Delivering Value To The Business Is Key For A GC: Badrinath Durvasula, M.D.- Legal, Essar Group

Mr Durvasula, Would you please take the readers down the memory lane and share with us about your glorious journey in law.

I started at General Insurance Corporation, but post that when I moved into the private world, it was  the Asian paints, where I was a general counsel, followed by Reliance Industries Limited when both the Ambani brothers were together, I was heading the operations, including that of setting up the new refinery and I was based in London for about three years in terms of erecting the mega project, which has given me substantial experience. Thereafter, I moved to Larsen and Toubro as the general counsel and handled number of assorted businesses, which gave me a fantastic perspective about contract management, and what the contractor would actually look at contract to what Reliance industries is doing it as such. 

So, it's a contra- thinking about it and how to execute the projects efficiently, diligently and up to your mark and class, I think that's what Larsen and Toubro has really taught me. Thereafter, my journey went to Adani Group, as we all know is a very aggressive group, very ambitious, but at the same time, very conservative in some of the businesses, they don't want to get into some businesses but definitely they will pitch in some of good businesses where they see a huge potential. I was there as a GC with them for a reasonably long time, and thereafter for my own reasons I had to move out of Ahmedabad back to Bombay. 

Now, I'm currently managing director with the Essar Group, is into a phase two of the past and now the new promoters, the siblings of the Ruia family have taken over, and they have been doing pretty good in terms of international business as well as the Indian business and scaling up their investments into multiple geographies. I think that's where the journey started. If you ask about the kind of niche practice which I had, i come from the manufacturing background, as well as the contract management, both things have really given a kind of a good perspective, working with all these companies, that's a little journey. 

If you ask me about the specific experience which I have, I think, overall it is project management, which has really sailed me through all these years, the project management is a very complex management, and it doesn't come as a kind of handy to anybody. When you speak about the project management. It's not only merely the contracting, but running the contract through a period of time till the turnkey contract is delivered to the hands of the customer. 

During the course, there'll be project delays. But remember one thing that the owners are and reputed contractors are few. So there is bonding which is there between the people.

And  L&T has showcased to the world that it is one company one need to be reliant upon and really can deliver the goods, the way in which the customer wants. I think the customer satisfaction being the epitome of any kind of a contract management. Project management is huge responsibility in terms of commercials, in terms of variation claims, time extensions and sometimes you need to forego some of the jobs which you are doing and contractual reductions, they are very essential, then only one will be in a position to really go through. That's one aspect. 

Then, the second is, during the course of the project management, obviously, no contract goes without a kind of tussle between the two parties, every contract is big, there is bound to be some kind of a dispute, and more so in a project management, there are bound to be multiple disputes. They can be local or international. 

Today with the kind of climate and distribution and the geographical spread the claims are a bit on the higher side and one needs to be very careful about it.  Most of these claims are settled in- house between the parties in a forum but, quite often, they go out also, out of the hands of the parties to international tribunals, like SISE, ICC and LCIA. These are the three major forums, where I had the personal experience of going through the deliberations in a very intense and in- depth manner. 

I think that's what has really given me kind of a perspective on international arbitrations. Apart from that, arbitrations and the kind of contract management, it is a commercial sense, that gave me a kind of an insight to rise to a position, where I'm in today. 

I think, if I speak about a business, I can understand what the business is about and what the parties are speaking about it and I can appreciate the kind of difficulties because working from RIL, who is the owner, he knows what expectations to take it from the client and working from L&T gave me a perspective of a contractor's expectation from the owner. So, both things blend together. 

I had a fair ringside view of how the kind of things that will pan out between the two parties. 

So, whichever position or whichever role we take, I think we need to step into the shoes of the other side. That's something very essential. As a general counsel one need to say, yes, we need to advise the side on which we are working.

In many situations, they'll be kind of an alternative that will be generated. 

So, what are the best alternatives that could come out of a situation? 

Its called a situational analysis, which is something which we prepone or we tend to present to the management, so that the management is prepared to take a call, whether to go with a dispute or whether to go with a settlement or whether to go with any other alternative as such. 

So, I think the commercial angle is something which is very essential for a legal counsel to comprehend and understand. 

What would be your golden tips to be a successful General Counsel? 

There are three golden rules to be a successful General Counsel.

One, understand the business, where you're working. I think most of the legal fraternity in their younger days, they may think that's just vetting an agreement, or just going through a dispute is the end of the road, it’s not that. One needs to understand the kind of industry for which they are working and what know it inside out.

Point number two, always look at the counter-point. Why the other side is giving this kind of a point, what are the advantages versus disadvantages, am I being strangulated or am I being brought into a kind of an even table. I think that kind of a balancing act, a general counsel with his experience would be in a position to make out.

Third is that, please ensure notwithstanding your budgets, notwithstanding the commitment, notwithstanding the kind of the foresight, notwithstanding the kind of aggression, the side on which you are working. It should not land in a kind of a dispute. Because the dispute doesn't earn anybody, a kind of a price, which they are actually looking at.

I think to the extent possible, we need to resolve the issues by amicable settlement and by failing which there can be kind of a conciliatory mechanism between the both the parties. I don't think any arbitral tribunal, or the court is going to do a better justice, than the parties themselves sitting together and arriving at a kind of a solution, if they put it up. I think that's something which a general counsel needs to promote. I think these are the three virtues, which bring in the intellectual value, the commercial value and the legal value. 

So, the legal counsel should not sit in an ideal pedestal of adding a department or anything as such, but he needs to run through the spectrum on an end to end basis to understand how he is delivering the value for the business they are in. 

What is your prediction for the evolving lawyering landscape?

There is a marked shift in the legal landscape. Today, the lawyers are specializing in the areas which are the most wanted, say for example the IBC, has become a major initiative for the lawyers to tune themselves to the kind of demands which the institutions require as such, I think that's one key area which is going to have a robust mechanism or the robust kind of school of thought or a set of lawyers dedicated themselves for the IBC mechanism in the years to come. 

The second most important school which I see is the arbitration, already it has evolved to a certain extent but the institutional arbitration needs to set in, the in- house lawyers need to choose for themselves or the lawyers need to tune themselves for arbitration to ensure quicker, faster and better delivery of the justice.

Third thing are the green tribunals, because today we are at the crossroads in India, in terms of people's individual aspirations versus the economic aspirations. 

I think these are bound to come in conflict. 

So, the green tribunals are going to play a dominant role in terms of setting up an industry, encroaching upon the land by encroaching upon the people's rights. For that matter the tribunals are created but are more specific to the green tribunals, because I see  visionary issues with the green tribunals in coming years.

Come 2030, the land is going to be scarce, come 2050, land is going to be absolutely scarce and the population is going to increase. So how to balance the equation? 

Another important thing which enforcing is in terms of integration of the foreign legal counsels with that of the Indian legal counsels. 

There could be some good practices, there can be something different, but this, there are, they're unparalleled, they're never integrated. I think that gives a kind of insight in terms of how best we blend our skills, the foreign skills, whether it be arbitration or the kind of pure law or civil commercial whatever it may be that need to be blended with India that's a second marked shift, which I am seeing for myself. 

The third important thing is the arbitral institutions. Arbitral institutions today, though they have come in Delhi in Chennai in Bangalore in Bombay wherever it has come. 

I don't think that's sufficient enough and they are not really reached the scale, where they should or reach or instill the confidence and mindset of the people who look forward to arbitral institution as a kind of an institution, they are nowhere near the LCIS or the world or that of the SISE of the world, they're not really reached that kind of benchmark. 

I think that is something which will come, it's not going to be delayed any further. The government and the people and the industry, there all together on this front and the new schools will come in the next couple of years, I'm seeing some consolidation happening on the institutions that are likely to handle the arbitration, if there will be a market shift from the individual arbitration or ad hoc arbitration to that of an institutional arbitration. The fourth important thing that is likely to come into the mind is the litigation funding. 

Today, litigation has become so expensive, even a good corporate is not in a position to face or budget, the kind of litigation. Already every house is scouting for litigation funding, including where I'm working. 

So, this is the mark shift from when I was there when I was at Reliance or that of the L&T, they never looked for litigation funding. But, today every institution including these institutions are looking for litigation funding, there could be a cost and there could be a set of. But the point is that end of the day, one doesn't burn its own fingers, and the cash that is available in the system can be productively deployed and utilized for some other purpose. I think that's the whole intent of the litigation funding. 

Last but not the least, BIT, Bilateral Investment Treaty mechanism is going assume true significance. Because we have not yet experienced what is BIT. 

I'm sure that we are aware about the Vodafone judgment but that's a tip of the iceberg, that's one of the ones which are coming, but there are lot many which are knocking the doors as such because people somehow have realized that the overseas investment, which have been plowed into India have not been giving the kind of effective results, or the promises which have been made by the Indian government. 

So, the only recourse left is not the courts, not the civil litigation, which will drag for years, it's the BIT that will come in a big way. 

So, these are my five  areas for the future and lawyers need to evolve themselves from traditional lawyering to an elevated level for times to come.

Thank you so much, Mr. Durvasula. I couldn't keep my hands free because I was writing all the points that you were mentioning from IBC to arbitration institutional arbitration, and what a great insight into the Green Tribunal and the land and population, which is going to be a reason for us to worry about and so many things to take in. Thank you so much for that and before you know we close this conversation, any one compliance that you see that company should look forward to in the sense of any risk that is coming our way in the near future, something that would be a red flag for you. So, anything on that?

I told you that I worked with the companies like Reliance, Adani’s and Essar. These are all the project manufacturing based, including that of the Asian Paints. So, in any manufacturing hub, I think India is manufacturing centric, as much as services centric.

If you put on a scale of 1 to 10, the manufacturing is 4 out of 10 and the service sector is about 7 out of 10 as such. In both these sectors, the compliances are little differently focused. 

In the manufacturing sector, It is a green initiatives and greenfield projects, and the Brownfield projects, which are of major concern. 

I may put anything for the plan, I might mobilize the capital, everything as such, but what I see as the biggest kind of the red flag for me, is a kind of an environmental concern, environmental approvals. These are the ones which I constantly read them as at 50% of my risk element, remaining is very miniscule for me, because everything is being ready, but suddenly there'll be some stoppage for me to set up the plant, that's one way to look at it. 

So, the other kind of green initiatives are the kind of the green rules which keeps changing very dynamically. What is permitted will be surely be prohibited tomorrow, be assured about it. So, when I forecast a two- year roadmap for my manufacturing or set up a plant perspective, this is something we need to have a red flag all the time. 

Coming to the service sector, it is mostly laced with a geographical risk and the local regulation risk, and particularly the privacy and the data privacy related things are something of a major challenge for a service industry, even in a manufacturing sector also whenever we do it, and whatever we transfer and whatever we really store, as a matter of a data ,the data privacy however much we hold it very tight, there are bound to be certain loopholes and the leakages as such, I think that is where we are really worried about it. 

People constantly attack the data privacy angle and hackers really aim at that. So, ultimately, the company is responsible for it. The kind of firewalls, it keeps as such. I think these are the main my concerns on the compliance front.

*Edited from BW Legal World GC Conference 2021