You cannot settle scores in the Indian Courts; try the U.S. Federal Courts!

Because now, the laws of all nations will be a subordinated to the US laws.

Few would think it possible. Fewer would believe it. Slowly but inexorably, laws of various nations are being subordinated to the US laws by some crafty individuals who claim loyalty to their motherlands but use the U.S. as the business-land.

A case in point is that of James Martin & Co., India. It was founded in 1992 as a Joint Venture (JV) with an Indian partner and an explicit clause to have Delhi as its court jurisdiction.

The UK Company, James Martin Holding, later shifted its headquarters to the US. It did not honor the commitments made in the JV agreement and let the Indian JV just about survive on its own, in a climate where McKinsey and Anderson Consulting had multi-million dollar budgets for their Indian operations. Still, it managed to get some visibility, did some good work and continued to survive on its own.

Then in 2000, some venture capitalists put in approximately $200 Million in the James Martin & Co, USA that led to a change of management. The new management decided to violate the Indian JV by totally disregarding it and refused to put the name of the company on the website, making it difficult for the company to operate as an arm of a global organization.

Meanwhile, the venture capitalists lost the trust of the older management who subsequently left in hoards and the new management was so clueless about running the company that it lost revenue year after year and rather than becoming a $1 Billion consulting in 10 years, it did below its 2000 revenues six years later.

One year after the change of management, the US company started negotiating with various firms to tie up with, in India and when it became public, the Indian JV approached the Delhi High Court citing non compete clauses and that the US company could not do business in India per the JV agreement outside the agreement with the local founders.

The US Company went to WIPO in Geneva to bar the Indian company from using its name and their motion was rejected.

In the meantime, they had already acquired Techspan and that was in gross violation of the High Court orders. A contempt case was brought up to the Delhi High Court and that continues.

Meanwhile, the US company decided that it could not operate with the US managers and in the absence of competent managers within the US company, decided to ask the management of the acquired company, Techspan, to take the lead, thereby appointing Arjun Malhotra (of HCL school of business practices) as its new CEO.

Arjun Malhotra decided to sue the founders of the JV in India in an US Federal Court, saying that people under the control of the Indian JV had written emails that went out to analysts etc. and hurt their business. This, while the case is being heard by the Delhi High Court, where they have an injunction against them and they have already submitted to its jurisdiction. The JVA is explicit about Delhi as the jurisdiction and still a US court has accepted the petition, thereby undermining the authority of the Indian High Court.

Is the Indian Law Minister listening?

 

1.           Clause 8.1 of the JVA, which has been reproduced herein below, prohibits the Respondent from entering into any joint venture, collaboration or business / commercial / economic cooperation of any kind with any other party within India without the express written approval of the Petitioner:

"8.1     "JMH" shall not compete directly or indirectly with the Joint Venture in any shape or form within India, and hereby agrees not to enter into any other joint venture, collaboration, or business / commercial / economic cooperation of any kind with any other party within India, without the express written approval of "Founders", which approval shall not unreasonably be withheld. This stipulation also applies to any or all of "JMH's" subsidiaries, associates or any other companies it may form in the future."

2.             That this Hon'ble Court, after hearing both the parties, passed the following Order on 22.08.2003:

" … Counsel for the petitioner has drawn the attention of this Court to the Joint Venture Agreement between the Petitioner and the Respondent in which, the petitioner is referred as one of the founders. According to Clause 8.1 of the agreement, James Martin Holding stands debarred from entering into any other joint venture, collaboration or business / commercial / economic cooperation of any kind with any other party within India, without the express written approval of "Founders", which according to the clause itself, is not to be unreasonably withheld by the "Founders".            

Counsel for the petitioner submits that the respondent is trying to enter into a new collaboration without giving any notice to the petitioner, who is one of the "Founders", for obtaining his approval in terms of clause 8.1           

Till the next date of hearing, the respondent stands restrained from entering into any new Joint Venture Agreement with any other party without the express written approval of the petitioner. However, in case, a notice is given for entering into any new Joint Venture Agreement, the approval shall not be unreasonably withheld by the petitioner as envisaged in clause 8.1 of the Agreement…."

It is respectfully submitted that the said interim order is continuing till date.