Personality rights in sports : ICC Development (International Ltd.) v. Arvee Enterprises & Anr.

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August 25, 2021

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This article is written by Ananya Agarwal, pursuing a Diploma in Intellectual Property, Media, and Entertainment Laws from Lawsikho.com.

Table of Contents

Introduction

There is no doubt that famous personalities live very differently. They thrive on retention value which means that they can be recognized easily from their voice, signature, pictures, or even likeness. Although this comes with certain perks, it makes them vulnerable to imitation. Here, the right to publicity comes into play. This right is recognized as part of the intellectual property right of a famous personality. It essentially aids a personality in legally protecting their personality from being imitated or used without authorization. It refers to the right to control the use of one’s name, picture, or likeness and to prevent another from using it for commercial benefit without consent. Coupled with the right to privacy, as is constitutionally guaranteed, the two rights form personality rights. This article seeks to examine personality rights in the context of sportspeople by analyzing the landmark case ICC Development (International Ltd.) v. Arvee Enterprises & Anr., 2003 (26) PTC 245.

Facts of the case

The facts of the case are such:

The plaintiffs were organizers of the ICC World Cup event to be held in South Africa in 2003. For this purpose, the plaintiff created a distinct logo and a mascot ‘Dazzler’.
The plaintiff had also filed applications for registering trademarks ‘ICC Cricket World Cup South Africa 2003’ and the logo and mascot for ‘Dazzler’.
Subsequently, the defendants started a sales promotion strategy where they used slogans such as ‘Philips: Diwali Manao World Cup Jao’, inserting a picture of a ticket with a made-up seat and gate number saying ‘Cricket World Cup 2003’.
Due to this the plaintiff filed a suit for injunction to own and control all commercial rights including media, sponsorship, and other intellectual property rights pertaining to ICC events and pleaded that ICC events have a personality of their own.

Issues involved in the case

The issue that arose with respect to personality rights was three-fold:

Whether the defendants were misrepresenting their association with the plaintiffs and the World Cup.
Whether the defendants sought to unlawfully derive commercial benefit from this misrepresentation.
Whether the defendants deprived the sponsors of the world cup of enjoying the exclusivity of the rights granted to them.

Arguments advanced by both parties

Plaintiff

The plaintiffs essentially made a four-fold claim with respect to the defendants’ alleged infringing actions:

The defendants were wilfully misrepresenting their association with the plaintiffs during the world cup by their marketing. In doing so, they were aiming to derive undeserved commercial benefit from such association. This was an infringement of the personality rights of the plaintiffs
The defendants were engaged in the same line of business as the plaintiffs and thus their actions must be construed as malafide and dishonest with their intention being to bring disrepute to the World Cup and its sponsors.
The ticket conditions expressly forbid distribution of tickets by the defendants unless authorization for the same is given by the plaintiff. Their actions can be seen as a case of ambush marketing.
The defendants deprived the sponsors of the world cup of enjoying the exclusivity of the rights granted to them.

Defendants

In lieu of the claims made by the plaintiffs, the defendants justified their actions in the following manner:

The defendants stated that the words ‘World Cup’ were used merely in a generic manner as is evidenced by the fact that they did not associate it with the prominent logo associated with the plaintiffs nor did they use the entire phrase ‘ICC Cricket World Cup South Africa 2003’.
The slogan in the advertising only implies that the winner may receive a ticket or a tour package from a travel company to see the World Cup event. Their advertisement in no way creates a likelihood of confusion in the minds of a reasonable person that they are the sponsors of the event.
The defendants had no intention of creating any association, relationship or affiliation with the plaintiff.
The “World Cup” is a generic word and has been used to refer to several other international sporting events. It is also not protected by any international treaty or domestic law unlike the word “Olympic” and its logo, which is protected under the Emblems and Names (Prevention of Improper Use) Act 1950.
With respect to the ticket conditions, the defendants claimed that they booked through the sole authorized agent of the plaintiff and no ticket conditions were brought to their notice then.

Analysis of the case

Before analyzing the judgment given by the court in this landmark case, a basic analysis of the relevant concepts must be undertaken.

Concept analysis

Concept of celebrity and personality rights

Personality right recognizes the commercial value of a celebrity persona and protects the proprietary interest of the celebrity in the profitability of their public image. In India, this right is not statutorily guaranteed but courts have taken cognizance of this right and set up a jurisprudential framework for grievance redressal. Personality rights are extended primarily to celebrities. ‘Celebrity’ originates from the Latin word ‘celebritatem’, the condition of being famous. Essentially, personality right covers within its ambit physical features of the celebrity, for example, the face, unique hairstyles, etc. It also includes the name of an actor, the voice of an actor, photographs, casual video footage, or even the signature of the celebrity. Unique movements specific to celebrities, for example, flipping off the spectacles like Rajnikanth may also be considered as a personality trait. Summarily speaking, it includes all those traits and characteristics of a person that is central or ancillary to him/her being a celebrity.

Therefore, the biggest requirement for the extension of personality or celebrity rights is public perception, that is, whether a person has captured public attention or not. The individual will have to establish a certain level of fame and public recognition to claim personality rights. This implies that personality rights are extended to sportspeople as well.

In the arena of sports

In Europe, organizations have used player’s image and personality rights to generate huge revenues. In September 2013, Real Madrid bought Welsh footballer Gareth Bale for a world record transfer fee of £85.3 million (US$105.3 million). Bale in return assigned 50% of his image rights to Real Madrid, which eventually helped the club to recover the massive investment by using his image rights for the sale of merchandise and other product endorsements. This further helps in deciding wages for players too, with players such as David Beckham incorporating companies for their name and image which aids in tax planning. Players such as Sachin Tendulkar have taken the protection of their image one step further by trademarking their name or domain names for their websites.

An avid football fan must know of Jose Mourinho, manager of England’s Manchester United. In a recent example of a dispute over personality rights, an issue arose as to the appointment of Jose Mourinho between Manchester United and Chelsea. Chelsea wanted the use of his personality rights halted by United as they held a number of EU trademarks for his name, signature, and various other goods, and also owned his image rights. Finally, the issue was solved when United relented and paid Chelsea an undisclosed amount (estimated to be over a million pounds) for the acquisition of Mourinho’s personality rights.

Concept of passing off

Passing off is essentially when a person sells a product by misrepresenting it to be someone else’s. It results in a company piggybacking on the goodwill of another company. The underlying principle is encapsulated in Perry v. Truefitt is that no man should sell a good under the pretence it is of another man. Further, in S. Syed Mohideen v. P. Sulochana Bai, the court held that passing off is a wide remedy maintainable for diverse reasons other than that of registered rights. In a suit for passing off the petitioner must remember that proving goodwill means establishing that the general public associates the mark with the product. In the case of Micolube India Ltd. v. Maggon Auto Centre, the court held that in a suit for passing off, it must be proven by the petitioner that the consumer was deceived and misled into buying the contended product and that this product is associated with the products of the first user of the mark. Notably, a trademark can be registered only if the mark has acquired a secondary meaning i.e., it has some sort of distinctiveness in its connection to the product being sold. In the case of Toyota Jidosha Kabushiki Kaisha v. M/S Prius Auto Industries Limited, it was held that a suit for passing off depends on proving the prior user having goodwill.

So how does infringement of personality rights give rise to a suit for passing off? This is so because violating someone’s publicity rights is often done in the form of misrepresentation which leads to the damaging of the personality’s goodwill which in turn causes him/her economic and reputational loss.

Analysis of judgement

ICC Development v. Arvee Enterprises was the first judgment in the Indian legal regime dealing with the question of publicity and personality rights. From an understanding of personality rights and their interplay with sports, as explained above, it is important to look at the principles laid down in this judgment with respect to the same. The plaintiff claimed that the defendants had passed off their association with the World Cup and thus infringed their personality or publicity rights. However, the court disagreed on this count. They held that personality rights are those arising from the right to privacy. While deciding the matter, the court came to the conclusion that “publicity right has evolved from the right to privacy and can be in here only in an individual or in any indicia of an individual’s personality like his name, personality trait, signature, voice, etc…. Any effort to take away the publicity right from the individuals to the organizer of the event would be violative of articles 19 and 21 of the Constitution of India. The publicity right vests in an individual and he alone is entitled to profit from it.” The case, contrary to the practice in the USA, blurred the distinction between the right to privacy and publicity rights. Therefore, the courts held that the Right of Publicity does not extend to non-living entities. An individual may acquire the Right of Publicity by virtue of association with an event; however, that right does not apply to the event in question, nor the organizer behind the event.

Further, with regard to passing off, the defendant does not use any goods or services of the plaintiff but merely creates a slogan using the word ‘World Cup’. The court even expanded on the fact the term ‘World Cup’ was generic and non-exclusive owing to the fact that it is the dictionary term for an event or tournament in which several countries participate. The intent of this is to solely convey the message to people that those who purchase their products stand a chance to win the ticket for the world cup. No reasonable man was convinced of or under the misimpression that the defendants were sponsors of the event. Due to this, no form of reputational or economic loss is incurred by the plaintiffs. Since, here, no element of unfair competition or wrongful appropriation exists, the defendants cannot be held liable for passing off, as the basic principle of passing off is not met.

Conclusion

This landmark judgment was one of its kind owing to the fact that it was the first Indian case to recognize personality rights. A step in the right direction, it was, however incomplete. Due to a growing trend of aggressive and moment marketing, the need for the protection of personality rights becomes more highlighted. In India, the concept of personality rights with respect to sportspersons is still in the nascent stage. For instance, the Indian government had permitted the use of a picture of John Terry, a famous footballer who was the captain of England’s national team, on cigarette packets. With Sachin Tendulkar assigning his image rights for his biography, Playing It My Way, more and more celebrities and sportspersons are following the trend. There is a need for greater exposure, which will lead to more commercial opportunities, which in turn leads to a host of legal issues. Although protection is offered under Article 21 as an offshoot of the right to privacy, the author believes that due to the growing complexity of this issue, a codified law would be better suited.

References

4.https://llbmania.com/2021/08/03/icc-development-international-ltd-v-arvee-enterprises-ltd-2003/

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What would happen if an Apple-Disney merger was to take place

By

Abanti Bose

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August 25, 2021

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This article is written by Alivya Sahay, pursuing Diploma in M&A, Institutional Finance and Investment Laws (PE and VC transactions) from Lawsikho.

Table of Contents

Introduction

A merger or an acquisition of any company has got manifold ruminations, growth and development being its pivotal reasons. When the integrations between the companies are executed correctly it can increase the power base it holds in the market as well as increase its synergies, foray into new market shares and explore better opportunities, reduce the competition between entities and gauge access to a newer customer base, hence, boosting its revenue.

The longing rumour in town that Apple will be buying Walt Disney Co. is not new. In fact, it travels back to 2006 when Disney acquired Pixar. This made Late Steve Jobs, Pixars’s Co-founder, one of the largest shareholders of Disney and also had an entry as a member into its board. The rumours hovered for around for 15 years before it and got a new birth when former Disney CEO Bob Iger in his autobiography, “The Ride of a Lifetime: Lessons learned from 15 Years as CEO of the Walt Disney Company” noted that if Jobs would not have died in 2011, A Disney and Apple merger would have happened. “I believe that if Steve were still alive, we would have combined our companies, or at least discussed the possibility very seriously,” Iger wrote. A consolidation of Apple and Disney would have required the consent of the Board and the investors of the two organizations which could pose a bit of a hurdle as Jobs had a 7.4% stake in Disney after selling Pixar. At the point when giant corporations consolidate, questions concerning as to what all ramifications will be of such dealings on to the customers promptly start to whirl.

Why is the Apple-Disney rumour in the market these days?

This rumour is again surfacing the town as the crashing stock market and the wave of uncertainty has hit rock bottom due to the coronavirus pandemic all across the globe. And if Apple is serious about merging with Disney it should do it at a negotiating price and hence, devise the same as a winning plan. Disney’s Asian parks were shut for a large part of the long stretches of 2020 and 2021, and that has assisted with pushing Disney’s stock prices down to roughly 35% up until now. This presents a superb chance for Apple to expand its Apple TV web-based streaming feature by procuring Disney and its competitor Disney streaming service.

As a new contestant to the streaming conflicts, Apple TV has up to this point attempted to have unique and original content in its platform to remain in the game. The market’s present unpredictability could play to the upside of uber cap organizations with humongous cash balances and whose equity outflanked Disney. Apple is in an especially solid situation for that sort of obtaining, first and foremost due to the general underperformance of Apple TV+ up until now and furthermore in light of the fact that the computer giant as of now reports about $107 billion in cash and securities that it possesses. Disney as of now is one of the world’s most important brands, even though its stock prices are bearish right now and no tenable source on Earth believes that the economic slump will stop the organization. So it appears to be improbable that Disney would consent to obtain at fire-deal pricing.

The aftermath of the merger if it were to take place

It would be interesting to see the dream deal between Apple and Disney materialise. Purchasing Disney would make Apple perhaps the biggest proprietor of cable networks in addition to a significant transmission network in ABC. However, the issue is that the advantages of a merger between Apple and Disney could be acquired by cooperating and working together but it is likely that it wouldn’t fundamentally increase the value of either of the companies enough to justify mergers to its shareholders. That load of moving parts would confound.

Apple’s centre business, which principally centres on selling equipment and securing clients via different policies and across different continents. Assuming control over Disney’s organizations, alongside its higher obligation and working costs, would choke Apple’s free cash flow and its potential to raise dividends or buy back its shares. The expenses will be excessively high, and the merger would be muddled and intricate. Apple would likewise be taking on Disney’s rising content creation costs. The kind of money that Disney spends on its streaming content is worth noting: $1 billion in 2019, and anticipates that that number would ascend to $2.5 billion by the year 2024. Apple would likewise have to adjust the financial plans of Disney’s gigantic film and media habitat, just as the extension expenses of its amusement parks and resorts. However, Apple wouldn’t want to miss this splendid opportunity of expanding the demographic user base, conditioned to the availability of fresh content that it could procure from the merger with Disney.

A merger would fortify the two companies, giving Disney better distribution access across the globe for its fresh content as customers increasingly go to their cell phones to watch the same, while Apple could construct the Internet-based video service it has for a long time looking for. The joint success of the Disney and Fox libraries on pre-setup streamers Disney and Hulu/Star would permit Apple to scrap the disappointing trial that is Apple TV. It could then use Disney’s current client base trial (that is more than 150 million subscribers across the globe) and worldwide reach and vice-versa.

Post-merger acquisition

Purchasing Disney would likewise mark a take-off from Apple’s music strategy, weaken its capacity to be an all-inclusive resource for all kinds of content and send an implied message about the growth and development of its iPhone business.

It would likewise have a huge balance sheet and the specialized capacity to pursue the transmission rights for different sports and other live events; Apple innovation could likewise be incorporated into Disney amusement parks. With the knowledge of Disney’s major M&A transaction, it is observed that Disney merges and acquires its competitors to get access to more intellectual property in terms of media contents including films, TV Series, and animations, whereas it expands these original or acquired content vertically as Disney monetized different contents into consumer products, parades in theme parks and even reproduce the original content.

If this merger would turn successful, Disney would be able to expand its film category which can be delivered to the subscribers of Apple. M&A is the fastest way of acquiring intelligence property, especially if the target is rich in content. Acquiring the media content giant directly is without a doubt more effective than securing a portion of its movies, as known as an establishment. The possibilities for the theorized arrangement would get amplified if the U.S. concurs on a policy of tax reform that sanctions allowing global giant organizations like Apple to bring back overseas benefits all the more effortlessly. Apple has more than $200 billion in cash flow outside of the United States that it at present can’t localize without paying a 35% duty rate.

Conclusion

It can be seen that probably Apple and Disney are a mismatched couple. Both of their working and service ecosystems are different. While the consumers of Apple are roped in because of the external services that it provides like iCloud, iTunes, iPhone, iPad, the App Store, and so on. Whereas Disney on the other hand, takes a different approach, i.e. it has the potential to generate revenue via the success of a hit movie or show or even from a popular thematic park. This merger would not help Apple in increasing its revenue from the services that Disney offers. However, Apple would definitely benefit from the content that is owned by Disney on its streaming platform. Disney’s content business would help Apple to raise a notch higher over its competitors thriving in the market.

References

[1]https://www.barrons.com/articles/apple-disney-merge-bob-iger-steve-jobs-streaming-video-51568901495

[2]https://finance.yahoo.com/news/wall-street-dreams-apple-disney-140103851.html

[3]https://variety.com/2019/digital/news/disney-apple-merger-bob-iger-steve-jobs-1203341956/

[4]https://www.pymnts.com/news/partnerships-acquisitions/2020/apple-disney-happiest-acquisition-on-earth/

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All you need to know about independent film actors contracts

By

Abanti Bose

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August 25, 2021

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This article is written by Ayush Sahay, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.

Table of Contents

Introduction

When people talk about the entertainment industry, they all think that it is all a show and no worries, but many times we forget to add multiple other aspects that come together in order for us to enjoy a particular, say movie or series. Many times production houses trick actors into entering into a contract, either by subjecting them to an extraordinary time constraint or other methods up their sleeve. One such instance is in the case of Sylvester Stallone v. DEM Productions and FM Entertainment. In this case, Sylvester had made a small cameo in the 1997 movie “The Good Life” which actually starred his brother Frank Stallone. Sylvester accused that the promotion of the film was done in such a way that it showed that Sylvester had a starring role, suing them for $20 million for breaching the contract. There was a countersuit filed by the producers where they stated that the brothers had breached their contract and had tried taking over the working of the film and they sought $50 million in damages. The final result of this case though after being dragged in the court for not quite long, resulted in both these parties settling.

Now that we understand the importance of a contract in the work-life of an actor, we will proceed to understand the various provisions and other details of such contracts.

What is an independent film actor contract?

An independent film contract is an agreement signed by an actor and a production house that is casting/hiring the actor for a particular role in a film.

But what is the difference between an independent film and a mainstream film? As any movie buff would tell you that the term “mainstream film” refers to films that are widely distributed in theatres having the backing of huge production houses whereas, “independent films” or indie films are films made outside of a big studio that is defined by the director’s choice of style and creative presentation. A major example in Bollywood of both these segments of movies would be ‘The Extraordinary Journey of the Fakir’ in the segment of indie films and ‘Dhoom’ Franchise in the segment of mainstream films.

Since these films are not backed by huge production houses, a lot is at stake here for the actor, including their pay. Hence actors sign these contracts that bind both the parties, the production house involved and themselves with the hours of the shoot, amenities to be provided, sorting travel expenses, mode and procedure of payment, etc. along with every other clause outlined in the agreement.

What are a few clauses to look out for in this contract?

Compensation rates

This clause will specify the details about the method in which the actor will be paid, i.e. if they will be paid on an hourly basis or a flat rate or a percentage of the income out of the film made and released.

Term of employment

This clause will identify the time frames under which the actor will be obligated to work for the production house. These time frames may include, start and end dates, pre-set dates, etc.

Is the contract exclusive

This clause should mention whether the actor’s right to take part or engage with any other employer has been limited or not. This depends on the various aspects including trying to make the actor seem exclusive for time being, hence trying to increase their public appearances worth, etc.

Merchandising

In today’s easy to buy economy, if the public likes something they want something that is associated with it, to be with them. This makes merchandising a huge market for any production house. This clause will detail whether the production house will be involved in the merchandising business in relation to the film being made, and in case it is what percentage of the proceeds will be received by the actor.

Promotion and publicity

An actor’s job is not limited to just acting in the film, but extends to promotion and publicity which requires them to appear on shows and interviews for the same. This clause clarifies whose responsibility it is to manage all the programs related to promotion and publicity and whether a 3rd party company will be hired for the same purpose.

Public liability insurance

Since not every shoot is done inside a room with proper fire hazard safety set-ups, it is necessary for the production house to the state under this clause whether they have obtained public liability insurance to cover the actors under this insurance in case of any accidents arising at the set where the shoot is taking place.

Food and refreshments

Shoots go on for the entire day and sometimes for more than 24 hours. Hence this clause clears the ambiguity of whether the sets where the shoot will take place will have the necessary arrangements for food and refreshments for the actors present there.

Travel expenses

This clause clarifies whether the actor will be given a travel allowance or if there will be some other arrangement made for the travel of the actor to sets and locations as required for the film.

Wardrobe

This clause clarifies if the actor is supposed to bring in their own clothing or spend their own money to buy clothes as required for the shoot or will the production house make necessary arrangements for the clothing.

Benefits

This clause mentions any and all incentives or benefits that will be given to the actor on signing this contract. This benefit could include a number of free tickets for the premiere of the film, merchandise, or copy of the film, etc.

Remedial clause

This clause contains information regarding what constitutes a breach of the contract and in case it does what are the remedies available to the parties involved.

What if there is a breach in this contract?

Usually, in case of a breach in the contract, damages are paid to the party that has incurred losses. In case of an independent film actor’s contract, fines or deduction in payment could be levied on the actors for repeated breach in the case they are not on time as per the time duration agreed to in the contract and in case there is a major breach the entire contract could be terminated making the actor liable to pay a specific amount to the production house for such breach.

In cases such breach is done by the production house, the actor should be made responsible to bring it to the attention of the production house and solve the same amicably, but in case the production house breaches the entire contract then they shall be liable to pay the actor for what the contract is worth along with any reasonable damages claimed by the actor.

Implications of not getting into the agreement

The entertainment industry has a long history of exploiting its resources, be it the acting industry, the music industry or another industry under the entertainment industry. The actors, artists and creators are often undervalued and are not given the opportunity to consult a legal professional regarding the contracts that are presented to them thus, allowing for the production houses to have an upper hand.

But because we are discussing indie films in this article, we must consider the fact that no party involved in the filmmaking here is big and loaded with money but this doesn’t deny the fact that there still could be an opportunity where an actor’s value is being undervalued and they are not at a place of advantage. In totality, not getting into a written agreement but an oral one has its own set of problems along with the already existing set of problems oral agreements bring in.

It allows for loopholes to be present in the employment between the actor and the production house, where one day either might just pull the plug from their side leading for the entire project to hit pause and for it to come back on track might take more time than expected, which would essentially lead to loss of other members involved in the process of filmmaking too.

Relevant examples

In the very recent case where Scarlett Johansson has decided to take on Disney for a breach of contract. Scarlett’s salary is based on the box-office performance and she was assured by Dave Galluzzi, Marvel’s Chief Counsel that the movie is set to be released in theatres and not on OTT platforms. He has also confirmed that in case there were to be any changes regarding the release of the movie, that same would be consulted with her and her team. But Disney decided to release the movie ‘Black Widow’ over their OTT platform, which caused Scarlett’s salary to be shortened by almost 50 million USD.

Though Disney’s spokesperson states that these are baseless allegations and not the right way to move forward in the unprecedented times of a pandemic, Scarlett’s attorney, John Berlinski says that Disney wants to hide under the pretext of “a pandemic” while trying to increase the stock price of the company by increasing the number of subscribers.

Conclusion

The pressure that actors go through when being made to sign a deal is extremely overwhelming for them and many times they often fall into the traps and are under-compensated and overworked. Therefore it is important to make sure that in this show business, everything that you agree upon with the other party is taken in writing. The clauses as mentioned above must be ensured by an actor to be free from any ambiguity since they are important for them while signing a contract. We have also seen in the cases mentioned above how contracts and a few specific clauses come in handy when either of the parties is aggrieved and sues the other to being compensated for the damages that have been incurred by them due to the mismanagement of the other party.

References

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International water and jurisdiction of states over them

By

Bushra Tungekar

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August 24, 2021

0

PubBackGEFIntWater (1) — image source-https://rb.gy/srawxj

This article is written by Udita Prakash, a student at UPES, Dehradun pursuing BBA LLB(Hons.). This article talks about International water boundaries and the jurisdiction of States over them.

Table of Contents

Introduction

The freedom to use the world’s international waters is one of the oldest standards in international law. However, the freedom of the seas has been threatened since the time of Grotius. Specifically, the blessing of the regions where this precept is implemented began with the First United Nations Conference on the Law of the Sea in the 1950s.

The predominant factor in this decrease in freedom is because of the coastal countries that seek to exercise manipulations on maritime regions and resources. The end result of the termination is a usurpation of the freedom of movement of goods, offerings, and people, which in the long run interferes with the freedom of navigation.

Frequently, the coastal states claim to exercise their jurisdiction over overseas vessels in regions having a baseline of the ocean. Coastal countries try to disrupt the mineral and coal-rich hotspots in those areas by imposing price lists on foreign ships and flirting with the idea of extraterritoriality. Over the years, the coastal countries have received additional power over a growing ocean neighbourhood.

Since 1982, the ocean has had a charter that now regulates the rights and obligations of the coastal states no longer in force, but also the ships that sail within the exclusive maritime zones. The United Nations Convention on the Law of the Sea (UNCLOS) presents the sovereign rights of coastal states in various marine areas in exclusive regions of the ocean. These areas are:

internal waters;
territorial sea;
contiguous vicinity;
one of a kind financial zone; and
the excessive seas.

It additionally offers coastal states extra or much less jurisdiction over overseas vessels based on wherein the vessel is located.

Internal water

Internal waters are assimilated to terrestrial territory and the coastal State can revel in complete and exceptional sovereignty over them. An overseas delivery, positioned in inland waters, is a situation to the legislative, administrative, judicial, and jurisdictional powers of the coastal State with regard to any illegal act devoted on board or ashore via means of individuals of the crew.

The coastal State must no longer allow harmless passage in addition to immediate baselines “as inland water regions that have previously no longer been considered as such. Under those circumstances, there could be harmless passage of property such as is supplied in the [UNCLOS] through one’s waters.

Jurisdiction over foreign merchant vessels

The coastal State has civil jurisdiction over overseas service provider ships. Specifically, overseas service provider vessels are difficult to the coastal State’s navigation guidelines and its sanitary, fiscal, technical, and customs controls, which may be applied with no discrimination among vessels. However, while a dispute arises among group members about their nationality, the coastal State now no longer typically asserts its jurisdiction.

Regarding criminal jurisdiction, the coastal State has different jurisdiction over illegal acts driven onboard overseas service provider ships placed inside its inner waters. It may additionally intrude on the request of the captain of the vessel or the flag of the State.

The coastal State also can implement its rules while its doggin is compromised, while the crime influences its peace and true order or while its protection is at stake. However, overseas vessels are not difficult to bring under the jurisdiction of the coastal State.

Jurisdiction over foreign warships

Overseas warships, such as authority vessels used for non-industrial purposes, are exempt from the coastal State’s civil jurisdiction because of the precept of sovereign immunity.

This immunity, consistent with UNCLOS Article 32, is a challenge to the conduct of the vessel that has to abstain from any antagonistic mindset or act of violence. Should a vessel engage in such acts, the coastal State may have a right to self-defence. Thus, the coastal State will now no longer interfere in topics solely concerning crewmembers of a warship, or while the offence is committed onboard the vessel.

But, it’ll be completely capable if neither the perpetrator nor the sufferer is a crewmember. In the same way, the coastal State does not have jurisdiction in acts through officials or crew executed as State merchants. When an act is committed inside the behaviour of public affairs, the coastal State can also additionally continue and make an arrest, however, it has to supply the perpetrator to the captain on the request of the party.

On the other hand, if the facts are not related to the conduct of public affairs, the injured facts can sue before the courts of the coastal State. Immunities can even defend warships against seizure, arrest or detention of the ship and the people on board (the police or the customs government have no right to board), in cases of collision.

The territorial sea

According to UNCLOS, the physical activities of the coastal State are fully competent within the territorial sea, however, positive concessions. The biggest mess of this sovereignty is the harmless passage of ships from overseas, whether or not they are personal or military. This standard precept can be found in Article 17 of UNCLOS, which establishes that ships of all States, whether or not they are coastal or landlocked, experience the right to pass harmlessly through the territorial sea.

Innocent passage

UNCLOS Article 18 defines “passage” as navigation through the territorial sea without coming into the inner waters of the coastal State or for the motive of coming into or leaving the inner waters, with the circumstance that the passage is non-stop and expeditious, keep in instances incidental to navigation, of force majeure, distress, or for rendering help to different vessels. UNCLOS defines “innocent passage” in Article 19(1) as “innocent so long as it is not prejudicial to the peace, good order or security of the coastal State.”

Warship

The flag State can be held liable for warships, consisting of authority ships operated for non-industrial purposes, if the coastal State suffers any loss or damage of any nature, as a result of such ships due to non-compliance with the guidelines laws and regulations of the coastal State, provisions of UNCLOS or different regulations of global law. If a warship is required to conform to the rules and does not behave as directed, the coastal State may also require it to leave its territorial sea immediately and may exert any significant pressure to compel it to do so. In any case, the flag State may be liable for damage caused by a warship or any other authority vessel operated for non-industrial purposes, in accordance with Article 31 of the United Nations Convention on the Law of the Sea.

Contiguous zone

The idea of the contiguous sector seems obsolete. It is worth mentioning that the contiguous sector is part of the differentiated financial sector (EEZ) and, consequently, of the seas where the freedom of navigation precept is applied. Therefore, in its contiguous sector, the coastal State no longer works sovereignty, however as a handiest substitute it has specialized powers. According to UNCLOS Article 33,and, UNCLOS Article 303(2), “to govern visitors in historic and archaeological instruments, the coastal State may also presume that the elimination of such gadgets from the contiguous sector without the State’s consent could violate the legal guidelines referred to in [UNCLOS] Article 33, and the State may also act accordingly.” In addition, due to the fact the contiguous sector is part of the EEZ, the coastal State will even have all of the rights and duties, without exception, that pertains to the EEZ.

Exclusive economic zone (EEZ)

The Exclusive Economic Zone extends from the end of 12 nautical miles from the baseline that is the territorial sea to 200 nautical miles from the baseline. Foreign ships can trade, lay cables as long as they do not damage the state of the sea. The coastal State has rights of exploration, use and conservation, management and exploitation on the seabed and the subsoil for this EEZ.

Rights of coastal states in its EEZ

In accordance with Article 56 (1) of the United Nations Convention on the Law of the Sea, the coastal State has more effective sovereign rights by reason of exploring, exploiting, conserving and caring for herbal resources, whether or not they are habitable, from the waters overlying the seabed and from the seabed and its subsoil, and in reference to different sports for the financial exploitation and exploration of the area, consisting of the manufacture of electrical energy from water, currents and winds.

Article 56 of UNCLOS also provides jurisdiction to the coastal State in relation to islands and synthetic facilities, marine medical research, and the safety and protection of the marine environment. However, the coastal State, in order to exercise its rights, must take due account of the rights of the different States within the EEZ.

In summary, we can say that the EEZ created through Article 56 of the UNCLOS grants the coastal State an extraordinary jurisdiction over the financial use of the 188 miles located offshore of the territorial sea, where fishing is of the utmost importance.

Rights of foreign states in EEZ

The Foreign States also are given rights concerning navigation and non-financial uses of the EEZ. According to UNCLOS Article 58, overseas States experience a number of freedoms of the EEZ seas as stated in the article. Those freedoms are:

navigation;
overflight;
the laying of submarine cables and pipelines; and
Different countries around the world make the use of the ocean legally associated with one’s freedoms.

This offers the different States the opportunity to interact in non-financial places within the EEZ. The different freedoms indexed in Article 87 are not included in Article 58 because these places are reserved only for the coastal State. These freedoms consist of:

the liberty to assemble synthetic islands and different installations;
fishing; and
marine medical research.

Residual rights

This brings up the query of residual rights and to whom they must belong. UNCLOS no longer delivers a clean solution to the residual right. However, as an alternative solution, if war arises between a coastal State and an overseas State, it “must be resolved on the idea of fairness and in all of the applicable circumstances, thinking of the respective significance of the concerned to the events in addition to the worldwide network as a whole.”

In any case, an overseas State and its vessels need to have due regard for the rights of the coastal State in exercising its very own rights and freedoms and must observe the legal guidelines and policies of the coastal State followed according to UNCLOS and international law.

Rights and duties of a state in freedom of navigation & nationality of ships

The freedom of navigation is the oldest of the freedom of the Exclusive Economic Zone (EEZ) seas and cannot be impaired with UNCLOS and worldwide law. As UNCLOS Article 90 provides “each State, whether or not coastal or land-locked, should have a set of regulations to sail ships that are flying its flag at the EEZ seas.” The underlying outcome of Article 90 is that a flag State has one-of-a-kind jurisdiction over the vessels that fly its flag. Similarly, it can also be seen from Article 90 read with Article 92, that every vessel ought to have the simplest one nationality which also helps in the identification of the vessel. Moreover, each State has the power to decide how it will give recognition to a vessel. Flag States have numerous obligations mentioned in UNCLOS Article 94 in addition to which the warships and the authority vessels that are used for non-industrial providers have entire immunity at the EEZ seas. Furthermore, in Article 97, we can also see that if there is a penal obligation of a crew member then the flag State or the state of which the accountable individual belongs can institute proceedings. Specifically, Article 97 states that “no arrest or detention of the vessel shall be ordered, while there is a certain degree of investigation, with the help of any government other than the flag State.”

Right to visit and right of hot pursuit

In accordance with Article 110 of the United Nations Convention on the Law of the Sea, a warship, or “any other aircraft or delivery aircraft duly legally marked and identifiable as in service of the authorities”, may also board a ship encounter in excessive seas or in the EEZ if one have reasonable grounds to suspect this type of vessel is engaged in piracy, the slave trade, unauthorized broadcasting, or if one have an economic suspicion that the vessel does not have nationality. This right to go gives a central authority vessel the authority to confirm the actual delivery to fly its flag by checking its files and, if suspicion persists, to similarly observe the delivery. However, if the suspicions are unfounded, the delivery must be compensated for any loss or damage, so prolonged because no act has already been devoted to justifying such suspicions. However, this right to visit cannot be exercised by means of a ship of the central authority of a State against warships and ships of authority of any other State, in accordance with its immunity established in articles 95 and 96 of theUNCLOS. In Article 111 (1) of the UNCLOS, the right of hot pursuit is granted to a State that has critical reasons for considering that the persecuted vessel has violated the legal guidelines and directives of the coastal State. The limits in the exercise of this right are that this type of persecution must be initiated while the overseas vessel is “in internal waters, archipelagic waters, territorial sea or the contiguous sector of the persecuting State”, and the persecution already does not need to be interrupted. In addition, the pursuit can begin in the most convenient way “after a visible or audible signal has been given to prevent at a distance that allows it to be visible or heard with the help of an overseas ship.” Another circumstance is that the right of hot pursuit can be more easily exercised with the help of warships or naval aircraft, “or different ships or aircraft certainly marked and identifiable as in authorized and certified aircraft carriers.” Adequate prosecution also applies to violations within the EEZ of the coastal State legal guidelines and directives relevant to this sector below UNCLOS.

Right of fisheries

In seas, beyond the EEZ, each vessel in each State has its own infinity to fish, as stated in Article 116 of the UNCLOS. However, it is by far identified that 90% of the resident sources of the oceans at this time are concentrated in areas concerned about the sovereignty of a coastal State. Consequently, the freedom to fish beyond these zones is of little real importance. ‘Furthermore, even fishing itself is a concern of existing treaties’, that is, the rights and responsibilities of coastal States under Articles 63 (2) and 117. Under Article 63 (2), the coastal State and the different States will make preparations regarding the essential measures to be taken in order to ensure the conservation of the quotas that are being carried out in the EEZ of the coastal or larger States, or in each of the EEZs and in a place past and adjacent to it. Articles 64 refer to the rights and responsibilities of the coastal State with reference to the exploitation and conservation of clearly migratory species, marine mammals, anadromous and catadromous species and their conservation. In addition, Article 117 of UNCLOS imposes on the States involved the obligation to cooperate and take measures for the control and conservation of organic sources relevant to their citizens. To do this, the State must cooperate and take into account the unique objectives of the coastal State. This can be achieved with the help or under the auspices of fisheries commissions around the world. Any degree of conservation followed in accordance with the UNCLOS must no longer discriminate, in form or in fact, against the nationals of any State. Finally, in excessive seas, UNCLOS is most effective for the jurisdiction of the flag State in relation to all sports of fishing in excessive seas carried out by vessels flying its flag. Therefore, coastal states cannot take enforcement action.

Conclusion

Throughout this note, it has been found that the coastal State has broad powers over the oceans and more specifically over its territorial sea. Even if the coastal state no longer has sovereignty over its EEZ, it nevertheless maintains the utmost importance for fisheries. With its proper legislation at various levels within single zones, the coastal State can impose an extraordinary burden on overseas vessels with the help of compelling them to comply with State guidelines.

We can also assert jurisdiction over offending vessels and transfer them before the courts. However, the historical precept of the freedom of the seas has no longer completely disappeared and the coastal states face some limits to their powers.

In fact, through this article we have seen that overseas vessels have the right to lose navigation in excessive seas, such as the EEZ and the contiguous area. However, they must appreciate the coastal State guidelines in those unique areas. Foreign vessels even have a harmless right of passage within the territorial sea, as long as they are in accordance with the duly published regulation of the coastal State, this is authorized by UNCLOS.

References

https://www.biologydiscussion.com/essay/nation-and-international-river-water-disputes/2465

https://sites.tufts.edu/lawofthesea/chapter-two/

https://www.britannica.com/topic/territorial-waters

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The UN Convention against transnational organized crime

By

Sneha Mahawar

-

August 24, 2021

0

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This article is written by Sahaja, from NALSAR University of Law, Hyderabad. The article gives an exhaustive description of the UN Convention Against Transnational Organized Crime.

Table of Contents

Introduction

Transnational Organized Crime is organised crime that is coordinated across national borders, involving groups or marketplaces of individuals who plan and execute unlawful economic endeavours in more than one country. These criminal organizations employ systematic violence and corruption to attain their objectives. Drug trafficking, arms trafficking, sex trafficking, toxic waste disposal, materials theft, and poaching are all examples of transnational organized crime.

The United Nations Convention against Transnational Organized Crime (UNTOC, often known as the Palermo Convention) is a multinational treaty against transnational organized crime that was established by the United Nations in 2000.

Background

The United Nations Convention against Transnational Organized Crime, which was enacted by the General Assembly in Resolution 55/25 on November 15, 2000, is the most important international tool in the battle against transnational organized crime. It was signed by the Member States at a High-level Political Conference held in Palermo, Italy, on December 12-15, 2000, and came into force on September 29, 2003.

The convention’s framers recognized the threat that organized crime poses to security, sovereignty, human rights, and development. Within the political space open to them, they collaborated to develop a new response to those dangers. The widespread trafficking and violence associated with illegal narcotics was a quickly escalating issue. The United Nations quickly understood that it required a robust body to tackle illicit drug trafficking. As a result, in 1977, the United Nations Office on Drugs and Crime (UNODC) was formed by merging the UNTOC with the UNODC.

Fighting organized crime and terrorism was previously (before the Convention came into effect) considered by most countries as a domestic and individual responsibility. The growing rate of threats, crimes and transnational aggression, pushed the way forward to establishing the UNTOC. The UNTOC made countries around the world aware that transnational crime and aggression can only be faced and fought against through coordination, cooperation and a fixed set of guidelines.

The Protocol to Prevent, Suppress, and Punish Human Trafficking, Especially of Women and Children, was adopted by the United Nations General Assembly in Resolution 55/25. It came into effect on December 25, 2003. It is the first legally enforceable worldwide agreement with an agreed-upon definition of human trafficking.

The Protocol Against Migrant Smuggling by Land, Sea, and Air, which was enacted by the United Nations General Assembly in resolution 55/25, came into effect on January 28, 2004. It addresses the rising problem of organized criminal gangs smuggling migrants, often at tremendous risk to the migrants and great profit to the criminals.

The Protocol against Illicit Manufacturing and Trafficking in Firearms, Parts and Components, and Ammunition was adopted by the United Nations General Assembly on May 31, 2001, with resolution 55/255.

The UNTOC reinforced its restrictions on wildlife smuggling in 2014. In 2017, as Japan prepared to host the 2019 Rugby World Cup, as well as the 2020 Summer Olympics and Paralympics, it discovered that it was not entirely in compliance with the UNTOC, putting its eligibility to host those games in jeopardy.

Protocols of the Convention

The Convention is a significant step forward in the fight against transnational organized crime, as it demonstrates Member States’ acknowledgement of the importance of the issues it raises, as well as the necessity to encourage and expand close international collaboration to address those issues. States who ratify this treaty agree to take a number of steps to combat transnational organized crime, including the development of domestic criminal offences and the adoption of new and broad extradition mechanisms. The States also need to ensure mutual legal assistance, legal enforcement, and the promotion of training and technical assistance for building or upgrading the necessary capacity of national authorities. The depositary of the Convention is the Secretary-General of the United Nations.

The UNTOC has three supplementary protocols (Palermo protocols) namely:

Protocol to Prevent, Suppress and Punish Trafficking in Persons, especially Women and Children.
Protocol against the Smuggling of Migrants by Land, Sea, and Air.
Protocol against Illicit Manufacturing and Trafficking in Firearms.

The UNTOC is the main legal international instrument to fight organized crime, but its efficiency depends on each member’s ability to implement the organization’s framework.

Protocol to prevent, suppress and punish trafficking of women and children

The United Nations General Assembly enacted the Protocol to Prevent, Suppress, and Punish Trafficking in Persons, especially Women and Children (also known as the Trafficking Protocol or UN TIP Protocol) in 2000, and it went into effect on December 25, 2003.
It is the first legally enforceable worldwide agreement with an agreed-upon definition of human trafficking.
The goal of this definition is to facilitate national approaches to the formation of domestic criminal offences that will support effective international cooperation in investigating and prosecuting cases of human trafficking. Another goal of the Protocol is to protect and assist victims of human trafficking while also respecting their human rights.
The protocol will be implemented by the United Nations Office on Drugs and Crime (UNODC). It assists states with formulating laws, developing comprehensive national anti-trafficking policies, and providing resources to put them in place.
The UNODC started the Blue Heart Campaign in March 2009 to combat human trafficking, promote awareness, encourage participation, and inspire action.
The protocol binds ratifying governments to prevent and combat human trafficking, to protect and help victims of trafficking, and to promote international cooperation in order to achieve these goals.

Protocol against the smuggling of migrants by land, sea, and air

In 2000, the United Nations General Assembly passed the Protocol against the Smuggling of Migrants by Land, Sea, and Air, which supplements the Convention against Transnational Organized Crime. It is also called the Smuggling Protocol.
It addresses the rising problem of organized criminal gangs smuggling migrants, who are often a tremendous risk to the migrants and the migrants act as a great profit to the criminals. A notable accomplishment of the Protocol was the development and agreement on a definition of migrant smuggling for the first time in a global intergovernmental treaty.
The Protocol strives to prevent and combat migrant smuggling, as well as promote collaboration among States Parties, all while safeguarding the rights of smuggled migrants and preventing the worst forms of exploitation that are common in the smuggling process.
States Parties who have ratified the Protocol must ensure that migrant smuggling (also known as people smuggling) is criminalized in conformity with the Protocol’s requirements and those of the Convention on Transnational Organized Crime.
People smuggling, unlike human trafficking, is defined by buyer and smuggler permission – a contractual transaction that normally ends upon arrival at the destination site. Smuggling scenarios can, however, devolve into conditions that are best defined as severe human rights violations, with smuggled people facing intimidation, abuse, exploitation, torture, and even death at the hands of smugglers.
The International Organization for Migration (IOM) welcomed this protocol of the Palermo Convention a month after it was adopted. The IOM has taken particular note of the Protocol’s emphasis on the need to treat migrants humanely and the necessity for comprehensive international methods to fighting smuggling, including socio-economic measures that address the core causes of migration. Many of the IOM’s actions have played a significant role in implementing the protocol.

Protocol against the illicit manufacturing and trafficking of firearms

The Firearms Protocol (Protocol against Illicit Manufacturing and Trafficking in Firearms, their Parts and Components, and Ammunition) is an anti-arms trafficking pact that includes Small Arms and Light Weapons. The General Assembly approved this protocol on May 31, 2001, and it went into effect on July 3, 2005.

The Protocol’s goal is to promote, facilitate, and strengthen cooperation among States Parties in order to prevent, combat, and eradicate the illicit manufacture and trafficking of firearms, their parts and components, and ammunition. It is the first legally binding instrument on small arms to be adopted at the global level.

States commit to adopting a range of crime-control measures and implementing three sets of normative requirements in their domestic legal order by ratifying the Protocol. These three normative requirements that the ratifying States will implement are:

Based on the Protocol’s standards and definitions, the creation of criminal charges relating to the illicit manufacture and trafficking of guns.
According to the convention’s requirements, a system of government authorizations or licensing would be established to ensure the legal manufacture and trafficking of firearms.
The firearms will be marked and tracked by each Member State to the protocol.

Signatories

The people, organizations, or countries that have signed an official document are known as signatories. The term “signatory” refers to a country that supports the convention politically and is willing to participate in the treaty-making process. This intention is expressed in a “signature” submitted to the treaty’s qualifying international body or the authoritative authority designated by the convention. A State that expresses its explicit assent to be bound by a treaty is referred to as a “party.” This explicit assent is usually expressed in the form of a ratification, acceptance, approval, or accession instrument.

India signed the UN Convention against Transnational Organized Crime (UNTOC) and its three Protocols on December 12, 2002. States intending to sign the protocols must first become signatories of the UNTOC Convention and then sign the protocol of their choice. A member of the Convention does not make the member an ex-facto signator of the three protocols that supplement the Convention.

The UNTOC has a total of 147 signatories and 190 parties to the convention. The UN TIP Protocol has a total of 117 signatories and 178 parties. The Smuggling Protocol has 112 signatories and 150 parties. The Firearms protocol has 52 signatories and 120 parties to it.

Conference of parties

A Conference of the Parties to the United Nations Convention against Transnational Organized Crime was established in accordance with Article 32 of the Convention to improve the capacity of States Parties to combat transnational organized crime and to promote and review the Convention’s implementation. Within the United Nations, it is the most comprehensive body dealing with transnational organized crime. The existence of working groups designed to deal with specific topics connected to the Convention or its protocols is one of the Conference’s most distinguishing elements.

A variety of observers, including signatories and non-signatories, the United Nations Secretariat, international organizations, and non-governmental organizations, attend the conference in addition to the States parties, who are the actual participants. Five Working Groups were formed by the Conference of the Parties to focus on distinct aspects of its work. The groups are Firearms, Smuggling of Migrants, Trafficking in Persons, Technical Assistance, and International Cooperation.

At its ninth session, held on the 15th and 19th of October 2018, the Conference of the Parties to the UNTOC established a review mechanism for the implementation of the UNTOC and its Protocols. The UNTOC Review Mechanism is a peer-review procedure that will enable States Parties to the Convention and Protocols on implementing these instruments effectively, as well as identify and substantiate specific technical assistance needs and foster international cooperation.

Conclusion

The tale of how the UNTOC was negotiated is one of triumph against adversity. The necessity to combat organized crime was elevated to the top of the worldwide political agenda, and tangible actions were implemented as a result of the efforts of individuals engaged. It undoubtedly established a framework of legal measures that have been incorporated into national legislation, as well as international cooperation provisions that have been used to pursue organized crime figures.

The UNTOC is a vast, inventive, and forward-thinking legal document that includes provisions for video testimony for witnesses, long before the COVID crisis prompted widespread usage of video conferencing. It’s adaptable enough to new and evolving crimes, as well as criminal gang behaviour. The three additional Protocols have also raised the profile of the concerns and enhanced international efforts to combat them, particularly in the case of human trafficking. However, sufficient comprehensive information has not been gathered or analysed in this regard.

Over the last two decades, transnational organized crime has emerged as a major threat to global security, with clear ties to international terrorism. In light of this, India attaches considerable importance to the Convention and Protocols, hoping that their entrance into force will reflect worldwide resolve to combat the global and cross-border scourge of terrorism.

By taking this important step, the government has demonstrated its commitment to the Convention’s object and purpose, as well as our desire to join as Parties to this comprehensive global instrument that addresses a wide range of illegal activities, advocating international and national action to combat money laundering, illegal firearms sales, smuggling, and trafficking.

References

https://mea.gov.in/press-releases.htm dtl/12790/India+signs+the+UN+Convention+against+Transnational+OIndia signs the UN Convention against Transnational Organised Crime (UNTOC)rganised+Crime+UNTOC

https://www.unodc.org/unodc/en/organized-crime/intro/UNTOC.html

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Human rights abuse by subsidiaries and controlled supply chains to pierce the corporate veil

By

Rachit Garg

-

August 24, 2021

0

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This article is written by Saswata Tewari from the University of Petroleum and Energy Studies, Dehradun. This article explores the impact of multinational corporations in the exploitation of human rights, as well as the laws in place to combat them.

Table of Contents

Introduction

It is unlikely that any discussion of the corporate veil would be complete without mentioning the case of Salomon v. Salomon (1897), which established this idea. According to the facts, Salomon transferred his shoemaking business to a company called Salomon Ltd, which was formed by his family members. The transfer fee was paid to Salomon in the form of shares and debentures with a floating charge on the company’s assets. However, the company fell bankrupt within a year, and the liquidators attempted to cancel the debentures, but the company’s assets were inadequate to pay out the debentures. The creditors claimed that Salomon & Co. had no independent existence and that, as a one-person entity, Solomon is the sole one running the company according to his wishes. The House of Lords dismissed the charges, ruling that “after incorporation, Salomon and Co. Ltd was a different legal body entirely from its members, with its rights and duties.” It was made apparent that once a company is incorporated, it becomes a separate legal entity with different motivations and behaviour than its members and promoters.

This concept was widely recognized, and it was backed up by the courts in several cases. For instance, in the case of King v. Portus (1949)), it was expressly inferred that the corporation is a separate entity from its shareholders, who are not liable to creditors and do not own any stake in the company’s property. Sometimes the case was also utilized to prove the contrary like in the case of Apthorpe v. Schoenhofen Brewing Co (1899), where the Court of Appeal, despite an argument based on Solomon v. Solomon, concluded that the business conducted in New York was technically that of an English corporation due for the English company tax.

Even though the concept of the corporate veil has helped organizations trapped in unfavourable situations survive, there have been cases where it has had negative consequences for human rights. This principle has protected entities from personal liability for their actions in the company’s name and the company’s owner, shareholders, or other subsidiaries may have used the corporate veil to hide their wrongdoings and bad intentions. But as it is said that people catch up to the wrong things, officials and governments have since developed policies and organizations to combat the false use of the corporate veil.

The interrelation between the corporate veil and the human rights

To take advantage of legal and tax advantages, multinational corporations (MNCs) form parent-subsidiary partnerships. Using technical improvements, MNCs can now quickly expand their global footprint and profit margins by forming more subsidiaries. However, creating subsidiaries in other countries makes it more difficult for victims of corporate subsidiaries’ human rights violations to receive restitution from the parent company. As it is understood now, any well-established MNC’s corporate liability will be structured in such a way that whenever one of the firm’s agents violates any human rights, that agent will be held liable, and the liability risk will remain in the jurisdiction where the subsidiary is headquartered jurisdiction where the parent company is headquartered, rather than in the jurisdiction where the parent company is headquartered.

Now in terms of transnational trade, MNCs set up subsidiaries in developing nations to take advantage of lower labour costs. Hundreds of thousands of people, including children, are subjected to horrific human rights violations as employees in countries all over the world. Child labour and forced labour are two examples. Children have even been forced to labour in opium fields or dangerous jobs such as mine work, where they must mix lethal compounds like mercury with gold ore with their bare hands. As a result of such events, human beings lose their human rights, dignity, and natural status. Corporations, on the other hand, can easily avoid responsibility in such circumstances since plaintiffs are unable to sue the parent firm for the injury caused by the subsidiary company in their native country.

When a subsidiary of a corporation violates human rights or transnational human rights, the parent firm tries to absolve itself of responsibility by claiming to be a separate entity hidden behind the corporate veil. It’s important to remember, however, that no matter how far a subsidiary company is from its parent, it still has a lot of influence over its subsidiaries, including how they treat human rights. In these cases, the corporate veil must be pierced to reveal the individuals hiding behind the veil and exploiting their separate legal identities to commit unjust acts.

Business and human rights in India

Multinational corporations (MNCs) are not new to India, as India has a long history of attracting foreign investment. Companies have been formed to serve as subsidiaries of global corporations.

National norms

Being influenced by the common law, the Indian corporate law is regulated by the Ministry of Corporate Affairs (MCA) and the Company Law Board at the federal (Union) level (CLB). The MCA has the jurisdiction to investigate firms and impose penalties if they do not comply with the terms of the Companies Act 2013. Securities Exchange Board of India is in charge of the securities market, while the Foreign Exchange Management Act 1999 and the Reserve Bank of India are in charge of all FDI in India. Any corporation that participates in anticompetitive agreements can be sanctioned by the Competition Commission of India. It is vital to understand the laws that govern the day-to-day operations of these MNCs’ Indian subsidiaries.

India has also been known to ratify the following international conventions to advance human rights in the country:

Also, the Indian Constitution grants fundamental rights to all citizens. This includes:

Equality before law (Article 14 of the Indian Constitution)
Freedom of Speech and Expression (Article 19(a) of the Indian Constitution)
Right to Life (Article 21 of the Indian Constitution), and

The list could continue indefinitely. Only the government can be held accountable for these fundamental rights. Government corporations are considered the state, and as such, they can be penalised if they violate any of the fundamental rights guaranteed by the Constitution.

There are also some acts and regulations that are relevant to the subject of business and human rights in India, such as:

Protection of Human Rights Act, 1993
Consumer Protection Act, 1986
Competition Act, 2002
Special Economic Zones Act, 2005
Labour laws such as the Contract Labour (Regulation and Abolition) Act 1970, Minimum Wages Act 1948, Factories Act 1948
Environmental protection laws such as the Environment (Protection) Act 1986, Forest Rights Act 2006

International norms

The impact of business on society is both positive and negative. The country has profited from growth, prosperity, jobs, and infrastructure, but the legal system around human rights abuses has had negative consequences. Many frameworks have been designed to protect human rights in foreign nations, acknowledging the contradiction of corporations working in foreign countries and exploiting human rights.

John Ruggie was the UN Secretary-Special General’s Representative who created the “Protect, Respect, and Remedy” framework, which was produced between 2005 and 2011. The three pillars can be explained as:

Protect

The state must protect civil society against human rights violations by third parties and private businesses.

Respect

All companies should respect human rights in the world.

Remedy

The pillar of remedy ensures fair access to justice.

These three principles are also related to the UN framework, United Nations Guiding Principles on Business and Human Rights, which is relevant to MNCs all over the world. According to the Guiding Principles, corporate responsibilities to protect human rights are voluntary, and so should not be expected to be enforced through legal means. However, because the Guiding Standards’ requirements are more akin to societal expectations than moral obligations, national law would be required to protect such principles. But then the obligations within the Guiding Principles can be seen more like social expectations rather than moral obligations, it would be necessary to guarantee such principles by national law. The United Nations (UN) and the Organization for Economic Cooperation and Development (OECD) have produced cross-border laws that deserve special attention. These efforts are aimed at overcoming the barriers to obtaining judicial relief.

Businesses have a legal obligation to protect human rights wherever they do business. The main purpose of this framework is to enhance awareness among corporate executives about the potential and actual consequences of their actions. The government’s role to protect human rights must be separated from corporate social responsibility. Individuals and communities should be able to easily find answers to their challenges. Corporate social responsibility is a one-time project. Because the form of human rights violations can change depending on operations, time frames, and commercial ties, putting such ideas into practice is a fluid process. The three pillars of guiding principles are to protect, respect, and remedy. The three pillars highlight particular individual activities that can be taken to respect human rights in areas of government and corporate responsibility.

The Zero draft was recently drafted to control international human rights law, transnational corporations’ actions, and other commercial enterprises. The state has primary responsibility for promoting, respecting, protecting, and fulfilling human rights and fundamental freedoms, and states must protect third parties, including businesses, from human rights abuse on their territory or elsewhere under their jurisdiction or control, as well as guaranteeing respect for and implementation of international human rights treaties.

Remedy for the violation

The state’s obligation to protect human rights by regulating private sector activity is widely recognised, and it has now been incorporated into international human rights law. States are expected to take all reasonable measures, consistent with international law, to prevent private-sector behaviour that could lead to human rights breaches. International duty of the state shall be occupied where such violations occur which the state could not permit without imposing an irrational burden on such a state. Where a violation has occurred, the responsibility to protect includes a duty to provide access to remedies.

States’ extraterritorial human rights commitments, including the duty of states to instruct the corporations they have in place to influence, wherever those firms manoeuvre. In contrast to this position, UN treaty authorities have repeatedly said that nations should take steps to prevent human rights violations overseas by businesses that are governed by their laws or have their headquarters or principal place of business under their authority. In particular, the committee on economic, social, and cultural rights affirms that states parties should prevent third parties from violating the right in other countries if they are capable of manipulating these third parties through the use of legal or political means, following the United Nations Charter and applicable international law.

The corporate veil would also help to solve a problem with the guiding principles that haven’t been properly addressed. One of the driving concepts of corporate veil is the demand for human rights diligence as part of business responsibilities to respect human rights. However, it is unclear to what degree this criterion holds a business liable for ensuring that other corporate entities with which it has an investment link act in following human rights. In practice, however, victims of translational business corporate human rights abuses may face significant challenges if such a responsibility is not established.

The key principle for protecting people’s rights in industrial development is the establishment of mechanisms that ensure full and effective participation, as well as the communities’ “free and prior informed consent,” as happened in Jagatsinghpur, Orissa, where the Orissa government agreed with POSCO to allow an integrated steel plant, which was met with frequent protests. To get out of this dilemma, businesses and governments must recognise that the FPIC principle (free, prior, informed, and consent) is emerging as a technique for developing programmes.

Free – This implies no coercion, intimidation, or manipulation.
Prior – This implies that consent has been sought sufficiently in advance of any authorization or commencement of activities, and respect time requirements of the indigenous consultation.
Informed – This implies that information is provided that covers the nature, size, pace, reversibility, and scope of any proposed project.
Consent – This implies that consultation should be undertaken in good faith.

Case studies

Vedanta Sterlite Plant Issue (2013)

The facts of this case are that the Vedanta’s Sterlite copper plant’s foundation stone was placed in Tamil Nadu in 1994, and the Tamil Nadu Pollution Control Board (TNBC) awarded a licence to the steel plant for operation in 1996, without requiring an NoC from the Environmental Impact Assessment. Locals complained in 1998 that the steel plant’s smoke was causing headaches, coughing, and choking and that the groundwater was being poisoned with metals such as arsines, lead, selenium, cadmium, copper, and aluminium.

The factory was shut down in 1998 by a Madras High Court judgement for the reasons mentioned by the National Environmental Engineering Research Institute (NEERI). Unfortunately, NEERI once again gave Sterlite the green light to operate as previously. Residents of Tuticorin complained about harmful water discharge in 2005. As a result, the TNPCB issued a closure order in 2013 because Sterlite’s Sulphuric Acid Plant-1 emits roughly three times the legal levels of sulphur dioxide and operates without TNPCB renewal consents. However, the Tribunal declared the Tamil Nadu government’s ruling unlawful, reduced a minimum penalty of 100 crores and cleared them to operate.

The TNPCB issued a notice in 2016 for dumping copper slag in the Upper River in Tamil Nadu, resulting in water pollution. Again a second unit in the factory was developed for expansion in 2018. Residents staged massive rallies near the factory, and protestors hurried to the collector’s office in search of justice. As a result of violent incidents, police opened fire on unarmed civilians, killing 12 individuals and injuring 90 others.

The Supreme Court of India overturned an NGT judgement authorising the reopening of the Sterlite facility in Thoothukudi on February 18, 2019. The tribunal lacked authority to hear the plant’s owner, Vedanta, appeal against the shutdown, according to a bench led by Justice Rohinton Nariman. Justice Nariman granted the Tamil Nadu government’s appeal against the National Green Tribunal verdict, allowing Vedanta to seek temporary relief from the Madras High Court.

The case of Plachimada (2003)

In this case, the Coca-Cola company agreed with an agreement with the Karnataka State Pollution Control Board (KSPCB) to commercialize up to 1.5 million litres of water from six borewells located within the industrial property. Coca-cola was permitted to extract groundwater to fulfil its production demands of 3.8 litres of water for every litre of Coca-Cola. As a result, the water table dropped and the quality of groundwater in the area deteriorated. A comprehensive study of the water found a high concentration of calcium and magnesium ions. Furthermore, the colloidal slurry produced as a byproduct was marketed as fertiliser to villages, in which unsafe quantities of toxic metals and the known carcinogen cadmium were discovered. As a result of everything, local people’s health has been jeopardized, and the farming business in the area has been destroyed.

Conclusion

In today’s busy world, companies have to look out for and safeguard human rights at all costs. The rate at which human rights are getting violated has reached such a high level that they are in the ambit of getting compensated. Companies are making huge profits at the expense of innocent people’s rights and the deterioration of the environment. Developing the business is good but it cannot be at the cost of human life. It is the need of the hour for the corporations to take serious commitment towards corporate social responsibility and companies which are in default of breaking their obligations to corporate social responsibility should be held accountable. However, the final ball lies in the court of the Government as it is their responsibility to take adequate steps following international law while taking disciplinary actions against the companies that violate human rights at the time of incorporation as it is always better to stop it before it gets too late.

References

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Does the development of a country depend on the protection of human rights

By

Rachit Garg

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August 24, 2021

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This article is written by Rashmi Jha, from Amity University, Mumbai. This article is about the analysis of development in human rights and the interrelationship between them.

Table of Contents

Introduction

Philosophically, human nature is essentia ut operator. Humans are the essence that exists in all their activities. Meanwhile, sociologically, human nature is always in a movement of change. In this case, Thomas Hobbes once put forward a proposition that life in motion is eternal (vitamotus prospectus est). At the same time, Pascal, in almost the same language, said that human nature is in action and change, Notre nature est dans le Mouvement Therefore, ‘development’ as a model of evolution has enormous relevance to life and human nature itself.

Definition of development

According to Nisbet, development is one of the oldest and most vital of all western ideas. According to him, the main element of this perspective is the metaphor of growth, namely growth that is manifested in organisms. Following this metaphor, development is understood as a directed accumulative process that results in structural differentiation and increasing complexity. Meanwhile, Bjorn Hettne views that development is an open concept that must be defined contextually. As our understanding of the process deepens, as well as the emergence of new problems that need to be solved, ‘development’ must constantly be redefined problems continuously, but also at the same time presents a problem for every solution.

In the trajectory of history, we have seen that Europe that was devastated was very ambitious to carry out a development plan after World War II. The initial instrument in European development, according to Bjorn, was a massive aid program from the United States through Marshall Aid. This program has a dual purpose, to run the world economy according to the Bretton Woods system, and at the same time, it is a project to curb the spread of communism as part of their Cold War agenda.

Furthermore, Bjorn considers that the reconstruction of Europe is directly related to the problem of development in ‘new’ nations, which are known by many terms: underdeveloped, undeveloped, emerging, poor, developing, and so on “colonial economy” became “development economy”. Therefore, the initial optimism of this development paradigm must be seen in the socio-historical setting of the successful rebuilding of Europe.

Development theory

Colonialism and globalization have led Third World countries to adopt development recipes in various models and forms. But in essence, the initial paradigm of the conception of development reflects the interests of the ruling elite in developing countries. According to Bjorn, the modernization paradigm presupposes that a society characterized by industrial capitalism is desired by all, but in fact, no one ever chooses capital accumulation and industrialization, a process that is often followed by the use of coercion and violence. The more backward a country is, the more coerced it appears to be. The modernizing elite, cleverly enough, kept silent about the horrific creative destruction, or what Peter Berger called the “pyramid of sacrifice”. Therefore, the theory of development is not value-free.

According to Arndt, the agenda of development theory from a simple growth model to a comprehensive and holistic theory of historical social change, besides being able to be analyzed based on the debate on the dimensions of formalism versus substantivism, is also reflected in the repeated choices between growth and development. Regarding the development paradigm that continues to this day, the grand narrative of growth is the dominant discourse that the West has most successfully exported to developing countries.

Human rights as a basis of growth and development

In addition to the ideology of growth, the West has also offered other development recipes. In this connection, Nerfin illustrates that the utopian trend in development theory is perhaps best summed up in the concept of “other development” popularized by Dag Hammarskjold’s 1975 report, “What Now”, which was prepared on the occasion of the Seventh Special Session of the United Nations General Assembly and described in more detail continued in the journal Development Dialog. According to him, “other developments” should be oriented to the following points:

Need-oriented (aimed at meeting human needs, both material needs and non-material needs. Endogenous (originating from the heart of every society, which sovereignly determines its values and vision of its future).
Independent (meaning that every society basically relies on strengths and resources) itself in terms of the strength of its members and its natural and cultural environment).
Ecologically good (rational use of environmental resources with full awareness of the potential of local ecosystems as well as global and local boundaries imposed on current and future generations).
Based on structural transformation (to realize the requirements of self-management and participation in decision-making by all those affected by the decision, from rural or urban communities to the world as a whole, without this the above objectives cannot be achieved).

In line with that, Olle Tornquits also proposes to overturn the development paradigm in a political context. According to him, the most significant setbacks for mainstream development studies are the lack of empirical foundations in the Third World, the bias towards democratic models based on generalisations or even grand universal theories, and focusing on elite levels. On the other hand, the ‘technical’ advantages of the development paradigm may help us offset the impossibility of avoiding fragmentation in Third World studies while building a solid empirical base. In other words, what must be done – when a solid empirical basis is found for aspects of politics and development in the Third World – is to expand the study of political action and overturn its practical and theoretical grounds.

On a more implementable level, Tornquist offers several recipes for the ‘overturn’ move. First, we must broaden the framework not by starting with narrow issues of political development but with more relevant questions about the role of politics as people seek to improve living standards and utilise their resources. Second, we should no longer start with empirical generalisations based on European and North American norms and experiences but rather with empirical findings in Third World politics and development. Finally, we need to return to the West to seek experiences that may enlighten our understanding of what is happening in the Third World and offer a new perspective on the West itself.

The counter against the development paradigm has also begun to be launched by observers and activists in Third World countries. Especially those who are starting to realise that their country has become a cash cow of developed countries. Structural transformation, of course, is not the only alternative approach. Still, the orientation of this transformation is determined by the normative content that should be based on sincere cooperation between developed countries and Third World countries by prioritising human values in every plan. The emergence of a human rights perspective in the development paradigm does not come immediately. This phenomenon is born and comes from a long dynamic process. Discourse maps on the view of human rights in development can be found in various models of debate. Some pretty remarkable things include the accommodation of development rights in various international covenants, such as the covenant on economic, social, and cultural rights as well as the covenant on civil and political rights.

Ideal development

At a more implementational level, the Vienna Declaration and program of action, especially at points 8 to 10, has provided clear instructions regarding the relationship between development and human rights.

Democracy, development, and respect for human rights and fundamental freedoms are interdependent and mutually reinforcing. Democracy is based on the freely expressed determination of a nation to establish its own political, economic, social, and cultural systems and its full participation in all aspects of its lives. In the context mentioned above, the promotion and protection of human rights and fundamental freedoms at the national and international levels must be universal and carried out without being related to conditions. The international community must support the strengthening and promotion of democracy, development and respect for human rights and fundamental freedoms worldwide.

The World Conference on Human Rights reiterates that least developed countries, committed to processes of democratisation and economic improvement, many of which are in Africa, must be supported by the international community for them to be successful in their transition to democracy and economic development. The World Conference on Human Rights reaffirms the right to builders, as implemented in the Declaration on the Right to Development, as a universal and inalienable right and an integral part of human rights.

As stated in the Declaration on the Right to Development, human beings are the main subject of development. While development supports the implementation of all human rights, the absence of development cannot be used as an excuse to justify the reduction of internationally established human rights. Countries must cooperate with each other to ensure development runs and overcome obstacles to development. The international community must develop effective international cooperation to realize the right to development and remove barriers to development. For progress in the implementation of the right to development to continue, effective development policies at the national level are needed, as well as equitable economic relations and a favourable economic environment at the international level.

Human rights as an integral element of the development agenda

Human rights and development is an important matter of concern in International society. One principal human rights problem is its successor implementation. Human rights are neither universally included nor respected; national and even worldwide implementation of human rights requirements may be characterized as uneven, from time to time it is getting weak. Human rights have been enacted in the institutional surroundings of the United Nations, and its feature becomes customary as binding legal guidelines with the aid of using some of the states. A total of 140 of 185 member states of the United Nations has ratified the International Covenant on Civil and Political Rights while 137 states have ratified the International Covenant on Economic, Social, and Cultural Rights.

Thus, human rights exist in the balance between a weak international community and state powers that are, to varying degrees, able and willing to make human rights more than endeavours. Human rights remain unknown or abstract, and if human rights are to be an integral part of a development agenda they must provide empowerment for people to be able to claim their rights and address their needs and problems. Hence, there are two strategies that appear particularly pertinent for human rights defenders to incorporate their agenda into a development agenda: a participatory vision of promoting the rule of law, and a genuine interest in the aspects of economic, social, and societal cultural rights.

The promotion of the rule of law is relevant for two reasons: firstly, the poorest sections of the population suffer most from the arbitrary application of the law; Impunity and corruption add to insecurity and insecurity will mainly discriminate against poorer sections of the population. Second, promoting the rule of law should be seen as part of an agenda to promote access to justice; and to bring the formal justice system closer to the people. Meaning of the common systems, but there is obviously a need to align formal and common systems.

In the context of development policy, real attention to the enjoyment and observance of economic, social, and cultural rights is necessary for human rights defenders and activists, because, in addition to personal protection and safety, these rights are more relevant to target groups. Unfortunately, livelihood, whether it is access to food and water, or shelter and clothing, remains the top priority of most third world populations. In the context of development, human rights defenders cannot resist addressing these priorities, although they may vary from place to place, precisely because they are related to this core human right: the right to dignity.

Conclusion

Improving the integration of human rights and development activities lies in the use of human rights in empowerment strategies. Exclusion is critical to the living conditions of the poor and disadvantaged groups in terms of the law. Three factors dominate their interaction with the formal judicial system: 1) Lack of understanding and confidence in the authorities, and lack of conviction that a person has and the related rights, 2) ignorance of their rights and 3) lack of economic and material access to modern legislation (this is too expensive, too far, and usually does not work in local institutions) is also assumed. Therefore, combating impunity and corruption and improving access to justice remains the key to empowerment strategies. The second part of the empowerment strategy is to enable marginalized population groups to claim their rights. Therefore, equity and knowledge of rights are essential. The core of this strategy seems to be a changing paradigm of the judicial system, which is less legal and more social, which excludes some human rights discourse from courts and mainstream institutions. In areas where there is an urgent need to protect and respect human rights.

References

https://www.humanrights.is/en/human-rights-education-project/human-rights-concepts-ideas-and-fora/human-rights-in-relation-to-other-topics/human-rights-and-development#:~:text=The%20right%20to%20development%20is,human%20rights%20are%20intricately%20linked.

https://www.un.org/development/desa/disabilities/issues/relationship-between-development-and-human-rights.html

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Pros and cons of setting up a trust and how to draft a trust deed : an analysis

By

Oishika Banerji

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August 24, 2021

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This article has been written by Ayush Sahay pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.

Table of Contents

Introduction

For any ordinary person, the principle of letting somebody else be in possession of something that is yours is called trust. But there are other ways through which a settler gives the other party their assets to hold or to be utilized for the benefit of a third party. Now letting another party hold your assets is not always the best option but how does the trust system work and why do people establish trusts? We will read all about this along with what are the important factors to keep in mind while drafting a trust deed.

What is trust?

As per interpretation of Section 3 of the Indian Trusts Act, “A “trust” is an obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner: “author of the trust”; “trustee”; “beneficiary”; “trust property”; “beneficial interest”; “instrument of trust”.” The above interpretation can be condensed into this. Party A called the trustee gives Party B rights to possess their property, which shall be used for the benefit of Party C, called the beneficiary. This forms a trust and these trusts shall then determine how the trustee’s asset will be utilized and managed.

How are they formed?

It is important to realize that a trust is set up to decide the manner in which the money or the assets in the picture of the settlor will be utilized in the due course of their life or even after their death.

A settler along with their lawyer lays out a detailed will that defines the manner in which their assets will be transferred to the trustee. The trust functions in the manner that has been determined in the will that the settlor and their lawyer finalize upon. To understand what legislation concerns a trust it is important for us to understand the types of trusts. In a larger frame, they can be divided as (i) Private Trusts and (ii) Public Trusts

Legislations concerning a trust

The Private Trusts in India are governed by the Indian Trusts Act, 1882, and have different kinds of trusts within its umbrella.

Revocable trust:

These trusts are established during the settlor’s lifetime and the can as per the settlor’s discretion be altered or revoked completely, sometimes known as living trusts, are ones in which the settlor transfers the title to a property to the trust, serves as the original trustee, and has the power to withdraw the property from the trust during his or her lifetime. Probate avoidance is made much easier with revocable trusts. The assets will not be subject to probate if they are transferred to a revocable trust during the settlor’s lifetime and are owned by the trust at the time of the settlor’s death.

Irrevocable trust:

An irrevocable trust is one that cannot be amended, modified, or canceled after it has been established. No one, including the settlor, may take a property out of an irrevocable trust once it has been transferred. Survivorship life insurance can be purchased, and the proceeds can be maintained in this kind of trust. In big estates, this sort of survivorship life insurance can help with estate tax planning; nevertheless, survivorship life insurance kept in an irrevocable trust might have major ramifications.

Constructive trust:

This trust is a trust that is implied. A court determines whether or not there is an implied trust based on particular facts and circumstances. In the absence of a formal declaration of trust, the court may decide that the property owner intended for the property to be utilized for a specific purpose or to belong to a specific individual. While someone may assume legal title over a piece of property, equitable considerations may dictate that the equitable title to that property actually belongs to someone else.

Spendthrift trust:

A spendthrift trust is one that is established for a beneficiary and does not allow the beneficiary to sell or pledge the trust’s interests. It is safeguarded from the creditors of the beneficiaries until the trust property is dispersed out of the trust and transferred to the beneficiaries. While Public Trusts are classified either as religious or charitable trusts that are governed by them;

Along with these legislations they are governed by state legislation like the Bombay Public Trust Act, 1950, etc.

Advantages and disadvantages of setting up a trust

Like everything out there, even trust has advantages and disadvantages which we will discuss here.

A. Advantages:

Tax Benefits on a long-term basis for the trust.
Reducing the chances of challenges against someone’s trust as per their Will or trust.

B. Disadvantages

The problem of not being able to reverse the process of setting up a trust.
High chances of losing control over the assets that have been used to set up the trust.

Often at times, the advantages of something are misused and the same happens in the case of trusts, which can be seen in Escorts Benefit & Welfare Trust (EBWT) v. ITO ITA, where a Private Trust, where in the year 2016-17 they received a dividend income of 4.47.60,037 Rupees. They claimed for an exemption of the mentioned amount under section 10 (34) of the Income Tax Act as they stated that the dividend distribution tax had already been paid by Escorts Limited, which is both the sole beneficiary and the settlor of EBWT. After this, the Assessing Officer passed an order stating that EBWT is an invalid trust under the provisions of the Indian Trusts Act, 1882 where it states that a trust ceases to be invalid in cases the settlor and the beneficiary are the same entities.

The Income Tax Appellate Tribunal Bench at Delhi in the case EBWT, they have reaffirmed the concepts such as I trust validity; (ii) the use of trusts to hold treasury shares; and (iii) the taxation of its income as a representation of the benefactors under the requirements of Sections 160-166 of the Income-Tax Act, 1961 (IT Act).

Documents required for the registration of trust and process of trust registration

Trust Deed;
ID Proof (Voter ID, Driving License, Aadhar Card, etc.);
Passport size photos of all parties mentioned in the Trust Deed;
Aadhar Card and PAN Card copies of all parties mentioned in the Trust Deed;
Registered Office Address Proof (electricity bill, etc.).

What is a trust deed?

A trust when has been entered into or has been created, be it private or public, is an obligatory relationship between the trustee, the settlor, and the beneficiaries. Thus to ensure that the obligations and rights are not affected in any ill manner, a trust deed is entered into (which works in the same manner as any agreement), while codifying the relationship between the parties involved.

Important clauses in a trust deed

Along with the basic boilerplate clauses, a few important a few clauses that a settlor and a trustee should ensure are watertight are as given below:

Cessation/ Termination of Trusteeship: This clause will determine the circumstances where the trusteeship between the selected trustees and the trust will come to an end. This comes in handy in case there are members of the trust trying to take advantage of the trust to evade taxes or to launder the same.
Power of the Trustees: Through this clause, the trustees are prohibited from acting in any way that goes beyond the trust deed’s stated powers. For the general operation and administration of the trust, the trustees are often assigned the following powers:
1. Recruitment and appointment.
2. Filing lawsuits on behalf of the trust.
3. Accepting donations and gifts.
4. Investing in the trust.
5. Opening bank and other accounts for the operational and financial functioning of the trust, etc.

3. Accounts and Audit: For a trust to function smoothly without any hindrance from the governmental agencies it is important for it to maintain the correct books of accounts and get them audited as and when required.

4. Amendments to the Rules and Regulations: This clause will mention who can and how can they make amendments to the rules and regulations of the trust.

5. Winding up: In the event that the company is wound up, the assets of the trust are not transferred to the trustees. With the consent of the charity commissioner/Court/any other law as may be relevant at the moment, they shall be transferred to another comparable trust or organization whose goals are identical to those of this trust.

Conclusion

It is a known fact that trusts are often associated with individuals who have a high net worth and are looking forward to passing down these assets to their heirs or putting them to some charitable use. If you want to set up a trust, you’ll undoubtedly have to give up some control of your assets’ distribution. A will is the simplest way to transmit property to a loved one without using trust. You may be subject to more taxes if you take this path, and your estate will have to go through the process of making claims. So, to ensure that you know how the future of your assets will be like you are more likely to set up a trust. Keeping in mind the aforementioned facts as to why a trust is beneficial and having the clarity of what clauses in a trust deed are important to be clarified and should be free from any loopholes, setting up a trust becomes easy.

References

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Interim maintenance under the Domestic Violence Act, 2005

By

Rachit Garg

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August 24, 2021

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This article is written by Anurag Singh from ILS Law College, Pune. This is a comprehensive article on interim maintenance under the Domestic Violence Act, 2005.

Table of Contents

Introduction

Marriages in India are very sacred and are meant to last a lifetime. However, not all marriages are perfect, and in some cases where domestic violence becomes an issue in a household, it’s better to leave than stay in that marriage. Therefore, after filing for a divorce and the divorce is granted, the main issue becomes the ‘maintenance’. After the marriage is dissolved, a wife can ask for maintenance from her husband under Section 125 of the Code of Criminal Procedure,1980 (CrPC), special marriage laws of the parties, the Special Marriage Act, 1954, and The Protection of Women from Domestic violence Act, 2005. Herein in this article, we are going to discuss the intricacies of maintenance through the lenses of the Domestic violence Act, 2005.

Domestic violence : a rising issue in the recent times

The central government declared a lockdown for the first time in March for just 21 days but eventually, it went on till May, which included four phases. When the whole world was dealing with the pandemic, there was a different story in the Indian households. A record number of 1,477 cases were reported between the 1st phase and 4th phase of the lockdown. This number is claimed to be the highest in the past 10 years by the National Commission for Women (NCW).

However, it will not be out of place to state here that this is not a pandemic problem, 86% of the women don’t resort to legal solutions and 77% don’t even mention the incident of domestic violence to anyone. Therefore, it is evident the major part of the problem is not talking about the same. Let’s discuss the issue of interim maintenance through this article.

Difference between interim and final maintenance

For the sake of understanding, we can say that the maintenance amount is given during the time of court proceedings. The second type is given after the legal separation. The former is called interim alimony and maintenance and the latter is called permanent alimony and maintenance,’ while differentiating interim and final maintenance, Mumbai-based lawyer Mrunalini Deshmukh had this to say.

Interim maintenance is granted to the applicant while the proceeding is still going on in the court, this continues till the court has reached its final verdict. The concept of interim maintenance was formulated so the applicant does not suffer until the court’s verdict is reached. However, the respondent doesn’t have to necessarily need to give the interim maintenance, it’s upon the discretion of the courts.

This is because maintenance is covered under Section 20 of the Act, in the limited sense that it is mandated despite any payments already being made under Section 125 of the IPC. This means that there is no special power or relief under the Domestic Violence Act that covers women that face domestic abuse and need protection under the law.

Final maintenance is the maintenance given by the courts as a final verdict of the court, it can be in the form of alimony or it can be in the form of maintenance. The former is a lump sum payment of an amount and the latter is a timely monthly payment. Moreover, the interim maintenance comes to an end once the final verdict is delivered.

Information that needs to be acknowledged

The two Sections talk about interim relief under the Domestic Violence Act. Section 12 allows the filing before a magistrate for any of the reliefs provided in this Act, including interim relief. Section 23, on the other hand, allows the magistrate to provide interim, or ex-parte orders.

Under Section 20(1)(d) of the Domestic Violence Act, 2005 the aggrieved women and children can claim maintenance under Section 125 of CrPC. Moreover, under Section 125 CrPC, maintenance has a very wide scope. However, this Act was formulated for the protection against domestic violence. Therefore, only the aggrieved women and children fall within the ambits of the Act.

Furthermore, under Section 20(6) of the Act, the magistrate can direct the employer or the debtor of the respondent to directly pay the aggrieved person from the salary or the debt of the respondent.

Under the Domestic Violence Act, there are other monetary reliefs for the aggrieved women but the maintenance is altogether a different issue. She can claim damages for the harm done to her in the marriage, it could be physical, emotional, or sexual abuse. However, these damages do not come under the ambit of maintenance.

Important judgments on interim maintenance

Interim maintenance under Hindu Marriage Act

When we talk about interim maintenance in particular it is a concept from the Hindu Marriage Act, 1955 called maintenance pendente lite, it is stated under Section 24 of the Act. Moreover, in Pradeep Kumar Saini Vs. Seema & Ors (2009). The Supreme Court held that while deciding the issue of interim maintenance, the court has the power to reject such appeal, but they have to state the reason for rejecting it. However, if granted, the magistrate also has the discretion to grant interim maintenance from the date of order or date of application, interestingly, without any special reason because no such requirement has been enshrined in Section 125(1) of CrPC.

Ad interim maintenance was developed to protect the victim because it was seen that many women across the country were dependent on their husbands for their maintenance in their married life, however, when the parties parted their ways the wife always found it hard to sustain the legal proceedings along with their daily life until the final verdict. Therefore, the Court in the case of Smt. Sushila Viresh Chhadva vs Viresh Nagshi Chhadva (1995) held that the purpose of interim maintenance will be deferred if the expense for the conduct of the proceeding itself is delivered in the final proceeding. Therefore, the court was of the view that the application for ad interim maintenance should be expedited within eight weeks of the first hearing.

It is crystalline that courts can refuse to grant on certain grounds out which one is if the wife has a source of income. However, it was held by the Supreme Court in the case of Smt. Shailaja W/O Khobbanna Patil vs Sri. Khobbanna S/O Siddappa Patil (2013) that having a source of income and being eligible to generate income are two different things and shouldn’t be confused with one another. Moreover, it was further corroborated in the case of Kanupriya Sharma vs State & Anr (2019) and Babita Bisht vs Dharmender Singh Bisht (2019) where the Delhi High Court came to a similar conclusion.

Interim maintenance for live-in relationships under Domestic Violence Act

Interim maintenance under the Domestic Violence Act, 2005, provides interim remedies to women that have been suffering through domestic violence. However, being married is not quintessential for women to claim interim maintenance under the Act. The Supreme Court in the case of D.Velusamy vs D.Patchaiammal (2010) held that a ‘relationship in the nature of marriage’ is akin to a common-law marriage. Common law marriages require that although not being formally married:

(a) The couple must hold themselves out to society as being akin to spouses.

(b) They must be of legal age to marry.

(c) They must be otherwise qualified to enter into a legal marriage, including being unmarried.

(d) They must have voluntarily cohabited and held themselves out to the world as being akin to spouses for a significant period of time.

However, the Court also stated that merely staying together on weekends and “whom he maintains financially and uses mainly for sexual purpose and/or as a servant it would not, in our opinion, be a relationship in the nature of marriage would not amount. ” It must also fulfill the above requirements, and in addition, the parties must have lived together in a ‘shared household’ as defined in Section 2(s) of the Act. This was a landmark Judgment because it added live-in relationships under the ambits of the domestic violence Act and later on in the case of Parveen Tandon vs Tanika Tandon(2021) the Delhi High Court upheld the order of interim maintenance to ‘live-in partner’ of married man under the Act.

Rajnesh v. Neha 2020 : a landmark judgment

Rajnesh vs Neha (2020) is a landmark in more than one way because it streamlined the process of maintenance and dealt with various issues and also laid down some guidelines for other courts to follow, let’s discuss the various issues dealt with in the case:

Determination of quantum of maintenance

The main objective of the concept of maintenance is not to burden or trouble the husband but, see to it that the women after their divorce lives with dignity and is not left out in the cold. Therefore in the instant case, the court was of the view that there should be some factors to determine the interim or final maintenance, they are:

Status of the spouse: The court will look into the wife’s background to determine whether the wife would on her own be able to maintain the standard of living she is accustomed to from the household of her husband. For example, the court will look into whether the wife is educated and professionally qualified, whether she was employed before the marriage and left, and whether she has any source of income.

Interim maintenance

“While there is a tendency on the part of the wife to exaggerate her needs, there is a corresponding tendency by the husband to conceal his actual income.”

This remark was made by the honorable Supreme Court with regards to the situation in the courts while contesting the interim maintenance because interim maintenance is mostly based on guesswork and prima facie understanding of the facts. Therefore, more often than not, the court either awarded interim maintenance which was too burdensome on the husband or awarded interim maintenance which was too low for the wife to survive.

Therefore, to resolve this issue the Supreme Court in the instant case directed that an affidavit of all the assets and liability owned by the parties should be made available by the parties to courts so that the courts do not award unfair interim maintenance. Importantly, if either of the parties tries to lie in the affidavit they would have to serve consequences for their action under Sections 195 and 340 CrPC.

In addition to the aforementioned point, there has always been a tussle that should interim maintenance be awarded after the application or after the order, herein the Supreme court made it crystal clear that in case of interim maintenance should be awarded from the date of application.

Overlapping jurisdictions

It has been observed in family law-related cases the wife tends to file cases under various cases under a different law, which is fine because every law has its remedy and relief, however, the husband has to suffer because he has to pay the maintenance under different enactments which are not fair for the respondent in such cases. Therefore, the Supreme Court in the instant case believed that if the wife obtains an order of maintenance in one of the cases then the other court hearing the matter for the same parties should be made aware of the fact that she has already been awarded a verdict of maintenance. Moreover, the courts hearing the subsequent matter should also keep in mind that fact and grant an adjustment or set-off of that amount.

Maintenance Orders

Enforcement of the order of maintenance is the most challenging issue, which is encountered by the applicants. If maintenance is not paid on time, it defeats the very object of the social welfare legislation.

The Court, however, believed that striking off the defense of the respondent is an order which ought to be passed in the last resort, if the courts find default to be wilful and contumacious, particularly to a dependant unemployed wife and minor children. Contempt proceedings for wilful disobedience may be initiated before the appropriate Court.

This judgment has taken most of the issues related to maintenance and tried devising a mechanism that can suit all parts of the country. Moreover, it has paved the way for many cases yet to come.

Conclusion

The Domestic Violence Act, 2005 was formulated to deal with the intricacies of domestic violence because it was not specifically defined anywhere. Interim maintenance was always an issue under the Act in some cases the wife would get more than what she should get and in some cases, she would not receive enough. Moreover, the problems were not only for women but men as well, just because women are protected under the Act even though they are capable of earning they would take hefty maintenance from the husband. However, with the recent judgment, we can be optimistic about the future of the Act.

References

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Import of foreign Covid-19 vaccines and an indemnity deadlock

By

Oishika Banerji

-

August 24, 2021

0

This article has been written by Shivam Sharma pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from LawSikho.

Table of Contents

Introduction

A devastating second wave has left India with a demoralized population and a crippling economy. With some 400,000 cases per day, India witnessed an unprecedented crisis. This disaster is bound to repeat itself if it is not tackled on a timely basis. Vaccination of the entire population is one such way. But for now, with only 150 million doses administered, a complete vaccinated population seems to be a pipe dream.

Currently, India has only two vaccines, COVISHIELD and COVAXIN, which are both indigenously produced in the country. But the Indian manufacturers can only make so many vaccines. This is one reason why only 2 percent of the entire population of the country is completely vaccinated. To tackle this mayhem the most viable option is to import vaccines from foreign manufacturers, like Pfizer and Moderna.

But both Pfizer and Moderna have reservations against the supply of their vaccines to India. As a precondition to the supply of their vaccines, they want the Indian government to indemnify them. This article attempts to explain what this indemnity is and how they affect the vaccination drive in India. It first explains the elements of indemnity and then correlates it to the demands of the vaccine manufacturers. Finally, it makes an argument as to why India should grant indemnity to the vaccine manufacturer and why it should not. The article ends with the author’s suggestion on the issue.

What is an indemnity?

Indemnity is a kind of contract in which one party promises to save the other from the consequences of an act. In day-to-day parlance, it is a protection against any loss or damage. The word ‘indemnity’ is defined under Section 124 of the Indian Contract Act, 1872 as a contract where the promisor promises to save the promisee from any loss which occurs due to the act of the promisor himself or the act of some other person. In the illustration to the said section, a promisor promises to the promisee that he will save the promisee from the consequences of any legal action taken against him. This makes an indemnity contract a contingent contract because the liability of the indemnifier arises only when a contingent event occurs.

The person giving the indemnity is called the ‘Indemnifier’ (the Indian government) and the person to whom the indemnity is provided is called the ‘Indemnity Holder’ (the foreign vaccine manufacturers). In accordance with the interpretation of Section 125 of the Indian Contract Act, 1872, an Indemnity Holder has the right to recover the following from the Indemnifier:

Any damages that the Indemnity Holder has to pay under a legal suit (where such suit is covered under the scope of indemnity being provided);
Any other costs that have to pay in such suits;
Any sum which had to be paid under the terms of any compromise in the context of such a suit.

As per the principle under re Richardson, in indemnity, the Indemnity Holder shall be never called upon to pay. This principle is also followed in Indian jurisprudence. The most important judgment in this context is Gajanan Moreshwar Parelkar v. Moreshwar Madan Mantri. In this case, the Bombay High Court held that when an Indemnity Holder’s liability becomes absolute, he shall be absolved of the same by the Indemnifier. The Calcutta High Court has followed the same principle in Osman Jamal & Sons Ltd. v. Gopal Purshottam.

What indemnity is required by the vaccine manufacturers?

Typically, it can take decades to develop and approve a vaccine. This is because a vaccine can alter human biology at a very fundamental level. However, the covid situation is unprecedented. Covid has caused a 3.5 percent fall in the global output levels in 2020 alone, as per the stats of the IMF. On top of this economic loss, there is the loss of innocent and indispensable human lives. This is why the vaccination initiative across the globe was given a green go even before it had been through the requisite process of approval. While there haven’t been any adverse effects of the vaccines yet, there have been instances of blood clotting and the long-term effect of these vaccines are still unknown.

The dilemma that the vaccine manufacturers now face is that will they be liable for any injury caused to any person due to the administration of the vaccine that they had produced? And if yes, what will be the extent of their liability? Will they have to pay heavy damages and compensation, even though they had in effect observed all requisite care and caution in the production and distribution of vaccines in such pressing times?

The vaccine manufacturers thus seek to be bestowed with such indemnity from the government so as to protect them from any claims of damages and compensation. On the global level, Pfizer and Moderna have been given such immunity under US Countermeasures Injury Compensation Program and WHO’s COVAX. However, there are no such promises given by the Indian government. This makes the vaccine manufacturers liable.

Practice in other nations

In America, the Public Readiness and Emergency Preparedness Act, 2005 is the substantial statute that grants legal immunity to companies that are engaged in the making of critical medical supplies. The immunity does not exempt any intentional misconduct on part of the companies. Currently, Pfizer and Moderna have been granted immunity that protects them from any liability which could arise out of the vaccines that they produce.

As for the United Kingdom, the Human Medicine Regulations, 2012 has been put to use to grant civil immunity to Pfizer and Moderna. South Africa, like India, does not have a statute to protect the vaccine makers. In order to facilitate the import of foreign vaccines, South Africa has set up a compensation fund that will be used to indemnify the vaccine manufacturers for any damage which is caused by the vaccines.

Arguments for indemnity

In 2020, a 40-year-old man enrolled himself in trials for the ‘Covishield’ vaccine. The indigenously developed vaccine is manufactured by Serum Institute. Later the said person, issued legal notices to Serum Institute alleging that he had suffered serious and irreversible side effects which included neurological breakdowns and damage to cognitive function. In the same notice, he also sought a compensation of INR 5 Crores from Serum. Since the occurrence of this incident, Serum has consistently demanded that it should be provided with indemnity for any damage caused by the vaccine.

Presently, the agreements between vaccine manufacturers and the central government all have liability clauses. Due to this clause, the vaccine makers are liable for any damage caused because of the administration of their vaccine. But it is not just the vaccine manufacturers who can be sued, the central government can itself be held liable. This is because the government can be made liable for commercial transactions. All commercial transactions of the government are an exception to the sovereign immunity held by it, as was highlighted in the case of Peninsular and Oriental Steam Navigation Company v. Secretary of State for India and later in Ethiopian Airlines v. Ganesh Narain Saboo. Hence, it is legally possible that the government can take over the liability of the vaccine manufacturers with the insertion of an indemnity clause.

Going further, it is a tenant under the Second Restatement of Torts that no vaccine manufacturer should be made liable for any latent damages which are very unavoidable. This is especially true in the present context where the vaccine manufacturers cannot adhere to the normal protocol due to the urgency of the situation. As long as the vaccines are properly manufactured with the highest degree of care and caution, the manufacturers should be subjected to unreasonable expectations.

Arguments against indemnity

With the shortage of supply and the ‘grant of indemnity’ being the only hindrance in procuring foreign vaccines, it appears rather straightforward that the government should grant it. There is, however, caution to be observed. In Gunjan Moreshwar v Moreshwar Madan, it has been held that when the liability of the Indemnity Holder becomes absolute, so does the liability of the Indemnifier.

This would mean that the government will become liable for all the damages caused by these vaccines. This would add to the financial burdens of the government which is already struggling with the economic ravages of the Covid era. In addition, granting indemnity to foreign manufactures would seem unjust if the same courtesy is not extended to the Indian manufacturers like Serum Institute. Thus, the government will have to indemnify all the players in the market, adding more to the already heavy basket that it carries.

Conclusion

There is no way of knowing the magnitude of loss that Covid has caused to the children who missed out on their education. In the coming years, we will have to get them vaccinated as well. But no vaccine manufacturer would be willing to supply vaccines to a nation where it is facing civil suits for damages and compensation in lieu of the vaccines it provided for the adult population.

In addition, the Indian government has set out to achieve 100 percent adult vaccination coverage by the end of 2021, a feat that seems more and more impossible as the deadline arrives nearer. To bridge the vaccine deficit for both the young and adult population, India seeks to purchase some 50 million vaccines from Pfizer. But Pfizer along with Moderna have refused to enter the Indian market without the assurance of Indemnity from the Indian government. India will consider reaching a middle ground with the manufacturers, just like the UK did.

This has indeed become a catch-22 situation where the Indian government will either have to give up the vaccine procurement from these foreign entities or they will have to bear the burden of hefty damages and compensation. If the choice is between vaccines and a budget deficit, it is rather rational to get more vaccines. An immune crowd can still put the economy back on its feet. There are 25 jurisdictions with no-fault compensation programs. It is time that India joined their ranks.

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Introduction

Facts of the case

Issues involved in the case

Arguments advanced by both parties

Plaintiff

Defendants

Analysis of the case

Concept analysis

Concept of celebrity and personality rights

In the arena of sports

Concept of passing off

Analysis of judgement

Conclusion

References

Introduction

Why is the Apple-Disney rumour in the market these days?

The aftermath of the merger if it were to take place

Post-merger acquisition

Conclusion

References

Introduction

What is an independent film actor contract?

What are a few clauses to look out for in this contract?

Compensation rates

Term of employment

Is the contract exclusive

Merchandising

Promotion and publicity

Public liability insurance

Food and refreshments

Travel expenses

Wardrobe

Benefits

Remedial clause

What if there is a breach in this contract?

Implications of not getting into the agreement

Relevant examples

Conclusion

References

Introduction

Internal water

Jurisdiction over foreign merchant vessels

Jurisdiction over foreign warships

The territorial sea

Innocent passage

Warship

Contiguous zone

Exclusive economic zone (EEZ)

Rights of coastal states in its EEZ

Rights of foreign states in EEZ

Residual rights

Rights and duties of a state in freedom of navigation & nationality of ships

Right to visit and right of hot pursuit

Right of fisheries

Conclusion

References

Introduction

Background

Protocols of the Convention

Protocol to prevent, suppress and punish trafficking of women and children

Protocol against the smuggling of migrants by land, sea, and air

Protocol against the illicit manufacturing and trafficking of firearms

Signatories

Conference of parties

Conclusion

References

Introduction

The interrelation between the corporate veil and the human rights

Business and human rights in India

National norms

International norms

Protect

Respect

Remedy

Remedy for the violation

Case studies

Vedanta Sterlite Plant Issue (2013)

The case of Plachimada (2003)

Conclusion

References