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<b>Somasekhar Sundaresan:</b> Karmic cycle plays a role in investments too

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Somasekhar Sundaresan
Last Updated : Jan 21 2013 | 2:54 AM IST

Diana Eck, an Indologist, and long-standing faculty of religious studies at Harvard University, has published a book titled 'India: A Sacred Geography'. Billed as a work of a lifetime, the book argues that it is "Hinduism" that keeps the hugely diverse and multi-religious India stubbornly united.

Eck's take on the effect of "Hindu" cultural nationalism is precisely what would warm the cockles of Hindutva-vadi hearts. Even having such a view is often enough to churn the stomachs of secularists in India - it is sadly no longer possible for an Indian scholar to take a dispassionate position on this subject either way, without being branded as either a "communalist" or a "pseudo-secularist".

Yet, even while she must have been giving finishing touches to her book, last December, Eck traded a body blow to Indian Hindu nationalist politician Subramaniam Swamy. She piloted his expulsion as visiting faculty of Harvard on the ground that he spreads communal hatred. Surfing through just some of Swamy's lectures on Youtube would lend sympathy for this allegation. The veritable street-fighter Swamy did not manage to hold his ground at Harvard even while he was scoring unprecedented victories in Indian courts, challenging the allocation of 2G spectrum. In recent weeks, ruling on litigation spearheaded by Swamy, the Supreme Court ruled that the allocation of 2G spectrum was illegal, and licenses granted to various allottees have been ordered cancelled - a move that has stunned investors worldwide.

It is perhaps the Hindu concept of karma that is at play here. What goes around comes around. A gladiator in Indian courts gets knocked out of Harvard with barely a fight. A religious philosopher, who wears pluralism on her sleeve, exposes herself to potential accusations of harboring communal Hindu thought. Likewise, even while the India government is seeking to brazenly overturn Supreme Court decisions through legislation, and by filing of reviews (it is raining reviews in the court of last appeal), the Republic of India was left shamefaced when an international tribunal ruled that India does not provide providing "effective means" for assertion of claims and enforcement of rights, thereby violating its obligation under a bilateral investment treaty with Australia.

And, it was the Indian judicial system that has the government on its knees - mostly on matters of high policy, rarely on specific application of policy to projects - that came in for judgement by the international tribunal. Ruling on a claim filed by an Australian coal technology company against the Republic of India (state-owned Coal India Ltd. had effectively been frustrating the enforcement of an international arbitration award that Coal India had comprehensively lost) under the investment treaty between India and Australia, the international tribunal's award makes for shameful reading.

Most of the claims of the Australian company (that Coal India's actions are but acts of the government) were not upheld. However, that there was no effective means of enforcing rights, despite a voluntary promise held out in the treaty, came out clearly in the award. Having won a money claim against Coal India in the International Chamber of Commerce ("ICC"), the Australian company sought enforcement of the award in the Delhi High Court. Meanwhile Coal India filed a challenge to the ICC award in the Calcutta High Court. A petition to the Supreme Court (would have normally been expected to resolve conflicting proceedings on the same ICC award) did not get heard for nearly four and half years, and continues to be languishing on the court's board.

The proceedings to enforce the ICC award in the Delhi High Court got stayed. The proceedings to set aside the ICC award is placed for "expeditious hearing" on the Calcutta High Court's weekly board, where it has remained - all told, the very basic issue of jurisdiction of a court to consider a challenge to an international award has remained undetermined for over nine years. Disposing of the dispute under the bilateral treaty, the tribunal has asked the Republic of India to pay up the amount due from Coal India to the Australian company.

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Indeed, the karma of Coal India and the Indian government is also catching up. While the Republic of India convinced the international tribunal to hold that Coal India is run independent of government interference, in recent weeks, another controversy is brewing - the government has asserted its right to dictate to Coal India, the price at which coal should be supplied to power projects. Coal India has been publishing ads with photographs of the pantheon ranging from Sonia Gandhi to the coal minister about how it proudly does the Indian government's bidding as an effective minion.

Patriotic commentators have been reminding an activist investor-shareholder in Coal India about how the company's articles of association have always said the Indian government can "rightfully" dictate terms to Coal India on operational matters - all within weeks of telling an international tribunal just the opposite.

The latest in the karmic chain is reportedly the Presidential Reference being made to the Supreme Court in the 2G scam case. Scared of action under other bilateral investment treaties, the government is seeking an interpretation from the Supreme Court on how to work out its order setting aside the allocation of 2G spectrum.

Anyone who doubted the findings of the "Doing Business 2011: Making a Difference for Entrepreneurs" survey report published by the World Bank and the International Finance Corporation (India was ranked 182nd out of 183 countries - ahead only of Timor), should now stop mocking the survey for placing war-ravaged Afghanistan ahead of India in this department.

(The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own.) somasekhar@jsalaw.com

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First Published: Apr 09 2012 | 12:10 AM IST

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