something turned out badly. The Complainant’s vision was not re-established after the activity was led by the Appellant yet on this ground alone a specialist cannot be held careless in light of the fact that even in the wake of receiving every vital insurance and care the aftereffect of the activity may not be agreeable since it relies upon different variables. The dispute of the Appellant was that the patient was experiencing diabetes and circulatory strain and in numerous such cases, visual perception isn’t re-established after the activity anyway cautiously it is finished. For this situation, there isn’t anything on record to show that something turned out badly because of a demonstration of the Appellant-specialist. There is no proof to arrive at the resolution that the Appellant fell beneath the norm of a sensibly equipped expert in their field, to such an extent that their leaders may be meriting reproach. The Appellant can’t be subject for carelessness since another person of better ability or information would have endorsed an alternate technique for activity in an alternate manner. The proof proposes that the Appellant has played out the activity and acted as per the training routinely acknowledged and received by him in this clinic and a few patients are consistently treated for their eye issues. The Hon’ble Supreme Court on account of Dr Laxman Balkrishna versus Dr Triambak, AIR 1969 Supreme Court page 128 has held the above view and this view has been additionally affirmed on account of the Indian Medical Association versus Santha. The Apex Court and the National Commission has held that the aptitude of a clinical expert contrasts from specialist to specialist and it is an occupant upon the Complainant to demonstrate that the Appellant was careless in the line of treatment that brought about the deficiency of visual perception. A Judge can see a specialist as blameworthy just when it is demonstrated that he has missed the mark regarding a norm of sensible clinical consideration. The reality and conditions of the case before us show that the Appellant has taken care of the patient with due consideration, expertise, and determination. Basically, in light of the fact that the patient’s vision was not re-established acceptably, this record alone isn’t just for holding the specialist blameworthy of carelessness and inadequate in his obligation. It is settled law that it is for the Complainant to demonstrate the carelessness or inadequacy in help by illustrating master proof or sentiment and this reality is to be demonstrated past all sensible uncertainty. A simple claim of carelessness will be of no assistance to the Complainant. [5]

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The accompanying instances of supposed clinical carelessness give an understanding into how a ultimate choice is reached by the legal bodies. “All clinical carelessness cases concern different inquiries of reality, when we state the weight of demonstrating carelessness lies on the Complainant, it implies he has the undertaking of persuading the court that his adaptation of the realities is the right one”. No master feeling has been delivered by the Complainant to repudiate the report of the Board of Doctors. The allure of the Complainant was excused with costs as “No master feeling has been created by him.”[8] For a situation of an inappropriate association of the patella, no master has been delivered by the Complainant to demonstrate the carelessness of the contrary party. Accordingly, it can’t be said with a precision that therapy of the Complainant by the contrary party was against the standards recommended under the clinical statute or that the contrary party in any capacity was careless or inadequate in the presentation of his duties. [6]

“Charge of clinical carelessness is a major issue and it is for the individual who sets up the case to demonstrate carelessness dependent on the material on a record or via proof”. The objection of clinical carelessness was excused in light of the fact that the candidate neglected to build up and demonstrate any case of clinical negligence.[7] “Just on the grounds that the activity didn’t succeed, the specialist can’t be supposed to be careless” and the allure of the specialist was allowed.[8] “A simple claim won’t present a defence of carelessness except if it is demonstrated by solid proof and is upheld by master proof” and the allure was dismissed. “The commission can’t establish itself into a specialist body and repudiate the assertion of the specialist except if there is something opposite on the record via a specialist assessment or there is any clinical composition on which dependence could be based” and the Revision appeal of the specialist was allowed. For another situation, an X-beam report showed a little mistiness that like a hazy shadow that gets obvious for some causes other than math. It couldn’t be accepted that actually, stone existed in the correct kidney that had not been worked upon. Considering the present situation, we don’t feel that any instance of carelessness has been made by the Complainant. This request is, subsequently, allowed.[9]

RECENT SUPREME COURT DECISION AND CONCLUSION

Before the instance of Jacob Mathew versus the State of Punjab, the Supreme Court of India conveyed two distinct assessments on specialists’ obligation. In Mohanan versus Prabha G Nair and another, it decided that a specialist’s carelessness could be found out simply by filtering the material and master proof that may be introduced during a preliminary. In Suresh Gupta’s case in August 2004 the norm of carelessness that must be demonstrated to fix a specialist’s or specialist’s criminal risk was set at “net carelessness” or “wildness.”

In Suresh Gupta’s case, the Supreme Court recognized a mistake of judgment and at fault carelessness. It held that criminal indictment of specialists without sufficient clinical sentiment highlighting their blame would do an extraordinary damage to the network. A specialist can’t be gone after for at fault or criminal carelessness in all instances of clinical setbacks or incidents.

A specialist might be at risk in a common case for carelessness however simple remissness or need of due consideration and aptitude can’t be portrayed as so wild or terribly careless as to make her/him criminally obligated. The courts held that this qualification was important so the perils of clinical experts being presented to common risk may not absurdly stretch out to criminal obligation and open them to the danger of detainment for supposed criminal carelessness. Consequently, the grievance against the specialist must show carelessness or imprudence of such an extent as to demonstrate a psychological express that can be portrayed as absolutely indifferent towards the patient. Such gross carelessness alone is culpable.

On September 9, 2004, Justices Arijit Pasayat and CK Thakker alluded the subject of clinical carelessness to a bigger Bench of the Supreme Court. They saw that words, for example, “net”, “wild”, “capability”, and “apathy” didn’t happen anyplace in the meaning of “carelessness” under Section 304A of the Indian Penal Code and subsequently they couldn’t concur with the judgment conveyed on account of Dr Suresh Gupta.

The issue was chosen in the Supreme Court on account of Jacob Mathew versus the State of Punjab. The court guided the focal government to outline rules to spare specialists from pointless provocation and unjustifiable weight in playing out their obligations. It decided that until the public authority outlined such rules, the accompanying rules would win:

A private grievance of carelessness or carelessness against a specialist may not be engaged without by all appearances proof as a sound assessment of another skilled specialist supporting the charge. What’s more, the exploring official should offer a free input, ideally of an administration specialist. At long last, a specialist might be captured just if the examining official accepts that she/he would not be accessible for indictment except if captured.

[1] Smt. Savitri Singh v. Dr. Ranbir PD. Singh and others. 2004;(1) CPJ 25 (Bihar)

[2] Smt. Vimlesh Dixit v. Dr. R.K. Singhal. 2004;(I) CPJ 123

[3] Dr. Kamta Prasad Singh v. Nagina Prasad. 2000;(III) CPJ 283 (WB)

[4] Ajay Kumar v. Dr. Devendra Nath. 2004;(II) CPJ 482.

[5] Dr. Akhil Kumar Jain v. Lallan Prasad. 2004;(II) CPJ 504.

[6] Amar Singh v. Frances Newton Hospital and Anr. 2001;(I) CPJ 8.

[7] Mam Chand v. Dr. GS Mangat of Mangat Hospital. 2004;(I) CPJ 79

[8] Dr. (Smt) Kumud Garg v. Raja Bhatia. 2004;(I) CPJ 369.

[9] Dr. Harkanwaljit Singh Saini v. Gurbax Singh and Anr. 2003;(I) CPJ 153

 

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Role Of Intellectual Property Law In The Sports Industry

By: Pallavi Tiwari

  1. INTRODUCTION

Sports are said to form 1-5 percent of the GDP and thus are very important for economy and various related companies. As far as the recent trend is concerned Indian Premier League (IPL) is going on and this is the most appropriate example to understand the connection between sports, marketing and business. Here, every team has its brand value, their advertisements, their theme songs, logos, brand name, tag-lines, marketing strategy and players’ performance strategy and all of this forms a part of IPR.  All these assets need to be protected as part of IPR from being taken away by third parties.  IP in sports came up first as recommended by Kunstadt but only with respect to copyright and trademark as the players who invest labor to develop a new move should be given economic benefit for the same.[1]

Copyright subsists in the photos clicked in the IPL events and the theme song of the themes or the title track of IPL itself.[2] Design rights can be established in the bats used by players which are specially designed and aim to facilitate their game. Trademark relates to the logo of the teams or their merchandise used in the games. All this helps in the branding of the team and also create some value in the eyes of the viewers. Unless and until something is appealable it holds no value in the market, so for investment it is important that it has created some value in the market. These logos and other IP rights have to be protected so that no one else could copy them or use them in their business and gain advantage of the established image of the players or the team, according to trademark dilution under Section 29(4) of the Trademark Act. [3]

Any third party could come up with these marks or designs and thus cause great loss to the owners and can also tarnish their image by selling bad products in the name of the players or teams by creating confusion in the minds of the consumers, which happened in the famous PayPal or Paytm case. Thus sports and IP laws work in intersection with each other and IP is essential for the commercialization of sports.[4]

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  1. PATENT LAW AND SPORTS INDUSTRY

Patent law can be used in the sports industry with respect to the techniques used in the game or in the making of sports equipment to enhance the efficacy. Some examples of such patents are “D.S. Miller’s Dominant Hand Putting Method” or the “Nolan Ryan’s baseball pitch” and both are either to evade the impediments caused due to some handicap or improve the technique involved in a game. Patent can only be granted if something is novel, non-obvious and has industrial use as per Article 27(1) of the TRIPS[5] and also imbibed into the Indian Patent Law. As far as sports patents are concerned and the first requirement of novelty is to be addressed, it is important to note that even if a player has developed a technique or a move to play or designed an equipment to enhance the game it is important that he gets a patent first on it and then use it in front of other players. If he fails to do so, the patent is said to be already in the public and thus not novel or non-obvious. To determine novelty it is important that the technique or anything to be patented should not be in the mind of the public already expert in the field but the moves or techniques used by the players are just movements of limbs  and thus very commonly discussed and seen amongst the players. Thus generally players fail to get patent due to non-fulfillment of the novelty criteria. Another condition is of industrial application and there is no proof that sport related patent can be used commercially or in an industry. It depends on patent to patent and thus this condition may or may not be fulfilled.[6]

Sports is about learning new moves and mostly players learn from one another but if these moves are patented it would cause an unfair advantage on the other competitors. Sometimes another player in between of a match can use a patented move which would cause the game to come to a halt and thus destroy the basic essence of sports. Thus, this would make the players first think and then make a move or use a technique which would not be spontaneous anymore and going against the principles of sports.[7]

As far as India’s position with respect to patenting moves of a game are concerned section 3(m)[8] of the Indian Patent Act clearly debars “a mere scheme or rule or method of performing mental act or method of playing a game” from being granted a patent. Thus India is still not open to patenting of sports or the moves involved as compared to US which observes as laid down in Diamond v. Chakraborty[9] case that anything can be patented.[10]

Thus, the position of patent grant with respect to sports move is still not clear and uniform across the globe so no decision can be called upon the same.

  1. COPYRIGHT AND SPORTS INDUSTRY

As far as sports are concerned copyright exists in a lot of things like slogans for a team, pictures of players, or any other photography associated with the events. As copyright now involves broadcaster and performers’ rights under the Act, it gives a broadcaster a right to telecast a particular sporting event and to possess that right the companies pay huge amounts. So if any other person uses the broadcast for his own channel then it shall also be an infringement of copyright. These broadcasters make available to the public the sport events as each and every event cannot be attended by the viewers. Thus broadcasting is the major area where copyright subsists in case of sports and due to the revenue generated by licensing the broadcasting rights events can be organized and other related events can take place. Apart from the field events there are computer games also which use software which can be subjected to copyright protection and also patent protection when combined with hardware as computer programs or software are per se not patentable.[11] The characters or graphics used in video games are also subjected to copyright protection as now the craze for online games and events including video games are no less than field sports events.[12]

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As far as copyright in sports is concerned, there are two categories of sports that can be discussed: purposive or non-aesthetic sports or aesthetic sports.[13] Section 13 mentions about works in which copyright subsists and sports is clearly not a part of it. The case of Institute for Inner Studies v.Charlotte Anderson,[14] was one landmark case which discussed why copyright protection is not offered to sports. The High Court observed that yoga asana cannot be granted copyright protection because they are neither included under literary or dramatic work under the Act. The Court also felt that sports lack the main criteria of fixation in tangible medium with respect to copyright. It is also considered anti-competitive in nature as it will thereby reduce the scope for future players to use similar moves.

This is not the case with aesthetic sports (dance, gymnastics, skating) as they involve some creativity and can come under choreographic works protected under copyright. Dancers, gymnasts can also avail the performers’ rights under Section 38 of the Act. They also fulfill the requirements of performance under 2(q) of the Act and performer under Section 2(qq) of the Act and thus are eligible for protection. As far as uncertainty or originality is concerned with respect to copyright protection, aesthetic sports fulfill this criterion. They are also fixated in nature as most of the copyrighted works are as they constitute of certain specific moves.

Further in the case of Star India Pvt. Ltd. v. Piyush Agarwal & Ors.[15] the Single Bench observed that cricket events are subject to performers’ rights protection under the copyright act. But later on, this decision was overruled and the Delhi High Court observed that performers’ rights are not under copyright as they are clearly mentioned to be “special rights” under Section 38 of the Act. But stand in India relating to copyright protection for sports is still unclear.

  1. TRADEMARK AND PROTECTION OF LOGOS AND BRAND NAMES IN SPORTS

Trademarks are used to distinguish goods and services from one another. These days’ sports events also involve a lot of brands and use them in logos and their marks to gain commercially. This is done essentially to create a brand value for products used in these sports or to catch the viewer attention. For example, champions rise is used for FIFA and like in IPL as well every team has their own logo and mark. It helps the viewers to establish a relation with the team or game and to choose their favorite side. There have been cases where players have trademarked their name like David Beckham. In the recent trend of online games it is important to have brand names for teams and events so the viewers can distinguish between them. If some revenue has to be generated through a sports event or by a team it is important that it should have some recognition in the market and this can be established through trademark.[16]

In a famous case STJUE Arsenal v. Reed,[17] the defendant used the branded goods outside the stadium in a commercial manner unofficially thus causing an infringement. Getting trademark on a team or a player’s name which in turn become very popular helps the sports apparel manufacture to establish goodwill on the brand value of the team or the player. According to Forbes ranking it is established that “the portion of [a sports team’s] enterprise value attributable to local revenue streams like television, advertising, merchandise and tickets, that exceeds what a typical team in the same sports generates.”[18]

There are some associated rights to trademarks which are known as personality rights where a player can control how much his personality in the public can be exploited to create a brand value or use it as recognition for a product. When someone uses a player’s name on their goods and does not do well on the goodwill of the player it is a clear case of trademark dilution under Section 29(4) of the Indian Trademark Act. This brand value created by using team names or players’ names can also be used by broadcasters to attract the audience and thus IP law is all mixed up in the sports industry.

  1. TRADE SECRET IN SPORTS AND GAMES

Apart from these above-mentioned IP rights, there is one right which though not yet recognized under IP is important for the sports industry. It is trade secret which forms part of all the secret strategies of teams to win or secret compounds in their gears to make playing easy and winnable or any other dietary ingredient. It is not be disclosed to the public unlike patent rights. Generally other teams might try to steal these assets but they are to be necessarily protected so that no other team or player can gain undue advantage on the same.

Data analysis is another trade secret which needs to be protected from being used by fellow competitors. It may involve screening the way other team plays, their loopholes and the team’s strength and weakness in the past few matches. This then later on helps the team to decide how they will strategize their game and also observe patterns in the player’s physiological and psychological behavior. This data is also known as big-data and though India doesn’t recognize a specific trade secret law it still has been given special importance in US and UK with newly introduced legislations.

  1. DESIGN RIGHTS IN SPORT INDUSTRY

Design rights are generally an extension of trademark law and copyright law where the difference is only that design first of all is only to refer to aesthetic beauty of the product and cannot include anything technical or anything attributing to the functions of the products. Teams or sports events use beautiful designs for products to be used in the game like bats, balls and other goods to attract the viewer attention. It is highly creative in nature and it aims to enhance the appearance of the goods to be used so that if someone buys the product later they can associate it with the design of the team or the player.

One such example is development of clever bicycle by Lucio Tortola, a cyclist to reduce issues in the back and any chance of injury in bicycle rides. This was designed to be a shock absorber and help the cyclists in future. Now this design has become very famous and used by most of the cyclists across the globe. So design is just not for beauty but to also remove some issues involved in the game and help the future players. [19]

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  1. CONCLUSION

The author has discussed various IP rights associated with sports and players and how India stands with respect to these rights. There is also another term called ambush marketing apart from these IP rights infringements which is a problem in the sports industry. Generally it is not within the scope of IP law but needs to be addressed whenever any sports issue is under consideration. It is a very prevalent practice these days when some company tries to commercially get advantage on the basis of already established goodwill of an event. They reap commercial gains in this process by unofficially associating themselves with famous sports events and gaining advantage of being a sponsor when they are not.

Relying on afore-mentioned propositions, it is important to recognize the importance of various IP rights in sports and how they can be protected. IP is always an essential ingredient of any commercial activity and since sports is now more of commercial nature it is important to protect it. In this write-up, the author shall discuss how patent, copyright, trademark, designs, trade secret and other IP rights are closely attached to sports and how can they be infringed so that businesses and companies related to sports can avoid such activities. To save a business it is important to save the IP related to it and similar is the stand for sport industry.

[1] F. F. Scott Kieff, Robert G. Kramer &  Robert M. Kunstad, “It’s Your Turn, But It’s My Move: Intellectual Property Protection for Sports Moves”, 25 Santa Clara High Tech. L.J. 765 (2012).

[2] Anita Roy, “Shield of IPR around IPL”,  http://www.legalserviceindia.com/legal/author-616-anita-roy.html.

[3] Vaishali Singh, “The Untapped Emergence of IP Rights and Sports: Faster, Stronger and Higher” (2019) PL (IPR) July 91.

[4] Zia Akhtar, “Sports development, legal infrastructure and protecting Intellectual Property rights” http://www.africansportslawjournal.com/Sports%20development%20legal%20infrastructure%20and%20protecting%20Intellectual%20Property%20rights_.pdf.

[5] Article 27TRIPS 1994, “Patentable Subject Matter”.

[6] “Leveraging Intellectual Property In The Global Sports Economy: Sports As A Tool For Progress And Development”, Global Innovation Policy Centre, https://www.theglobalipcenter.com/introducing-leveraging-intellectual-property-in-the-global-sports-economy/.

[7] Derek Bambauer, “ Legal Responses To The Challenges Of Sports Patents”, Harvard Journal of Law & Technology Volume 18, Number 2 (2005).

[8] Section 3(m), The Patent Act, 1970 “a mere scheme or rule or method of performing mental act or method of playing game”.

[9] 447 U.S. 303 (1980).

[10] Sharada Kalamadi, “Intellectual property and the business of sports management”, (2012), http://nopr.niscair.res.in/bitstream/123456789/14768/1/JIPR%2017(5)%20437-442.pdf.

[11] S.K. Verma, “IP Protection of Software and Software Contracts In India”, Vol. 17 JIPR (2012).

[12] Molly Torsen, “Intellectual Property and Sporting Events: Effective

Protection of Event Symbols through Law and Practice”, International Intellectual Property Institute,  https://iipi.org/wp-content/uploads/2010/07/Sporting_Events_and_Intellectual_Property.pdf.

[13] Seemantani Sharma, “A Copyright Incentive for Promoting ‘Aesthetic Sports’ in India”, The Entertainment and Sports Law Journal, 17(1), 7, http://doi.org/10.16997/eslj.232.

[14] Case Number: CS(OS)–2252/2011.

[15] MIPR 2013 (1) 201; 2013 (54) PTC 222 (Del).

[16] Paras Sharma, “Intellectual Property Rights In Sports” Volume 8, Issue 3, IJCRT, (2020).

[17] [2003] EWCA Civ 696 (21 May 2003).

[18] M Ozanian “The Forbes Fab 40: The World’s Most Valuable Sports Brands 2017”, Forbes, Forbes Fab 40: Teams (2017).

[19] “Reiventing the Frame, Challenging the Status Quo”    https://www.wipo.int/ipadvantage/en/articles/article_0159.html.

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What is the difference between IPC and CrPC?

What is the difference between IPC[1] and CrPC[2]?

According to the National Crime Records Bureau, in 2018, India registered more than 50 lakh criminal cases. It is vital for the citizens of any country to know the laws and understand the differences between their applications. The maxim: Ignorantia Juris Non-excusat (Ignorance of the law is not an excuse) is embedded in the Indian Penal Code. Ignorance of Law or lack of knowledge does not stand as a defence in the court of law. India, as a country has more than 1200 laws in existence. However, crimes in India are regulated by:

  1. Indian Penal Code, 1862
  2. Criminal Procedure Code, 1973
  3. Indian Evidence Act, 1872

 

The criminal justice system in India is divided into two parts:

  1. First Part: Substantive Criminal Laws

These laws provide for the punishments for the offenders by the extent of the crime committed.

 

  1. Second Part: Procedural Law

This law provides a process for establishing the offenders’ guilt and imposing the punishment prescribed under the substantive criminal laws.

  • The Indian Penal Code, 1862

The Code is the country’s primary criminal Code and was drafted during the British Raj in the year 1850 and was presented to the then Legislative Council in the year 1856. It came into force on 01st January 1862.

The Code covers various offences (divided into multiple categories) and the related punishments for the said crimes. For instance, Crimes against the body (Murder, kidnapping, Culpable homicide, etc.), Crimes against property (theft, dacoity, etc.), Economic crimes (Cheating and Counterfeiting) and various other crimes.

  • Criminal Procedure Code, 1973

The Code is the procedural law which provides a detailed procedure for punishments under the penal laws. It thereby enforces and administers the Indian Penal Code and various other substantive criminal laws. The Parliament enacted the Code on 25th January 1974 to consolidate and amend the law relating to Criminal Procedure.

The Criminal Procedure Code is read along with the Indian Penal Code, 1862 and the Indian Evidence Act, 1872. There often exists a state of perplexity concerning the difference between the Indian Penal Code, 1862 and the Criminal Procedure Code, 1973. Let us now look at the differences between the two legislations.

 

Difference between the Indian Penal Code, 1862 and Criminal Procedure Code, 1973

  1. The Indian Penal Code is a substantive law[3], whereas the Criminal Procedure Code is procedural law.[4]
  2. The Indian Penal Code states various crimes and classifies them into multiple categories. The Code also prescribes the penalties and the punishment for the respective offences. On the other hand, the Criminal Procedure Code defines the procedure that the police take to investigate any violation after having committed any crime mentioned under the penal laws.
  3. The Indian Penal Code aims to provide a primary penal code in the country for giving punishment to the wrongdoers. On the other hand, the Criminal Procedure Code’s main motive is to provide for binding procedures that must be enacted during the administration of a criminal trial.
  4. The Criminal Procedure Code, 1973 provides for the courts and Magistrate’s powers, while the Indian Penal Code does not.

Let us now take an example to understand the difference between the legislations better.

Izzie to kill Mathew enters his house and murders him by hitting him with a hammer and slitting his throat. Section 300 of the Indian Penal Code, 1860 defines ‘Murder.’ And Section 302 of the Code prescribes the punishment for the said crime. The section specifies that any person who commits the act will be punished with death or life imprisonment.

How will Izzie be punished for the crime committed?

Murder is a non-bailable and cognizable offence. The Criminal Procedure Code, 1973 thus specifies a procedure to be followed to determine the offender’s guilt, whether or not bail will be granted, evidence to be taken into account, trial, investigation and impose the individual penalty.

CONCLUSION

The three primary legislation governing criminal law in India: Indian Penal Code, Code of Criminal Procedure and the Indian Evidence Act continue to play an essential role in the courts of law for the effective execution and justice administration. Due to the rise in crimes and criminals, it becomes vital for all citizens to learn the country’s primary criminal laws’ fundamental differences.

[1]The full form of IPC is Indian Penal Code

[2] The full form of CrPC is Criminal Procedure Code

[3] Substantive laws refer to those laws that define individuals’ rights and duties and the respective punishment and organizations.

[4] Procedural Laws include those rules that govern the process of determining individuals and organizations’ duties and rights.