An analysis of the initiation of contempt proceedings against K Sudhakaran for remarks on High Court murder judgment

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August 23, 2021

Contempt proceeding — Image Source - https://rb.gy/45wign

This article is written by Aastha Verma, from Kalinga University, Raipur Chattisgarh. The article discussed the detailed analysis of the remarks on High Court murder judgment and contempt proceedings against K. Sudhakaran.

Table of Contents

Introduction

According to the Contempt of Court Act, 1971 (hereinafter referred to as the Act) the contempt can be either civil or criminal which means willful disobedience to any judgment, decree or publication of any matter of any act which lowers the authority of the court or interferes with any judicial proceedings. Article 129 of the Constitution of India defines Contempt of Court in which the Supreme Court has the power to punish for contempt of itself and its subordinates court as well. Article 142 of the Indian Constitution empowers the court to provide punishment for contempt subject to laws made by the parliament. Fundamental rights are guaranteed under Part III of the Indian Constitution. Article 19(1)(a) talks about the freedom of speech and expression which is the most sensitive as well as controversial part of the constitution. K. Sudhakaran is a member of the Indian National Congress (INC) who has made a disgraceful and disrespectful remark on the decision made by the High Court against whom contempt proceedings were started by the Advocate General of Kerala.

Contempt of Court Act, 1971 and it’s objective

Section 2(c) of the Act defines the term criminal contempt. The publication of any matters whether by words, spoken or written, or by sign or visible representation lowers or tends to lower the reputation of the court or interfere with the administration of justice is liable under Section 2(c) of the act.

It is an attack on an individual Judge or the Court as a whole with or without referring to a particular case by giving the defamatory statement upon the character or the ability of the judge.

In the case of Hari Singh Nagra v. Kapil Sibal (2010), the court held that the authority of the court shall not be confused with the judges as an individual. Where the contemptuous comment is made on the judge as an individual the same may amount to defamation but the charges of contempt cannot be invoked against such actions.

The objective of the Act is to define and limit the power of the court in punishing contempt of court and to regulate their procedure. Section 12 of the Act deals with the punishment for contempt of court. The power has been given to the Supreme Court and the High Court.

The alleged person will be punished for the simple imprisonment which may extend to six months or fine up to Rs. 2000/- or both. However, the accused may be discharged or emitted from the punishment if he makes an apology and should satisfy the court.

The court can not impose a sentence for the contempt of court in excess of what is prescribed in the act either in respect of itself or of a subordinate court. Section 20 of the Act provides the limitation for the action of contempt. No court shall initiate any proceedings of contempt in two conditions –

Either the proceedings are on his motion; or
After the period one year from the date on which the contempt is alleged to have been committed.

Criminal contempt proceeding against K Sudhakaran : an insight

A group of lawyers presented a petition in the Supreme Court seeking criminal contempt action against K. Sudhakaran for alleged remarks against certain retired judges of the Supreme Court and the petition was directly presented to the Chief Justice of India.

In the petition, they said under Article 129 of the Constitution the Supreme Court sentenced the former Minister of Kerala Balakrishna Pillai to one-year of rigorous imprisonment in the case at the public meeting. He defamed the retired judges of the Supreme Court and the institution.

Further, they added that he outraged and lowered the authority of the highest court of India in the eyes of the public and interfered with the judicial proceedings. He also criticized the Supreme Court for the imprisonment given to the former minister in his contemptuous speech and levelled up by bribery and corruption charges against the Judges.

It is a constructive criticism against how the judgment came to be pronounced and on the character of the Supreme Court and its judges. A First Information Report under Section 154 of the Code of Criminal Procedure, 1973 was also registered with the Delhi Police and Police to investigate the alleged crime and check whether he was part of the crime giving a bribe to the judge.

He claimed that a litigant representing a group paid bribery in his presence. The litigant denied the charges of K. Sudhakaran says it is made off the cuff. He approached the Supreme Court to restore the license that was cancelled by the State Government.

As the High Court upheld the decision of the government. The police registered the case on charges under Section 120 and Section 202 of the Indian Penal Code, 1860 for concealing design to commit an offence punishable with imprisonment and intentional omission to give information of offence who is bound to inform.

The Union Minister of Law M. Veerapa Moily disapproved of the statement of Congress MP K. Sudhakaran that he witnessed the judge taking bribes 15 years ago. The random remarks on such a big institution make people lose their faith. You cannot pass such remarks that disrespect the highest court of India that was built many years ago with the great efforts and contribution of the constituent assembly.

Shuhaib murder case

The Shuhaib murder case is a high profile case as it involves the murder of the Congress Youth member Shuhaib. Advocate General sanction a petition seeking the initiation of contempt proceedings against K. Sudhakaran for his contempt regarding the High Court Judgment in the murder case. The politician in their speech termed Kerala High Court Division Bench as disgraceful and made derogatory remarks about the judges who comprised the bench going to the extent of questioning their intellectual abilities. The case in which the High Court concerned the murder of Shuhaib one of the youth congress member. The case was highlighted by the Congress as a demonstration of Communist Party of India (CPIM) culture of eliminating rivals. After the single bench directed a Central Bureau Investigation (CBI) inquiry into the death of Shuhaib, the division bench set aside the judgment in 2018 which was later followed by the proceedings of the Supreme Court. According to the High Court there was not much evidence available before the court and the report was intrinsically unjust and distorted.

The petition in High Court had alleged that prime accused was close to in high echelons of power including CPIM’s District Secretary asserted that current investigation was going on in a manner dictated by the ruling party who control the police machinery in the kannur district. Further added that Chief Minister Pinyari Vijayan’s rejection of demand for a CBI probe was due to pressure from the district committee of CPM Party.

After the single bench allowed the plea, the same was set aside by the Division Bench upon the appeal filed by the state government. The bench noticed that there was hardly any material available before the writ court that could lead to assume that investigation was unfair or biased and the crime was termed as ‘hasty direction’ by the division bench. Also, the division bench noticed that the state police had arrested six persons and recovered the weapon alleged during the crime before the case was taken into consideration by the court. The Court wanted further details regarding the investigation and asked for the production of a case diary for the points which are not clear. Also, it did not grant any opportunity to the state government to file a counter affidavit in response to the writ petition. The direction was issued to transfer the investigation of the case to CBI. Such a hasty direction was not warranted on the facts and circumstances of the case.

Kerala Advocate General sanctioned petition against K. Sudhakaran

The Advocate General has granted permission to take action against Congress MP K. Sudhakaran for his remarks against the High Court in connection with the case of Suhaib murder case and charge him for contempt of court. The order was pronounced on the petition filed by a High Court lawyer. He has made a disgraceful and disrespectful remark expressing reservations about the intellectual ability of the judges. So that the public can lose confidence in the court’s decision. In a public event held in Kannur, he pronounced that the verdict is given out of mind and will lose their trust from the public. The bench quashed the verdict leaving the case to the Central Board of Investigation (CBI). K. Sudhakaran said he has not said anything unconstitutional and many statements are against the Court and not against the judges.The High Court verdict which ruled that a CBI probe is not needed is dishonourable. The Advocate General submitted a plea to the High Court Advocate starting with the statement of K. Sudhakaran amounts to contempt of court.

Conclusion

The issue of criminal contempt keeps on rolling on the discussion table before the citizens. The laws related to contempt of court overlaps with the Indian Penal Code, Contempt of Court Act, 1971 and contempt powers are given to the Supreme Court and High Court under the Indian Constitution. The Supreme Court is the Highest Court of India and has ruled that it has the power to punish for contempt not only of itself but also high courts, subordinate courts and tribunals that are functioning in the Country. Not only higher courts but also lower courts should be given this power. K. Sudhakaran MP of the Congress Party alleges that judges of the Supreme Court take bribery, are corrupt and the public should not trust them where the Union Minister of the law said that such remarks are disrespectful as great efforts are taken to build such a huge institution.

References

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How to draft compensation clause in consulting agreement

By

Shoronya Banerjee

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August 23, 2021

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

Table of Contents

Introduction

If you are a consultant or a company looking to appoint a consultant, you’ll require a contract. A consultancy agreement is an important legal document that will help you to achieve your goals, shows the work to be done, and gives the terms of an agreement between two parties. Read this article to learn what a consultancy agreement is, to find out the importance of a compensation clause in a consulting agreement, and to see an example of drafting a compensation clause in a consultancy agreement. When an external consultant is appointed, the company requires a consultancy agreement. It’s always good to enter into an agreement with the consultant.

What are consultancy agreements?

A consulting agreement is a contractual document that outlines a working relationship between a business and a consultant providing the company with its services. The consulting agreement makes clear the terms of professional relationship as a technique for keeping both parties liable when it comes to the type of work and compensation expected. Having a consulting agreement when availing the services of an outside advisor or specialist is a necessary part of running a business and helps protect a company from possible or various disputes. It should be kept in mind that a consultancy agreement governs the appointment of a consultant. A consultant should be an expert or who has a wide range of knowledge in a particular field which can be provided in the form of services to a client or company. The consultancy terms will always depend on the type of services or on the nature of the consultancy provided.

A consultancy agreement is important to be drafted by a company in order to clearly set out the extent of the consultancy work to be taken up by the consultant after identifying the expectations of the client. Whenever you are appointing a consultant to work for your business, always draft a consultancy agreement. Having a written record of such an agreement keeps both parties liable. It also ensures that an unworthy person does not get the payment without providing their services.

A consulting contract must offer a detailed description of the duties you will perform and the deliverables you promise the client. The agreement may also explain how much work you will perform at the client’s office and how often you will work remotely.

Major elements of the consultancy agreement

Scope of work: The consultancy agreement clearly states the responsibilities and duties, obligations/liabilities, and services to be done by the consultant. The methods of work are not defined generally. The consultant can use their own discretion in performing such works.

Term: The time period for which the services of the consultant are required by the company should be properly mentioned in the contract.

Payment/compensation terms: The payment terms must include the payment mode, the amount of compensation that should be paid to the consultant when the compensation should be paid (monthly, quarterly, etc.). If any out-of-pocket expenses are given to them, they should be mentioned in the agreement.

Confidentiality: The consultant should keep company information confidential except that information is already available to the general public.

Termination: The notice period and rights of either of the parties to terminate the agreement should be stated in this clause.

Consultancy agreement is beneficial to the company as well as the consultant. It covers all the aspects related to all the pieces of works to be performed within the said time. The agreement helps to avoid any misconstructions on the part of the consultant as well as the company. It also acts as a legal document in the event of any controversy between the consultant and the company.

Whether consultancy agreements are legally binding?

Consulting agreements are contracts that have legal consequences and are binding contracts. The consulting agreement has clauses that mention what should be done if a dispute arises and what actions can be taken by the offended party in case of such disputes. If the consultant did not deliver the services for which you paid him, you can use the consulting agreements (contract) as evidence in courts to recover the loss incurred to the company because of the failure of the consultant.

Significance of compensation clause in a consultancy agreement

The compensation clause is relatively important for both the parties i.e. the consultant and the client. This clause states the amount to be paid by the client for hiring the services of a consultant. It is advisable to pay the compensation in tranches in other words on the basis of completion of particular tasks or deadlines, this assures the effective completion of the work.

The procedure of drafting compensation clause

Including compensation terms in your consulting agreement. It is important to showcase the exact terms for payment.
If payment terms are left idle, you are risking a scene where you are constantly bothering the client for payment, which is the last resort.
Detail out full compensation and payment terms in an exhaustive manner within your contract.

Example:

Compensation and payment

Set up Fee: For the Services described in Clause 3, Client will pay Rs———— in setup fees. Set up, as outlined in Clause 3, can take different lengths of time, but will take around 30 days usually.
Ongoing management: For the services described in Clause 4, Clients will pay the Company Rs———per month for ongoing management. The Rs——– will be due every 15 days and will be deducted from your payment method on file each month.
The Consultant without the prior written approval of the Client shall not be entitled to vary the Fees at any time during the time period of the Contract.
The Client shall compensate the Consultant for all the out-of-pocket expenses, incurred by it in connection with the Services for the Client.
The Consultant is not required to provide Services unless all Fees and disbursements due to it in relation to the provision of the Services are received as provided in this Agreement.
The Fees and any additional sums payable shall be paid in full by the Client into such account given by the Consultant which will be instructed from time to time.

OR

“For the foregoing Agreement to consult with the corporation, the Corporation agrees to pay the Consultant the sum of Rs ————–, upon execution of this Agreement”.

OR

“In consideration of his obligations hereunder, for the term of this agreement consultant shall be paid as follows: The Corporation hereby covenants and agrees that Upon execution of this agreement, the consultant will receive 100,000 shares of the Company‘s common stock and additional compensation as directed by the Board of Directors and/or the President. For capital raised on any introductions provided by the consultant, a consultant will receive compensation in the amount of 10% of initial and any subsequent amount up to $1,000,000 (1st closing). All transactions exceeding $1,000,000 (1st closing) will be compensated based upon the Lehman Formula. The consultant will be compensated based on the Lehman Formula for any merger, acquisitions, or contracts that he may introduce to the company. Payment to be delivered in a manner mutually agreed upon by both parties”.

OR

“COMPENSATION: The compensation to be paid to Consultant for the performance of the Services described above will be based on actual hours worked on the project. The billing rate is $175 per hour for regular working time and 50% thereof for travel time (including air, rail, and auto travel to and from any place not the Consultant’s regular place of work). Consultant shall be reimbursed upon receipt of an invoice for all reasonable travel, lodging, and meal expenses, and all reasonable expenses incidental to travel and other expenses specific to the Services provided. Consultant shall receive prior approval from Company prior to incurring incidental expenses exceeding $500; the Company reserves the right not to reimburse costs exceeding $500 if prior approval has not been granted. Invoices will be provided to Company on a monthly basis and will identify work performed for the invoice month according to Company’s standard hour tracking. Payment will be due within 30 days of the invoice date. The consultant will charge a late payment fee of 1 1/2% per month, or the maximum amount permitted by law if less than 1 1/2% per month, for any payment not received within 30 days from invoice date. If a portion of an invoice is in dispute, then Company shall pay the undisputed amounts as set forth in the preceding sentence and the parties shall use good faith efforts to reconcile the disputed amount within (60) days invoice date.”

Conclusion

The consultancy agreement is between the company and the consultant. In this agreement, the extent of work to be performed by them and any other terms and conditions connected to their appointment in the company is mentioned. Consultancy agreement gives all a clear picture of everything i.e. what is happening when it has happened, how it happened and why it is happening, and what to do if a deliverable is not met, or one of the parties breaches a promise. It is advisable when recruiting consultants, drafting up a proper legal agreement is very important, and it has a huge impact on the success or failure of the project.

References

https://www.businessnewsdaily.com
https://www.summitcountyco.gov/DocumentCenter/View/15915/Exhibit-A-Sample-Services-Agreement
https://cleartax.in/s/consultancy-agreement
https://blog.ipleaders.in
https://www.lawinsider.com/clause/compensation-of-consultant

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Analysing the right to carry competing business in the context of data confidentiality and privacy

By

Diganth Raj Sehgal

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August 23, 2021

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This article is written by Ankita Jangid, pursuing BBA LLB from Bansthali Vidyapith, Rajasthan. This article deals with the right to carry competing business does not mean the illicit use of another party’s confidential information and data with regard to the right to privacy.

Table of Contents

Introduction

In the current scenario, where there exists ruthless competition in the business world, there is a strict need to maintain confidentiality in order to stay powerful in the competition. One of the most popular agreements of the business are known as non-disclosure agreements which are commonly used for the purpose of maintaining the secrecy of the business of the parties. The word ‘confidentiality’ in a non-disclosure agreement can be determined by the receiving party or by the disclosing party.

In a disclosure agreement, a disclosing party shall inform the receiving party of what can be called the confidential information under the contract to ensure that the other party shall not share the information with the unauthorized party or utilize the same for other purposes. Both the parties shall be at the liberty to decide what information can be considered confidential under the contract. The information which is not publicly available and is not intended to be shared with any third party then such information can be regarded as confidential. The contract between the parties is built on trust and confidence.

Recently, the Bombay High Court ruled that the right to carry on a competing business does not extend and cannot extend to the illegal use of another party’s confidential information or data. So the decision of the court had utmost importance to govern the misuse of confidential information of the party.

Laws for setting up a business in India

Starting a new business is more challenging nowadays. There are several legal formalities to be required to follow for both new as well as established businesses. Some of these formalities are financial regulations, employment law regulation as well as the tax obligations which are important to the functioning of every business in India.

Entrepreneurs are the individuals who start a new business bearing the risks and enjoying most of the rewards. The process of setting up a business is well known as entrepreneurship. The beginning of this journey starts with raising funds and creating a business plan which are the topmost priorities of the start-ups. But before setting up a business in an Indian dimension entrepreneurs must understand that business must be legal and abide by the laws for business made by the government.

There are certain laws to keep in mind prior to setting up a business in India.

Forming a business structure: The decision of formalizing the business structure is crucial as it must consist of the ideas and purpose of the business. So before starting any business, we have to determine the nature and type of business. The different types of business include sole proprietorship, private limited, public limited, partnership liability.
Licensing and Registrations: After the selection of the nature and type of business, the entrepreneurs must be aware of the types of licenses according to their nature of business. In the absence of relevant licenses, the business may have to face legal penalties.

Shop and Establishment Act– the Act is regulated by the department of labour and commonly applies to all businesses. It regulates the area where the business is carried out and various aspects such as working hours, maternity leave, rest interval of employees, etc.
General registrations– Permanent Account Number, GST registration, tax account number, bank account;
Other specialized registration include IEC code (for importing and export), FSSAI license (Food business), kosher registration (for kosher goods); and
Other types of licenses for different businesses.

Taxation and Accounting laws- Taxes are a vital part of any business in India. There are wide varieties of taxes such as central tax, state tax, and even local taxes that apply to some businesses. A person should be aware of the different types that are applicable for different types of businesses. There are various initiatives launched by the Central Government for ‘start-up businesses’ to promote start-up by means of various exemptions and tax holidays.

As per the new guidelines for business laid down by the ‘start-up India’ program any business eligible to be a start-up is exempted from taxes for three consecutive years. Therefore, the entire knowledge about taxes can prove to be convenient for the growth and expansion of a business.

Labour laws: The labour laws are part of every business in India. These laws govern various issues such as minimum wages, bonus payment, maternity leave, provident funds, etc. The Ministry of Labour and Employment had planned to implement the new labour codes to protect the issues related to health and working conditions, wages of employees, social security and maternity benefits, etc. The new labour codes are:

Intellectual Property Rights

Intellectual property law deals with the right to protect the business from any theft of personal data and information. These rights include copyright, trademark, patents, and trade secrets. If a company developed something innovative and faced tough competition in the market. This will protect the company’s ideas, formula from copying.

In addition to this new start-up program laid down new laws like SIPP (start-ups Intellectual Property Protection). Now the start-ups can take the advantage of this scheme under start-up to nurture new innovative and emerging technologies and help in due protection and commercialization.

Taking care of contracts: An agreement that is enforceable by law is a contract. The contract proved to be very effective for the proper functioning of a business. A contract is a valid contract only if it satisfies the conditions of Section 10 of the Indian Contract Act, 1872. As per the rules mentioned for a valid contract, it must be the free consent of parties, a lawful consideration with a lawful object and must be not explicitly declared to be void.
Others laws

The Companies Act, 2013 includes the provision regarding acquisitions and mergers, corporate social responsibility, decision-making, related party transactions, and shareholders. The Act was further amended by the Parliament in 2015 which eliminated procedural common seal, declarations for commencement of businesses, and minimum paid capital.
Business laws in India also include the protection of consumer rights. The Consumer Protection Act, 1986 was introduced by the parliament to protect the interests of consumers and safeguards against different types of exploitation such as defective goods, deficiency in services, and unfair trade practices.
The Foreign Trade (Development and Registration) Act, 1992 Act provides for the development and regulation of foreign trade by facilitating imports and augment exports.
The Information Technology Act, 2000 is the first law for e-commerce business in India. Due to the expansion of online business, it has become important to create laws to cover cyber law and security in India.

Definition of confidential objects

The term confidence originates from the Latin word fidere which means to trust. Warren Brandeis was the primary model (1890) to give birth or so to say that they were the ‘investors’ to the concept of privacy. Prior to this, it was only a pearl of ethical judicial wisdom but then it was placed as a whole new chapter in law books.

The confidential clause is well known to protect the originality of work from being misused by any unauthorized persons. It is not only known to protect the rights of the parties but also encourages the free flow of information under the pretence of protection provided under the contract.

‘When one person shares any material information which is not in the public and does not intend to be shared with any unauthorized person then such information can be understood as confidential and if any such information is leaked by the confidant of the information, then there shall be a breach’.

Confidential relationship

In India, the principle of confidentiality comes from English law. In a confidential relationship, one party shares important information with the other party by showing the truth and confidence that the shared information will not be disclosed to any unauthorized person. As per the definition of Thomas M. Cooley “the relations formed by protocol or by acceptance, in which one party trusts his pecuniary and other interests to the loyalty and integrity of another party, by whom, either alone, or in conjunction with himself, he expects them to be protected” is defined as a confidential relationship. To protect the susceptibility of the parties, a backing of the law was required in order to impose liability for a violation of breach of confidence.

Why is there a need for confidentiality clause in an agreement?

There are various reasons to enter into an agreement with confidentiality clause such as:

To avoid confusion over what the parties considered to be confidential information.
To allow more flexibility in defining the confidential information to the parties.
Enforcing written contracts is easier than oral agreements.
Covering the issues related to confidentiality, such as non-solicitation.
To maintain the correct standards that are expected in most commercial transactions and relationships.

Confidentiality obligation

The obligation to keep the confidential relationship arose from the kind of relationship shared between the parties. When there is no contract, the relationship ‘shared’ gives the information and thereby imposes an obligation on the part not to disclose the shared information to the third party, the intention becomes one of the important parts of a contract. Before entering into a contract, the party holding the confidential information must clarify the motive or intention to the contracting party not to disclose the shared information expressed as confidential with any unauthorized party.

The information to be recognized as confidential must involve the following features:

It should accurately identify the shared information.
It should contain the clause of confidence.
It should be endowed on the defendant to maintain the secrecy of non-disclosed information.
There lies an actual misuse of the shared information.

The rights and obligations of the parties must be defined concisely. It is to be ensured that both the parties are well-informed about their position and the information shared with them. A party to the contract is under the obligation not to use the confidentiality clause against the other. Therefore, both parties are consensually agreed to share and keep the shared information confidential.

So, a well-defined obligation enhances the responsibilities of the parties to a contract and aids in following the mistakes committed by the parties.

Exclusion

The clause of confidential information shall exclude information or material that:

Is publicly available through no action or fault of the recipient party.
Was already in the possession of recipient party or known to recipient party before being disclosed or provided by the recipient party or on behalf of another party given that source of such information is not bound by any contractual, legal or fiduciary obligation of confidentiality to the non-disclosing party or any other party thereto.
Is obtained by the recipient party from a third party.
Is completely obtained by the recipient party without reference to the confidential object.

Ownerships

All the confidential shared information of a party shall remain the sole property of such party and no title, right or interest in or any confidential information or any material therefrom is transferred to the recipient party.

Mutual non-disclosure agreement

A mutual non-disclosure agreement is also known as a mutual confidentiality agreement. The mutual non-disclosure agreement is a legal agreement, where the parties agreed not to disclose any information with the third party. Trade secrets, intellectual property, or any other proprietary information are such kinds of information that shall be protected by the agreement. There exists a confidential relationship between the parties under the contract.

A confidentiality clause in an agreement is a sensitive issue, the essence of the clause should be prepared only after weighing the balance of convenience of both parties. A party to the contract is under the obligation for not disclosing the shared information to the third party. If any hint of confidential information is dropped by the confidant of the information, then there shall lay a breach in a contract.

There are few kinds of information that the disclosing party shall determine to be confidential under the mutual non-disclosure agreement are:

Trade secrets;
Financial information;
Product formula;
Intellectual property;
Marketing and business plan;
Information regarding product development;
Any other type of proprietary information.

Purpose of a mutual non-disclosure agreement

The major purpose of entering into the non-disclosure agreement is to uphold the originality of the work of the party who is sharing the information with the other party in confidence. It also protects the vulnerability of the party that discloses the information from the third-party usage of its original work. The party who gives consent draws the intention to not disclose the information which is shared in confidence to any unauthorized party or person and so at the time of the dispute, the party cannot question the status of confidentiality of information.

Right to privacy

The right to privacy is protected as an intrinsic part of the right to life and personal liberty under Article 21 and as a part of the freedoms guaranteed under Part lll of the Indian Constitution. The term privacy and confidentiality are interchangeably often used in everyday lives. While confidentiality is an ethical duty, privacy is a right rooted in the common law. The term confidential information is defined as ‘entrusted with confidence of another or with his secret affairs or purposes; intended to be confident or kept secret’. The fundamentals of confidentiality are acquired from English Law. The English law did not recognize the general right to privacy but instead focused on representing the actionable breach of confidence.

When one party shares an important piece of information to the other party beholding a trust on them that the shared information must not be disclosed to any third party but if the confidant of the information disclosed the shared information with the third party there is an infringement of that party’s right to privacy.

Case laws

Zee Telefilms Ltd. v. Sundial Communications Ltd. (2003)

In this case, the plaintiff was a company involved in the business of video and television programming etc. which developed the concept which was firstly titled as ‘Kanahiya’ and registered in the year 2002. The plaintiff intended to further develop the concept to broadcast as a television show. And, therefore they approached the defendant and explained the idea through notes, audio-visual presentations, pilot plots of the concept, etc. There was a clear understanding between parties that the work was an original one and the defendant should not breach the confidence by sharing or using the materials.

Later on, the defendant started working on the same idea and developed their own show based on the plaintiff’s concept. The plaintiff approached the court stating that there was a clear violation of confidence and infringement of their copyright. The Court held that the rule of confidence is broader than that of copyright, the claim of copyright can only be used when the work has been reduced down to a permanent form or otherwise not. The concept of copyright is good against the whole world but the concept of the confidence is operative when the information is disclosed to a particular person in good faith, either oral or written forms of communications. The Court ruled that it is clearly a breach of confidence and so ruled in favour of the plaintiff.

Anindya Mukherjee v. Clean Coats Pvt. Ltd. (2010)

In this case, the petitioner challenged the award of the sole arbitrator where the petitioner was punished with a fine of Rs. 9,40,167.50. The petitioner was appointed as a senior sales executive and promoted as Manager, Project and Sales in the Marketing Department. The respondent entered into an employment agreement with the petitioner that contained the confidentiality clause, wherein it was expressly declared that the petitioner will not disclose the shared information with the third party. It was also stated that the petitioner will not indulge into or start a similar business as that of the respondent for a minimum period of 24 months from the date of resignation or termination.

The Court opined that the relationship between employer and employee contains the elements of commerce and business. And so, any breach of confidence committed by the employee will amount to misconduct and the employer will take legal action against it. The Court ruled in favour of the respondent and directed the petitioner to pay a fine of Rs. 1,00,000 as compensation to the respondent.

Daniel Corus BV v. SAIL (2017)

In this case, the petitioner party entered into a contract to install Blast Furnace N0.5 at the Rourkela Steel Plant of the respondent. The petitioner’s company shared documents, drawings, and other information which were confidential in nature to the respondent. To uphold the purpose of maintaining confidentiality, the parties included the relevant clauses and sub-clauses in the agreement.

The confidentiality clause mentioned that the drawings and other information provided were strictly to be used for the purpose of the present contract and shall not be shared with any third party. The petitioner claimed that the information which was confidential in nature was shared by the respondent with the third party and hence breaching the confidence. The Delhi High Court ruled in favour of the petitioner party, affirming that when both the parties treated an agreement to be confidential in nature, then both the parties are bound to it, notwithstanding the fact that the law permits the parties to claim confidentiality or not.

Conclusion

The confidentiality clauses in non-disclosure agreements have now become an important legal framework to protect the originality and sensitivity of the confidential information from being made available by the recipient of that information. One of the problems that arise with the confidential agreement is the difficulty in determining the various aspects covered under the contract or not. This problem can arise if the said agreement has not been drafted properly in a manner that can reduce the uncertainty. A badly drafted agreement can cause the companies to enter into long litigation battles which can make them pay a lot of costs as well. Confidential information is not something that can be made publicly available.

The term confidentiality propagates inaccessibility and therefore irrespective of the mode in which the confidentiality is recovered by the receiver, he shall be held in breach of confidentiality. A secret does not cease to remain secret when one selects to share it with the intended one and yet it remains a secret for the rest of the world. Hence, the right of the party to indulge in competing business cannot extend to the illegal use of another’s party confidential information and data.

References

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Analysing the CSR clause in investment treaties

By

Shoronya Banerjee

-

August 23, 2021

0

CSR — Image Source: https://bit.ly/2zGT3eP

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

Table of Contents

Introduction

Corporate Social Responsibility (CSR) is a term that considers the social, environmental, and economic effects of a company’s actions, including its supply and value chains. CSR is a term that has acquired popularity not just in the socio-environmental interplay of corporate activity within a state, but also in international investment law. On the basis of internationally established standards and principles, CSR programmers seek methods to ensure firms may be held accountable for these impacts. CSR has been established by international agencies such as the Organisation for Economic Co-operation and Development (with the OECD Guidelines for Multinational Enterprises) and the United Nations (with the Human Rights Council’s Guiding Principles on Business and Human Rights). It was originally founded on the sovereign ethics of multinational enterprises. These soft-law instruments were created in tandem with hard-law investment treaties, which offer foreign investors rights under international law.

Recent trade agreements and Bilateral Investment Treaties (BITs), such as the Trans-Pacific Partnership (TPP), the EU-Canada Comprehensive Economic and Trade Agreement (CETA), the EU-Vietnam Free Trade Agreement, or the Canada-Burkina Faso Foreign Investment Promotion and Protection Agreement (FIPA), to name a few, explicitly mention CSR. Unfortunately, CSR terms in trade and investment agreements, are still in their infancy. On the contrary, the vast majority of agreements make no mention of CSR. However, a new generation of investment policies has arisen during the last ten years, signaling the commencement of a shift in investment treaty-making. Recently, a growing number of countries and regions have begun to include CSR language in their trade and investment agreements in recent years.

A classification of CSR clauses as seen in investment treaties

It’s worth noting that in Investor-State Dispute Settlement (ISDS) proceedings, tribunals have given little or no weight to treaties and responsibilities that aren’t directly relevant to the investment at issue, primarily due to a lack of jurisdiction to hear them and so to address this problem, the countries have recently adopted the practice of inserting CSR clauses in their international investment agreements (IIAs), by means of treaties. In recent years, investment law has incorporated CSR, either implicitly or explicitly.

The first group comprises clauses that encourage firms to self-regulate to the extent possible while the second group includes terms that say that CSR is within the jurisdiction of the home and host countries of overseas investors and the third, and the most recent, group includes terms in which authorities expressly demand investors to adhere to human rights or environmental duties.

Clauses in the first two categories envision MultiNational Enterprises(MNEs) or domestic laws organising CSR on their own (mainly host state laws) and they are referred to as indirect clauses because they create intermediary devices for regulating foreign investors’ business behavior, either through MNEs’ own policies or through host countries’ domestic legal systems. Direct CSR clauses, on the other hand, are designed to make foreign investors accountable by establishing the rules that govern their actions.

Direct CSR clauses : a method of defining international commitments for investors

Traditional investment treaties’ major goal is to offer rights to foreign investors rather than impose responsibilities on them; hence there aren’t many of them. This goal of investment treaties explains why direct clauses are frequently written in a poor manner. Article 24 of the Pan-African Investment Code (PAIC) uses conditional verbs (“should”) to encourage investors to comply with internationally recognized human rights legislation, while imperative verbs (“shall”) are employed to prevent corruption (Article 21). Article 17 of the Argentina-Japan Bilateral Investment Treaty of 2018 requires host-States to encourage investors to implement CSR principles into their internal policies on a voluntary basis. Similarly, all of the requirements of Article 24 of the Morocco-Nigeria BIT 2016 contain the phrase “strive to.” As bold as these regulations may appear, their implementation and enforcement may, at best, be a stab in the dark. As ambitious as these rules may appear, their implementation and enforcement may at best be a stab in the dark before an arbitral tribunal, and the reason for this is not far-fetched. Direct sentences can be rather weak in substance if conditional verbs are not utilized. Some people only remember one of the Salini test’s criteria: that investors must contribute to the host country’s development. This is the situation with Article 22(2) of the Draft PAIC, headed Corporate Social Responsibility: A Framework for Action.

Investors shall, in pursuit of their economic objectives, ensure that they do not conflict with the social and economic development objectives of host States and shall be sensitive to such objectives. In other words, the host-State would have to present evidence demonstrating that the investor has failed to take all reasonable steps to uphold the treaty’s provisions in good faith. This requires considering the numerous options accessible to the investor at the time of treaty compliance and determining whether the option chosen is the best at that point in time. This burden of proof is not only heavy but also impossible to bear. In this situation, it is not uncommon for an investor to seek a way out of the obligation.

Indirect clause : a way of protecting host countries’ power

The majority of CSR clauses are indirect clauses, portraying CSR as a self-regulatory mechanism that both the home and host states should encourage. This section does not impose direct CSR duties on foreign investors, but it does utilize careful language to express the Parties’ agreement to “urge” investors to follow CSR guidelines. In recent years, there has been a noticeable trend in Canadian, Brazilian, and EU treaty-making practices to include CSR elements in investment agreements.

Inclusion of CSR clause in some investment agreements around the world

In recent years, Canada has incorporated CSR standards into its investment treaties. The 2013 Benin-Canada BIT, for example, lists “national treatment, most-favored-nation treatment, minimum standard of treatment, compensation for losses, compensation for expropriation, transparency, subrogation, and corporate social responsibility” as “Guiding Principles” of the contracting parties’ obligations. The parties are required by Article 16 of this BIT, designated “Corporate Social Responsibility,” to encourage firms in their territory to adhere to internationally recognized CSR norms. It contains the following features:

‘Each Contracting Party should encourage enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate internationally recognized standards of corporate social responsibility in their practices and internal policies, such as statements of principle that have been endorsed or are supported by the Contracting Parties. These principles address issues such as labor, the environment, human rights, community relations, and anti-corruption.’ Despite the fact that the provision has a soft character by using the terms ‘encourage’ and ‘voluntarily,’ and that the CSR provision cannot form the basis for a claim raised by a foreign investor against the host state in investment arbitration, this CSR provision marks a start of incorporating soft ICSR terms into hard international investment treaties. Article 16 of the 2014 Canada-Senegal Bilateral Investment Treaty (BIT) has a unique wording that not only requires states to encourage CSR commitments by businesses but also directly encourages them to “make investments whose impacts contribute to the resolution of social problems and the preservation of the environment.”

Brazil signed a number of Investment Cooperation and Facilitation Agreements in 2015. (ACFIs) where the ACFIs are concerned with facilitating investment and mitigating risk. Rather than imposing CSR duties on State Parties, most Brazilian ACFIs impose them directly on investors like the CSR provisions in the 2015 Brazil-Angola ACFI, the 2015 Brazil-Mozambique ACFI, the 2015 Brazil-Malawi ACFI, and the 2015 Brazil-Mexico where ACFI require ‘investors and their investments’ to strive for the highest possible level of contribution to the host state’s and local community’s sustainable development.

In 2011, the European Parliament passed a resolution on the future of European investment policy, calling for a corporate social responsibility clause to be included in every free trade agreement the EU signs. In recent years, the EU has added CSR provisions in freshly completed Association Agreements and Free-Trade Agreements, in line with this policy (FTAs). However, these treatises are few and far apart. Canada, Brazil, and EU like all other nations in the world are yet to find the right balance as they every now and then tend to take the softer path and move away from the examples set by themselves.

The enforcement of investor obligations through counterclaims

In theory, an International Investment Agreement (IIA) prohibits a host state from bringing arbitration procedures against an investor whereas a respondent state can, bring a counterclaim against an investment, asking financial compensation, under several IIAs but the counterclaims filed by a state should be related to the investor’s primary claim against the state. In principle, the ability to file a counterclaim allows a state to address the asymmetrical character of investment treaties by bringing direct claims against investors for violations, such as human rights violations. States haven’t used the counterclaims process too much in practice. This is due to a number of factors. To begin with, the vast majority of IIAs do not include any counterclaims provisions that states can invoke. Second, host-state counterclaims are rarely accepted by investment courts. The jurisdictional standards for filing a counterclaim have proven to be difficult for states to meet. This explains why the tribunal has only found jurisdiction over the state’s human rights counterclaim in one case, Urbaser v. Argentina. The tribunal in Urbaser v. Argentina deviated from earlier precedent by holding that a factual link between the claim and the counterclaim is sufficient to establish a connection between the claims. To this end, the tribunal underlined that ‘the principal claim and the claim opposed to it are based on the same investment, or the alleged lack of sufficient investment, in relation to the same Concession. This would be sufficient to adopt jurisdiction over the counterclaim as well. The counterclaim decision in Urbaser v. Argentina has significant ramifications for businesses where the Urbaser tribunal demonstrated with this ruling that host state counterclaims against investors based on human rights abuses may fall under the jurisdiction of investment tribunals. It made it apparent that firms cannot avoid culpability by claiming that they are not subject to international law.

Challenges of interpreting and enforcing CSR provisions in investment treaties

Even though it has been proposed that CSR standards can be considered as a sort of compensation for investment treaties’ main goal of investor protection, there are a number of challenges with the interpretation and execution of these CSR provisions, as evidenced by the Urbaser v. Argentina judgment, which is rare in the international circuit. To begin with, investment treaties are mostly triangular agreements that require State Parties to protect foreign investors as third-party beneficiaries. Including CSR elements in investment, treaties defeat the purpose of investment treaties by imposing obligations on both host countries and international investors. Second, unlike investment responsibilities, which are considered “hard law,” most CSR norms in international instruments are considered “soft law” because of their non-binding and voluntary nature, as well as the lack of an efficient enforcement mechanism. This makes it absolutely difficult to strictly enforce the CSR clause in investment treatise. Finally, because of the ambiguous concept of CSR, the tribunals find difficulty in interpreting these CSR rules. Before enforcing the CSR clause in investment treaties, these difficulties must be resolved first.

Conclusion

Canada, Brazil, and the EU have no doubt shown the world a possible solution to the existing problem. This is of course a step in the right direction, however, we are still far away from reaching an ideal situation where all investment treaties around the world will include CSR clause in such a way that it is enforceable. The above-mentioned three countries have shown the path and now others need to follow and come up with a permanent solution. In order to do so, we will have to do away with the soft terms like ‘highest possible level’ ‘seek to ensure’ or ‘do their best.’ It is also absolutely essential that the international arbitration community undertakes the needed policy reform.

References

https://investmentandcommercialarbitrationreview.com/2020/11/corporate-social-responsibility-clauses-in-investment-treaties-a-panacea-or-a-plague/
https://www.somo.nl/wp-content/uploads/2005/12/Investment-agreements-and-Corporate-Social-Responsibility.pdf
https://www.iisd.org/itn/en/2018/12/21/corporate-social-responsibility-clauses-in-investment-treaties-laurence-dubin/
file:///C:/Users/sangeetachoudhury/Downloads/441-1185-1-PB%20(5).pdf
Recent trade agreements and BITs, such as the Trans-Pacific Partnership (TPP),19 the EU-Canada Comprehensive Economic and Trade Agreement (CETA), the EU-Vietnam Free Trade Agreement, or the Canada-Burkina Faso Foreign Investment Promotion and Protection Agreement (FIPA), to name a few, explicitly mention CSR.
https://investmentandcommercialarbitrationreview.com/2020/11/corporate-social-responsibility-clauses-in-investment-treaties-a-panacea-or-a-plague/
https://www.iisd.org/itn/en/2018/12/21/corporate-social-responsibility-clauses-in-investment-treaties-laurence-dubin/
https://investmentandcommercialarbitrationreview.com/2020/11/corporate-social-responsibility-clauses-in-investment-treaties-a-panacea-or-a-plague/
https://edisciplinas.usp.br/pluginfile.php/4424957/mod_resource/content/1/Corporate%20social%20responsibility%20and%20investment_Ying%20Zhu.pdf
https://edisciplinas.usp.br/pluginfile.php/4424957/mod_resource/content/1/Corporate%20social%20responsibility%20and%20investment_Ying%20Zhu.pdf
M. Moïse Mbengue & S. Schacherer, ‘The ‘Africanization’ of International Investment Law: The Pan-African Investment Code and the Reform of the International Investment Regime’, (2017) 18 Journal of World and Investment & Trade, no.1
https://edisciplinas.usp.br/pluginfile.php/4424957/mod_resource/content/1/Corporate%20social%20responsibility%20and%20investment_Ying%20Zhu.pdf

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Freedom of speech for terrorists : a critical analysis

By

Diganth Raj Sehgal

-

August 23, 2021

0

OIP (1) — Image Source: https://bit.ly/3gqgobg

This article is written by Shubhangi Agrawal, from Hidayatullah National Law University, Raipur (C.G.). This article talks about how government power influences freedom of speech and how it hinders fundamental human rights.

Table of Contents

Introduction

Last year in 2020, the Philippines introduced a law for anti-terrorism, which gave the government a right to eliminate, detain and label people within a vague definition of “terrorism.” In the current scenario of uncertainty and various attacks against human rights, this law gave the government unchecked powers to arrest people without warrants and keep people detained for weeks before they could be presented in court. This law is broad enough to categorize the social media post under this, but also it includes criminal offences for inciting people to perform anti-national activities.

While the government claims the main aim behind the introduction of this law is protecting and safeguarding human rights, this law has made them even more vulnerable. The law is against the international human rights law and restricts the working of the law in the country.

All these similar policies injected by the government in the name of increasing terrorism protect us or restrict us from expressing our opinions. Can we say that we have freedom of speech and expression, which is a human right at both the national and the international levels? This is an increasing matter of concern and we should have a look at it.

Freedom of speech – a fundamental human right

Freedom of speech is a right granted under Article 19 of the Indian Constitution that is available to all the citizens of the country, and it states that every citizen has the right to freedom of speech and expression. This is a right that is crucial to ensure that every citizen has a right to express their thoughts and expression through any medium of expression or social media, whatever one chooses to.

The right is not absolute and is subject to restrictions if the restrictions are for the interest of the society and security of the country or are restricted by the order of the court. Freedom of speech also includes freedom of the press, freedom of commercial speech, right to criticize, right to information, and right not to speak or be silent. However, all these can be restricted by certain limitations.

The International Covenant on Civil and Political Rights (ICCPR) also has mentioned under Article 19 that “everyone has the right to hold their opinions without any interference.” Further, Article 19(1) states that this right will include “the freedom to seek, impart and receive information and ideas of any kinds, which can be oral, in writing or in print or any other form which one chooses to of their choice.” ICCPR has further commented that the freedom of speech can never be suspended, not even in the case of an emergency. Freedom of speech is considered an element that cannot be curtailed since it can never be deviated from, even in case of emergency.

The restrictions permissible on this right as per ICCPR are provided by law under Article 19(3), and where ever necessary, the right may be made to “respect the right and reputation of others” or “for the national security.” Any unreasonable restriction on the rights of the people is not permissible; the restriction must be in line with Article 19(3) and should be proved lawful under the same. Where Article 19 provides the government to restrict speech but conditions imposed to it is that the above terms are satisfied. Article 20, for the same law, mentions the prohibition of expression altogether, that is prohibiting anything which under the law “any advocacy of national, racial or religious hatred done to incite discrimination, hostility or violence.”

Both these Articles agree with each other as any action restricted under Article 20 must also fall under Article 19 to be justified as a limitation to the right. The point mentioned in all laws is that freedom of speech can be restricted subject to the country’s law, security, etc., of the country. The insight that can be obtained is what about people who are not declared guilty but are under suspicion of doing these acts. What is the basic human right of speech to a terrorist?

Controlling freedom of speech through terrorism

Terrorism is a defeat in a democratic society that is highly undesirable and is the against the vital public interest. While putting a break in these acts is necessary, not all measures used to do so will have a justified reason. The introduction of anti-terrorism laws in various countries aftermath of significant terrorist attacks has somehow curtailed the basic functioning of the freedom of speech and expression.

For years the government has been controlling the speech of people who are suspected of acts of terrorism and keep them detained for weeks and months. The government has been doing several activities of surveillance and detention in the name of counter-terrorism, which leads to the defeat of the rights, especially the right to life, prohibition of human torture or inhuman behaviour, right to liberty, and security. Harming human rights in the acts of curtailing the vicious terrorist attacks and terrorists may even help to fulfil their cause. The government and the executive have the power to hold the values that we require to preserve from the terrorists who are trying to destroy the same.

The need for discussion

In the modern era, human rights have been politicized by most of the countries at an international level but these international voices also don’t care about rights. Nevertheless, we see human rights as an agenda that is falling during tough times. In a world where there is the rule of Islam, there is still a lack of equality for women, equal religion, and political freedom. The model of development which China follows is a comeback of political repression and economic liberalism that has also attracted various developing world countries to admire and adopt the same policy. The countries like Russia, Turkey, and when insular having political authoritarianism also backlogged in exhibit LGBT rights that have taken place before in many diverse countries. The campaigns for human rights which people used to perform in old traditions have flooded all over the society. These traditional approaches like slavery continues to exist. A recent report estimated that there are almost 30 million people who are forced to work against their will.

In times like this, the violation of human rights is still widespread, with human rights continuously flourishing. The use of human rights in the books has increased many times compared to the last centuries. It has been used more with words like constitutional and natural rights. People have criticized the government in recent decades which is becoming a distinctive item of human rights.

Government’s fear – a source of infringement of a basic human right

To look upon the July 2013 case of a bricklayer living in Rio de Janeiro, he was arrested and was never seen again, this matter was all among the people of the city. His disappearance was seen as a ruthless police response. The people pressured the government for investigation, which led to the arrest of 10 police officers, who were then charged for murdering and torturing the person. Furthermore, another factor is that Brazil, being one of the largest democracies in the world, is among the major countries that violate human rights. Every year thousands of people are killed by the police through executions.

These killings are the acts that are prohibited under human rights laws, and it is a matter of practice that is being in the official policies. Not only Brazil is such a country where this takes place, but this also includes other countries like India, South Africa, Iran, etc. These countries are suspected of criminals disappearing before formally getting charged or appearing in court. The judiciary or court system here is underfunded, and the pressure to combat crime is very much high which leads to employing extrajudicial methods by the police in the form of torture to extract a confession.

The reforms required

Throughout development and the increased cases of false governing, pointers have been set that the court should keep in might while governing-

A few rights are being collectively mentioned under Article 4 of ICCPR, which cannot be suspended even in an emergency.
The various left-out rights can be set aside by the condition mentioned in international human rights laws. Freedom of speech and expression can only be restricted in case the condition of restriction is being met as per Article 19(3).
If human rights are being violated, which is done with misuse or abuse in the name of national security or counter-terrorism powers, effective remedies should be made available to the individual, which should be in proportion to the amount of damage suffered. This is another approach mentioned in Article 2(3) of ICCPR, which states that any human being whose human rights are violated has a right to have an effective remedy for such violation.
The charges against any person committed to terrorism or harming national security must be decided by the judiciary and not politicians or public opinions or by the media.

These are a few steps and recommendations which the international body has taken which every country must add to avoid any unconstitutional killing for arrest. In the name of counter-terrorism activities infringement of the basic human rights of the people who are only suspected for the act and have not been declared as guilty by the court. The human rights of every person are protected until and unless they are proven guilty or prohibited by the law. This can only be done when the guilty person is presented before the law but a more concerning matter is that these cases happen even before the person has appeared before the court of law

Conclusion

The hard conclusion to avoid is that the government is still contributing to the violation of human rights, the example we have seen of Brazil. There are more examples of countries, somewhere around 150, that engage in torture. Why has the number of authoritarian countries increased so much? Why do women remain a subordinate class? Why do children continue to work? The truth is that human rights have not accomplished what they should have. The objectives of the law are still not made by the government. There is very little evidence that the human rights treaties being agreed upon internationally have improved the well-being of the people. The reason is that human rights were never a universal thing that people had and believed they could only be forced upon by the international authorities.

The step which can be done to avoid the human rights violation of anti-terrorism law is – there must be a protocol, early commission for the vigilance of adoption of new anti-terrorism legislation. This should be subjected to human rights proofing and then provided that democratic oversight of security services must be done with proper analysis and recommendations than by the specialized people. Through this assistance in the topics with the authorities, it should regularly focus on the human rights safeguarding and not a violation.

References

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Analysing the impact of artificial intelligence on psychological contracts

By

Abanti Bose

-

August 23, 2021

0

This article is written by Chaithra Lakshminarayan, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho.

Table of Contents

Introduction

Artificial intelligence (for brevity, “AI”) refers to machines that imitate human intelligence to do certain tasks. AI beholds the intelligence to improve themselves based on the data they collect. In this millennium, where start-ups are transforming business culture and AI has been assisting them to bring in vital changes through chatbots, butterfly buttons in digital marketing, blockchain technology in the transaction world and so on and so forth. It is just not in the business sector but also in the field of law, AI has been bringing multiple changes. AI is now helping businesses to overcome hurdles in contracting. AI is being programmed to think, learn, reason, experience and function autonomously, without supervision. By deploying AI in business, without a proper plan there are all possibilities for it to go negative and reduce human resources in business which can affect the work environment and also the psychological contracts that are already in existence between employer-employees.

In this article, the readers would learn more about what AI is all about? The importance of AI in the business sector. In addition, the use of AI in contract law, the author would also explain the meaning of psychological contracts, the importance of psychological contracts and the impact of AI in psychological contracts.

Artificial intelligence in the business sector

Before we dive into the concept of AI in the business sector. It is important to understand why companies should use AI? In this 21st century although human resource still dominates the world the complexity involved in tasks has grown many folds. It is just not that the extent of stress and account of inefficiency has equally grown too. This is just because the extent of data we hold has increased. It is now not humanly possible to maintain the data securely and attend to every detail of demand that is created in the market. This is where the concept of AI comes in. Using AI in the business sector, companies can now understand and develop unique deliverables and sustain stable growth by reducing operational expenses. The benefits of AI in business include automation of every process, increased revenue, positive results in marketing activities, companies can understand client requirements and cater to their demand, fraud detection, and companies are able to provide improved and more reliable service.

Artificial intelligence in contracts

Contracting although a common activity every company enters into it is one that every company aims to do uniquely, efficiently, or effectively. In fact, it is estimated that contracts that are not up to the mark cause firms to lose five percent to forty percent of value on a given deal depending on the situation. Now, technological developments like AI are helping companies overcome many hurdles in contracting. The main challenge the companies face in contracting arises from the fact that they are asked to maintain or keep a record of multiple contracts. It is just not that companies find it difficult to organize, manage, update, and maintain uniformity in record keeping. In common, most companies do not have a database to manage. Even if they do have one it takes a lot of human resources to draft, execute, review, revise and improve not only the contracts but also the contracting processes. For instance, a large scale technological company may find it difficult to maintain the volume of procurement contracts alone that may have different renewal dates and renegotiation terms, it would require a lot of labour and teamwork to review and track all the data and to keep track of it to avoid missing out on renewal or opportunity.

What is a psychological contract?

Unlike a formal and codified contract like an employment contract, psychological contracts are an unwritten set of expectations of employment relations. Both the employment contract and psychological contract define the employer-employee relationship. Psychological contracts do evolve and develop constantly over a period of time-based on communication or may change based on lack of communication, between an employer and employee.

A psychological contract concentrates more on the social relationship between employer and employee. One can say, the psychological contracts concentrate more on the social relationship between employer and employees. Rousseau notes that “a psychological contract is an individual’s belief in mutual obligations between that person and another party, such an employer”.

In addition, psychological contracts are ones entered in the initial stage of employment. During the recruitment process, two-way communication occurs through mutual promises and impacts the psychological contract. Further, trust is the key to a psychological contract. So a psychological contract is breached once the trust is broken and the employee thinks that the employer has not stuck to what was promised or vice versa.

There are two types of psychological contracts, which are relational contracts and transactional contracts. Relational contracts are one that can generate feelings of involvement and closeness in the employee and may make the employer commit to the employee indirectly by providing salary with benefits, effective training, and job security. In a transactional contract, monetary value is given importance. Further, in this kind of contract, a sense of involvement in raising income is developed among employees. Furthermore, the employees would have greater concern for remuneration and benefits than for contribution to the organization.

Impact of AI in the psychological contract

AI is considered to affect work and workers. For instance, Huang and Rust (2018) identify four ways of work-related intelligence and analyze how an AI may be more or less suited to replace human beings in related work. Firstly, mechanical intelligence speaks more about the ability to perform routine or repetitive tasks. Secondly, analytical intelligence is more about the ability to process information through problem-solving and learn from it. Thirdly, intuitive intelligence is the ability to think creatively. Lastly, empathetic intelligence, which is the ability to recognize and understand other people’s emotions. On the deployment of AI, there are all possibilities that AI may replace the workforce in tasks that are associated with mechanical and analytical intelligence and may have limited potential in tasks that require intuitive or empathetic intelligence. The adoption of AI weakens the relationship between employee’s job engagement and job trust. However, the pressure to use AI has increased whether it is due to increased levels of competition, consumer preferences, or regulatory requirements. But many studies reveal that workers need to develop positivity while working with AI technology in order to exploit the benefits. Before engaging AI, the company should prepare for the fall before, during, and after engaging AI in their business. Just not that the company needs to prepare the workers through effective communications. In addition, the psychology of each employee varies which needs to also be taken into consideration.

The psychology of a beginner is more concerned with the work and themselves. But an employee with two years of experience may have more expectations and have more needs when compared to a beginner. Married women on the other hand will be more towards planning life with kids and may choose work or plan work accordingly. While an employee nearing retirement may think more about family needs and plan for life after retirement. Therefore, a company while engaging employees and before deploying AI has to consider the kind of human resource the company holds and decide accordingly.

Furthermore, the organization’s expectations change over time and also constantly. For instance, an organization’s expectation varies from what was stated on paper. In the case of Apple, the organization does not want its employees to go on the website or any public domain and comment about Samsung in such a way that might promote Samsung’s business. In addition, Apple expects employees to promote its business even in the employee’s social gathering and even while the employees are with family members. However, these terms are not included in the formal employment contract. These may vary on the adoption of AI as the technologies like AI may replace human resources and may also take up the marketing sphere of a company.

Conclusion

Hence, from the above explanation, we can understand what AI is all about. Its importance and relevance in this generation. Use of AI in business and how businesses are adopting AI. The meaning and importance of psychological contracts. Impact of psychological contracts in this era and the impact of AI in psychological contracts.

References

What is AI? Learn about Artificial Intelligence, https://www.oracle.com/artificial-intelligence/what-is-ai/
What is Artificial Intelligence (AI) in Business? https://www.businessworldit.com/ai/artificial-intelligence-in-business/
How AI is Changing Contracts, https://hbr.org/2018/02/how-ai-is-changing-contracts
What is a Psychological Contract, https://www.hrzone.com/hr-glossary/what-is-a-psychological-contract
Psychological contracts: Effectiveness, implementation, and consequences of breaching them, https://www.ckju.net/en/dossier/psychological-contracts-effectiveness-implementation-consequences-breaching-them
Ashley Braganza, Weifeng Chen, Ana Canhoto, Serap Sap, Productive employment and decent work: the impact of AI adoption on psychological contracts, job engagement, and employee trust, file:///C:/Users/chaithra.l/Downloads/Braganza2020.pdf
Psychological Contracts, https://writepass.com/journal/2016/10/psychological-contracts/
James A. Crowder, Artificial Psychology: The Psychology of AI, http://www.iiisci.org/journal/CV$/sci/pdfs/iZA532FA.pdf
Psychological Contract: What it is, Characteristics and Types with Examples, https://www.transkerja.com/2020/11/psychological-contract-what-it-is-characteristics-and-types-with-examples.html

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All you need to know about the calculation of stamp duty on different instruments

By

Abanti Bose

-

August 23, 2021

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Stamp Duty — Image Source: https://bit.ly/2AMzPWx

This article is written by Kshitij Pandey, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho.

Table of Contents

Introduction

Stamp duty is an indirect tax levied by the state governments on the execution of instruments involving the exchange of movable and immovable properties and the creation of rights or liability on all property transactions. In a simple term, ‘stamp duty’ refers to a tax payable on any transaction for the exchange of documents or execution of instruments, according to the relevant laws by the appropriate government. The earnings from the levy of stamp duty during a financial year are allocated to the state. Though the main objective of enacting the Indian Stamp Act, 1899 was to earn revenue for the government, with the passage of time, the payment for stamp duty has become a means of enhancing legal validity of the document related to transfer of property etc.

Laws in India related to stamp duty

Stamp duty is governed by the Indian Stamp Act, 1899 (ISA,1899). In India, the stamp duty is a state subject. Different states have enacted specific stamp duty Acts, which are applicable in particular states. For example, the Uttar Pradesh Government has made “The U.P. Stamp Act, 2008 (U.P. Act No. 17 of 2010)”. The Maharashtra Stamp Act, 1958 is one of the oldest stamp duty Act by one of the states in our country. The Indian Stamp Act, 1899 and the Maharashtra Stamp Act are the laws used related to stamp duty in India with some changes in most of the states. Though it is mainly a state subject, the central government fixes the stamp duty rates in case of some specific instruments. An instrument/document with paid stamp duty is accepted as a legal document and can be acknowledged by the courts as evidence.

Under the Indian Stamp Act, 1899, stamp duty is levied at the time of execution of the deed. It has no link with the time of transfer of property. The objective is to impose a duty on the instrument, but not to control the actual transaction between the parties.

Applicability of stamp duty

The applicability of stamp duty on specific instruments is governed according to Section 3 of the Indian Stamp Act, 1899. Details of the instruments and the payable stamp duty are given in schedule I-A and Schedule I of this Act. Instruments like affidavit, lease, memorandum and articles of the company, bill of exchange, bond, mortgage, conveyance, receipt, debenture, share, insurance policy, partnership deed, proxy, shares etc. are covered under the Schedules. Through the amendment Act, 1922, Schedule I was inserted. As per provisions under Section 3, stamp duty has to be paid on every instrument executed in India after 1st July, 1899. Similarly, every instrument executed outside India involving any property in India and received in India are liable for stamp duty payment as per the details mentioned in the Schedule. The amount mentioned in Schedule I-A is applicable on the instruments under clauses (a) and (c) executed in the state on or after 1st April, 1922.

The Indian Government through statutes passed by the Parliament can make laws related to stamp duty. The stamp duty rates related to bill of exchange, cheques, transfer of shares, receipts etc. are prescribed by the Government of India and have pan India applicability. On other instruments, state governments have powers to decide stamp duty.

The appropriate government has the power to decrease or to remit whole or part of duties payable under the law. Such reduction or remission can be applicable to whole or part of territories or to a specific set of people. The duties in case of the issue of shares or debentures by companies can also be compounded or consolidated by the government.

In general terms, in our country, the stamp duty is generally applicable on the documents like transfer of property, shares, debentures, bill of exchange, conveyance deed, hire purchase, promissory note and movable and immovable properties. The partnership deed, gift deed, lease agreement, rent agreement, increase in authorized capital, agreement of sale, buying a house, bank guarantee, commercial property, home loan, loan agreement, mortgage, and service apartment are also liable for stamp duty payment. The real estate transactions involving buying, selling, renting, and leasing of a residential or commercial property are also required to pay stamp duty before signing, to ensure the legal validity of the documents before the courts.

Types and mode of stamp papers

There are two types of stamp papers depending on use:

Judicial stamp paper is used in legal and court work,
Non Judicial stamp papers are used for contracts, agreements, registration of documents, leases/sale-purchase transactions etc.

As per Section 10 of the Indian Stamp Act, payment of stamp duty on an instrument needs to be mentioned in the instrument by using stamps as per provisions of the Act. The payment of stamp duty may be in form of;

(a) Adhesive stamps,

(b) Impressed stamps,

(c) Payment of duty in cash.

As per Section 2(11) of the Indian Stamp Act, ‘duly stamped’ indicates that the instrument bears an adhesive or impressed stamp of the required amount and such stamp has been affixed or used in accordance with the law in force.

Stamp duty charges

As stamp duty is mainly a state subject, the charges vary from state to state, except for the specific instruments for which the central government decides the stamp duty rates. There is also a penalty for delayed payment of stamp duty. This may be 2% on a monthly basis (up to 200% of the remaining amount).

Stamp duty mainly depends on the value of the property. The property value again depends on various factors including the circle rate based on the location of the property, property type, year of construction etc. The circle rate is the least value of the property at which it can be registered. These circle rates are fixed by the respective authority, under the state government. The stamp duty in India, normally, varies between 5-8% of the property value. In addition to the stamp duty, about 1% may also be applicable.

Categories of instruments for stamp duty

Though most of the time, it may be easy to calculate the stamp duty, even by using calculators provided by different portals nowadays, in some cases, it may be difficult and may require help from the collector of stamps. The calculation of stamp duty depends on the category of transaction. There are three categories of transactions related to stamp duty calculation.

Fixed stamp duty instruments

In some instruments like administration bond, affidavit, adoption deed, appointment in the execution of power, divorce, apprenticeship deed, award, article of clerkship, cancellation deed, duplicate, charter party, copy of extracts, indemnity bond, power of attorney, etc., the stamp duty does not change depending upon the value of the transaction in the instrument. The stamp duty remains fixed for such types of documents.

Instrument with variable stamp duty

In the instruments like mortgage deed, lease agreement, title deeds, security bond, hypothecation deed, article of association, etc., the stamp duty varies with the transaction value mentioned in the instrument.

Instrument with a market value linked stamp duty

For some instruments, the stamp duty is determined on the basis of the value of the transaction indicated in the document or the correct market value, whichever is higher. Examples of such instruments are gift exchange, conveyance, development agreement, partnership deed, transfer of immovable property, trust deed, partition, agreement for sale etc.

Calculation of stamp duty

According to Section 27 of the Indian Stamp Act, all the facts and circumstances, which can affect the instrument, including the property market value on the date of execution of the instrument must clearly be mentioned in the instrument. The stamp duty calculation is made as on the date of execution of the document and the value of the property on that date, but it does not depend upon the date on which it is produced before the Court or Collector for consideration.

The stamp duty depends on the type of instrument and where the transaction is made. The stamp duty varies from state to state in India. In UP the stamp duty for some instruments mentioned below.

Category 1 : fixed stamp duty

Acknowledgement of debt more than Rs. 1000: Stamp duty is Rs.10
Administration bond: Same as bond subject to a maximum Rs. 200
Affidavit including an affirmation or declaration: Rs. 10
Apprenticeship deed, including service or tuition of any apprentice, clerk or servant to learn any profession, trade or employment with a master: Rs. 20
Company’s article of association: Rs. 500
Enrolment certificate under Advocates Act, 1961, issued by the Bar Council of UP: Rs. 500
An instrument for the ending marriage: Rs.100
Power of Attorney as per Section 2 (xxii) of the UP Stamp Duty Act,2008, without granting power to sell or transfer of immovable property, authorizing family members like grandfather father, grandmother, mother, husband, wife, son, grandson, daughter, real brother, real sister: Rs. 100.
Power of Attorney as per Section 2 (xxii) of the UP Stamp Duty Act,2008, to a person other than mentioned in point 8 above, without authorisation to sell or transfer of immovable property, for a period not more than 2 years: Rs. 5000

Category 2 : variable stamp duty

Agreement or memorandum of an agreement, related to the sale of a bill of exchange and related to the purchase or sale of government security: Rs. 1 for every Rs. 10,000 or part thereof.
The agreement is related to the sale of immovable property. With the provision that if the said agreement is cancelled within three years from the date of execution of the agreement, the stamp duty is refundable with a deduction of 10%, with min. Rs. 100: Rs. 20 for each Rs.1000 mentioned in the instrument.
Agreement relating to deposit of title deeds, hypothecation or pledge for the title to any property, wherein the title has been made by way of security for the repayment of money taken as loan/debt: Rs. 5 for every Rs. 1000 or part of loan/debt.
Appointment in execution of a power of trustees or movable/immovable property, except will: Rs. 50 if the value of the property is up to Rs. 1000 otherwise Rs. 100.
Bank guarantee deed executed by a bank in form of surety against the performance of a contract discharge of liability: Rs. 5 for every Rs. 1000 or part thereof with a ceiling of Max. Rs. 10,000.
Mortgage deed: Rs. 20 for every Rs.1000, for transaction equal to the amount secured by the deed, when possession of the property is given or agreed to be given by the mortgagor: Rs. 5 for every Rs. 1000 or part thereof for the amount secured by the deed, subject to a maximum of Rs. 5,00,000, in other cases
Work contract instrument, to ensure the performance of a contract or discharge of a liability: Rs. 5 for every Rs 1000 or part thereof, of the amount equal to the value secured by such deed, subject to a min. of Rs. 100 and a max. of Rs. 10,00,000

Category 3 : market linked

The agreement related to building, constructed on land by a person other than the owner or lessee of the land with condition that constructed building will be owned jointly or individually by the person constructed building and the owner or lessee of the land: Rs. 20 for every Rs. 1000 or part of the amount mentioned in the agreement or the market value of the concerned immovable property, whichever is greater.
Conveyance including sale or court order or RBI or transfer of share by co-operative housing societies in immovable property from an existing member to a new person for transferring movable/immovable property, which is not otherwise specifically provided for by the Schedule.

For immovable property:
- Rs. 50 for a transaction involving immobile property value mentioned in document or market value not exceeding Rs. 500.
- Rs. 80 for value more than Rs.500 up to Rs. 1000.
- Rs. 80 per 1000 if the value exceeds Rs. 1000.
For immovable property by a registered co-operative housing society: Same as mentioned at a) on 1/2 of the transaction or the market value, whichever is higher.
For transfer of share in immovable property of a present member of the co-operative housing society to any new person: Same as a) on one-half of the transaction value or the market value, whichever is higher

3. Instrument for property exchange, which includes declaration or records of oral exchange or decree of any court: Same as 2a) mentioned above for a transaction equal to the market value of the property. However, if stamp duty was paid on the decree of the court then at the time of execution of an agreement, the stamp duty has to be adjusted against the total duty applicable on such instrument

4. Power of Attorney as per Section 2 (xxii) of the UP Stamp Duty Act,2008,
given to a person other than those mentioned in point 8 under category 1, clause (a) without consideration to sell or otherwise transfer immovable property, for a period
more than 2 years or for an indefinite period: Same as mentioned at 2 a) for the market value of the property.

5. Power of Attorney as per Section 2 (xxii) of the UP Stamp Duty Act, 2008 to any person with authorisation to sell or transfer an immovable property situated in UP.: Same as mentioned at 2 a) for the market value of the property

Conclusion

Stamp duty on a particular instrument is based on the type of instrument and the physical location where this instrument is executed. For some instruments, the stamp duty is fixed for others either depending on the value of the transaction mentioned in the instrument or the market value of the property. These rates are notified by the concerned authorities beforehand through the government. orders or provisions in the concerned Act. The e-stamping has been adopted in the country in order to facilitate accurate calculation, proper accounting of revenue earned by government and for ease of the whole stamp duty process. E-stamping is a very easy way of paying the stamp duty online. Stock Holding Corporation of India Limited (SHCIL) has been designated as the Central Record Keeping Agency for matters related to e-stamping.

Correct calculation of stamp duty is very important keeping in view the fact that an unstamped or insufficiently stamped instrument cannot be considered as evidence in the court of law, even if both parties are agreed. When a document is produced before the court as evidence, the court has to check for the correctness of the stamp, even in absence of any objection by the opposite party. While calculating the stamp duty all the amendments made in the concerned Act must be considered as there have been many amendments in India Stamp Duty Act,1899.

References

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How to draft entertainment contracts for athletes

By

Abanti Bose

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August 23, 2021

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Athlete (1) — Image Source: https://rb.gy/w5efwr

This article is written by Mohd Aman Khan Afghani, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho.

Table of Contents

Introduction

It is a known fact that the entertainment and media industry has seen tremendous growth over the last few years. Professionals who are in the entertainment industry are in need of some level of protection and that protection can only be granted when those professionals have legal agreements so that they can avail the rights and fulfil the obligations they are required to fulfil. As we all know that the economy in the entertainment industry is very uncertain and is also filled with uncertainties. The companies which are involved in the entertainment field continuously merge or dissolve and this adds to the uncertainty.

Professionals in the entertainment industry like athletes, performing artists, and other professionals who are part of the entertainment industry are required to abide by certain legal requirements which govern their profession in the entertainment industry. The laws and legal procedures which are required in the entertainment industry are very unique and cover the broader aspects related to the entertainment industry.

We all can observe another fact that the sports industry is also growing at a fast pace. In today’s scenario, it would not be wrong to say that the sports industry is one of the largest industries in terms of revenue and employment generation.

As far as entertainment contracts for athletes are concerned, they are more or less similar to those contracts which we come across in our everyday routine life. These play the role of binding mutually two parties through an agreement/contract between them. It is pertinent to mention that these above-stated contracts also define the rights and responsibilities between the parties.

Normally these entertainment contracts are express and the parties to the aforesaid contracts give their assent either expressly or impliedly.

Contracts for athletes

Contracts for athletes are not very much different from normal contracts. In these types of contracts for athletes, the athletes are compensated for their services. These contracts are more like personal service contracts as the athletes are going to give their personal service which is very much similar to the performer’s performances. The athlete’s contracts are personal service contracts because no other person than the athlete himself can perform those contracts. The nature of the above type of contracts demands very stringent clauses for the strict upholding of nature and the intent of the parties to such types of contracts.

Some of the important clauses which can form part of the entertainment for athletes

Best efforts clause

This clause puts obligations on the athlete or the sportsperson to give his best efforts in fulfilling their contractual obligations. This clause is more like a clause binding the athlete or the sportsperson to act in good faith. According to the above clause, the athlete would be required to play or perform in the game to the best of his ability and if he can’t perform he has to try to the best of his abilities to perform first. The athlete is supposed to maintain the spirit of the game and that can only be done when he will put his best efforts and will follow the rules of conduct for the particular game. The athlete will not be required to just show up for the game, rather he is supposed to compete with the highest standard of skills which he is going to showcase to the viewers who are watching the game.

Morality clause

It can be a clause in a contract that would specify or set down certain actions or acts which if done by the athlete in his private life would result in termination of the athlete’s contract. These types of clauses were often used in the contracts in order to protect the sporting organizations and also help these sporting organisations to terminate the contracts entered into between them and the athlete if the acts of the athletes are such that would have a negative impact on the sporting organization with which the athlete was engaged. These types of clauses normally contain grounds like a violation of some law or social norms, but at times these types of clauses also restrict the acts or behaviour that deteriorate the brand value.

Bonus incentive clause

For the purpose of ensuring that the best skills of any athlete are being showcased by him on the field, the athletes are being given rewards and incentives. These incentive clauses are mostly in the form of the contingent clause which means that the athlete will get rewards or incentives on the basis of their performance on the field. These types of clauses help in ensuring that the athletes constantly try to give their best performances and try to show their best skills in the arena.

Hazardous activities clause

The activities which are of such a nature that they put the body and physical health of the athlete at risk and also put the destiny of their team in danger are covered by the above type of clauses.

The abovementioned type of clauses help in the mitigation of the chances of injuries to the athletes which would have an impact on their performances. These clauses allow the team or sporting organization to modify the financial obligation of a player or athlete if he gets involved in any activity which is out of the context of their sport and gets injured. These types of clauses are much more in use in today’s scenario and these clauses are used both for deterrence and for punitive measures. The main aim of these clauses is to promote a sense of responsibility among the athletes.

Force majeure clause

Force majeure means any unforeseen or unpredictable natural or human event which is beyond the control of humans. These are such events that render the performance of the contract impossible. These clauses are normally boilerplate clauses that talk about delaying or rescheduling the events in which the athlete is supposed to perform. It is pertinent to mention here that these types of clauses are very seldom invoked or come into play and that too on the occurrence of the events which are covered by the force majeure clause.

Non-compete clause

These clauses are there in order to restrict the athletes or former athletes from joining the organisations which are competing with the organisations of which the athlete was a part.

Transfer clause

We all know that contracts of athletes are in the form of personal service contracts and they cannot be transferred from one athlete to the other athlete in order to fill the position of the initial athlete. But these types of transfer clauses are very much necessary when some professional sporting leagues are contracting with athletes and then allotting that athlete a team. So in the above scenario, the regulating authority transfers their obligation to a team that would buy the services of the athlete in the bidding or auction but that athlete has to follow or comply with the principle of personal service. These types of clauses are mainly used and are essential where the auction format is used. In this, the regulating authority or auctioneer contracts the services of the athlete and then sells those to the teams which are participating in the auction as commodities. The above types of transfer clauses are very much important where the format of the auction is being used for the purpose of selecting the roster of teams. The above transfer clause is also used for inter-team transfer as well.

Liquidated damages clause

Liquidated damages are those damages the extent of which is determined from before. The above type of clause helps the parties to decide among themselves as to what would be the consequences in case there is a breach of contract. The liquidated damages clause is normally added in the contracts so that future disputes or controversies can be avoided but in exceptional situations, the above type of clause also has an impact of punitive nature. When the sports season of the athletes or sports persons is in full force at that time spending time for the purpose of calculating damages would not be that fruitful and therefore the above type of clause should be used extensively as that is when there is an extreme need for using the same.

Termination clause

This clause is a very important clause as it contains the procedure to end the contractual relationship in any type of contract. This is considered to be the most important clause for the purpose of deciding how the contractual relationship will be terminated. It is a very well known fact that contracts of athletes are normally long term but these contracts should also contain the termination clause which can give the option to the parties, i.e., athlete and the other party to end their contractual relationship beforehand if the need for the same arises and in this hardships and controversies between the athlete and the other parties can be avoided and the contractual relationship can come to an end amicably.

Loyalty clause

This type of clause is much similar to the non compete clause. The abovementioned clause prohibits the athletes from engaging in any such activity which can go against the team. This clause puts restrictions on the athletes from engaging and acting in any such thing which can prove to be harmful to the company which has hired them.

Dispute resolution clause

This clause is also very important as it states how disputes will get resolved if they arise between the athlete and the hiring or engaging organisation.

Conclusion

It can be said that the entertainment contracts for athletes are similar to the contracts which we come across in our day to day life but the aim of such contracts is to build a contractual relation between the sporting organization and the athlete in which both the parties are under obligation to perform their part of the contract. The above types of contracts try to mitigate the risk factors and also try to protect both the athletes and the sporting organizations.

References

Kristi E. Swartz, Lawsuit: Thrashers Owners Have Been Trying To Sell Teams Since 2005, (2011) Atlanta Journal Constitution
Matthew J. Parlow, Professional Sports League Commissioners’ Authority and Collective Bargaining, 11 TEX. REV. ENT. & SPORTS L. 179, 185 (2010)
https://www.mondaq.com/india/contract-of-employment/614370/enforceability-of-non-compete-clause39-under-an-employment-agreement
http://sportsbarng.com/morals-clauses-in-professional-player-contracts-their-uses-and-limitations/
Ross GN. The Determination of Bonuses in Professional Sports. The American Economist.(1975) Volume 19 Issue 2
https://www.indialegallive.com/special/force-majeure-clause-an-act-of-god/

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Automatic renewals in B2B contracts

By

Abanti Bose

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August 23, 2021

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Discharge of Surety — Image Source: http://bit.ly/2lH205k

This article is written by Sparsh Chaudhary, pursuing a Diploma in Advanced Contract Drafting, Negotiation, and Dispute Resolution from Lawsikho.

Table of Contents

Introduction

The following article deals with the nuances of B2B contracts. After going through the article, the readers would have a better understanding of B2B contracts and the procedure involving renewals of the same. However, before moving forward with the concept of automatic renewals in B2B contracts, it is imperative that we talk about the definition of a B2B contract. In simple words, a B2B contract means when a business obtains services of another business in order to achieve its goal, the transaction that takes place between both the businesses is known as business to business or B2B. For example, if today Reliance Industries Private Limited takes services of an accountancy firm to audit their business then the transaction between Reliance Industries Private Limited and the accountancy firm would be known as a B2B transaction or contract.

What is the meaning of automatic renewals?

As the name suggests, automatic renewal means when the contract gets another term on the same terms and conditions without taking the explicit consent of both parties. In common parlance, automatic renewals are also known as EverGreen clauses. It is advisable not to confuse between automatic renewals and evergreen clauses as they both aim at providing the same meaning or functioning to a contract. Therefore, it is safe to say that both these terms are interchangeable and hence both have the same meaning in the context of a contract. One might see that the concept of evergreen clauses is more mature and developed in foreign countries such as the USA and UK. However, nowadays the Indian law is also seeing a surge of automatic renewals in the contracts between the business entities.

Since The Indian Contract Act validates the oral agreement between the parties, therefore, in a B2B contract, the automatic renewal clause can be invoked by the parties through their actions or words.

It is important to note that the automatic renewal takes place towards the end of a contract to extend the term of the contract for a certain period of time.

Netflix and other OTT subscriptions

Yes, you read it right. Netflix and other OTT platforms offer their subscriptions to the masses and I am sure that you people are not oblivious to the fact that their subscription gets renewed after the expiry of the subscription cycle that you choose. In other words, we have been getting into the automatic renewals contracts or agreements for quite some time now and these OTT platforms are the prime example of the same.

How are automatic renewals included in B2B contracts?

Since we are done with the meaning of automatic renewals it is now time to discuss how this clause can be incorporated into the contract.

We already know that there are two types of contracts:

Oral contract.
Written contract.

When we talk about the oral contract it is true that the Indian Contract Act validates the oral contract however, it is a task to make it enforceable before a court of law. But as the name suggests, the automatic renewal clause can be included by the parties to the contract by merely agreeing to the automatic renewal clause. But now, in present times, people are very much aware of the downsides of an oral contract and therefore nowadays only a handful of people get into this kind of contract and most people choose to get into a written contract to get some kind of validation and enforceability of the law.

With a written contract the concept of automatic renewal or evergreen clause becomes very much clear and perceivable. In a written contract there has to be a dedicated separate clause for the automatic renewal of a contract and that automatic renewal clause should be carefully and thoroughly drafted by the parties as it can have some kind of major effect on the contract.

For example; A is in the business of manufacturing men’s innerwear and B has approached A to obtain the distributorship of his business. A agrees to it and gives the distributorship to B for a term of 12 months that shall be automatically renewed for another 12 months after the expiry of the initial term and thereafter it shall be renewed automatically for another 12 months till it reaches the 48th month. However, the term of the agreement shall not exceed 48 months. Here the clause of automatic renewal is explicit and agreed by both the parties and therefore is enforceable.

Like I mentioned above, the automatic renewal clause operates at the end of the contract and therefore, it is imperative to keep it in mind in order to review the terms and conditions of the contract if one needs to terminate the contract. Usually what happens is that one party forgets that they are engaged in an auto-renewal contract and therefore they do not pay attention to the termination clause of the contract. It has to be borne in mind that termination notice shall be sent prior to the expiry of the ongoing contract and commencement of the new term of the contract.

Benefits of automatic renewals in B2B contracts

The automatic renewal in a B2B contract offers an opportunity to reap many benefits out of it. The benefits of the automatic renewal contract are as following:

Time-saving

It eliminates the cumbersome process of dwelling on the registration of a new contract. At the same time, it saves money and time for the parties and keeps them involved in the foregoing business transactions.

Negotiation

One of the best parts of the automatic renewal contracts is that the parties do not need to get into negotiation for the same contract all over again. It saves labour and brains of the parties and at the same time provides peace of mind to them.

Stability

This clause also aims at achieving stability amongst the parties so that they can work to achieve their goals with less friction in their business relationship.

Capital gain

The automatic renewal contract clause also helps in achieving good capital gain as it is very little or no negotiation in the contract and the parties are already adapting and adhering to the terms and conditions of the contract.

Disadvantages of automatic renewals

Like any other contract or clause the automatic renewal contract also suffers from various flaws and limitations that are as follows:

Expensive

As we already know that the scope of negotiation in the case of an automatic renewal contract is very less therefore sometimes it becomes very expensive for the parties to carry forward the obligations of the contract.

Disputes

When a party feels that the obligations of the contract are too heavy for him to carry forward and at the same time finds themselves in a situation where they have to keep the contract running for another term, it leads to disputes among the parties.

Inefficiency

The undue pressures of the inflexible terms of the contract make the parties inefficient and hostile with the working dynamics of the contract.

Against the will

It happened to me quite some time ago when I wanted to cancel my Netflix subscription but forgot about the renewal date and when I used to receive a message on my mobile phone that my account is being debited for another month I used to find myself forced to watch the contents on that platform. I know it happens to most of the people that against their will the contract gets renewed without letting them know and this is one of the major drawbacks of automatic renewal.

In the case of Tupperware India Private Ltd vs Veena Walia on 9 March 2018, DHC, O.M.P 842/2011 the court said that: If needed, reference can be made to the above-mentioned judgment of the Delhi High Court that specifically deals with the automatic renewal clauses in a contract. This judgment also talks about how a contract having an automatic renewal clause can be terminated by a party and what would be the repercussions if the termination notice is sent after the expiry of the ongoing contract term.

Conclusion

I am sure you must be wondering after going through the advantages and disadvantages of the automatic renewal clause that it’s kind of a two-sided sword. On the one hand, it has so many benefits to offer but on the other hand, it takes away the liberty of the parties to engage themselves with some other better opportunities.

In my opinion, it is not a bad clause to have in your contract but at the same time, it should be treated as some boilerplate clause as it can surely dent your future plans. It is advisable to go through each and every clause of a contract and go through it once in a while so that what is meant to be good to you won’t do any harm to you.

References

Students of Lawsikho courses regularly produce writing assignments and work on practical exercises as a part of their coursework and develop themselves in real-life practical skills.

LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:

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Involvement of Public Administration regarding the rights of homeless people

By

Diva Rai

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August 22, 2021

0

202006bhr_global_coronavirus_escr — Image source - https://bit.ly/3ATrZY6

This article is written by Varchaswa Dubey, from JECRC University, Jaipur. This article reflects the exhaustive work concerning public administration regarding the rights of homeless people.

Introduction

The public administration is considered to look after the administration of the country by practising the powers they have incorporated from the position they hold. Public administration withholds an important role in the development of society since its primary duty and responsibility is to ensure the enforcement of laws and policies enacted by the legislature or other competent authority. Apart from that, they also look after the health and safety of the community they are assigned to serve.

One such duty and responsibility of public administration is the development of the homeless people in the society, who not only lack shelter, but also food and clothes, which are considered as the most essential elements of life.

The problem of homelessness is not only a problem that pertains in India but throughout the world, which has led to the violation of every human right possible, primarily those enshrined in the Universal Declaration of Human Rights.

According to a report of the 2011 census, 17,73,040 people are homeless in India, out of which 10,46,871 were males, 7,26,169 females, and 2,70,605 were children, with the highest being in the states of Uttar Pradesh and Maharashtra.

Public administration

Public administration is a field in which leaders serve communities to advance the common good and effect positive change. Public administration professionals are equipped with skills to manage at all levels of government (local, state, and federal) as well as nonprofit organizations. Public administration serves as the basis of any government, intending to implement the policies of the government without which no government can prosper.

Role of public administration

The role of public administration is:

Implementing public policies

The public administration enforces the public policy enacted by the legislature or other policymaking authorities for the betterment of the public at large.

Implementation of laws

Public administration implements the law and order to maintain the decorum of society.

Implementing other policies

Policies other than those concerned with law and order, like economic policies, security policies, regional, state, and national policies, environmental policies, education policies, employment policies, healthcare policies, etc., are implemented by the public administration of a country.

Methods to achieve public administration strategies

Public administration needs to achieve its desired strategies. Certain methods to achieve this strategy are:

Specific method

It refers to the determination and setting of a goal that is to be achieved by the public administration, where the goal is set clearly.

Measurable method

Public administration must take measures to achieve the desired goal. For example, if they need to implement a public policy, they must take measures to prevent the criticism from attacking the mainstream policy.

Attainable method

The aim of public administration shall be ambitious to achieve the desired implementation of policy, on the other hand, the policy should also be attainable and not too difficult to achieve.

Realistic method

The policy which is desired by the public administration must be realistic and not fanciful.

Time-bound

The administration must achieve the desired goal within a specific period, and such goal must be achieved within the decided period to make the policy efficient.

The rights of homeless people

Homelessness is a profound assault on dignity, social inclusion, and the right to life. It is a prima facie violation of the right to housing and violates several other human rights in addition to the right to life, including non-discrimination, health, water and sanitation, security of the person, and freedom from cruel, degrading, and inhuman treatment.

Homeless people are equally entitled to all the fundamental rights which are available to those who reside in a shelter. The constitutional rights of homeless people are:

Article 21: The homeless are entitled to all the rights enshrined in Part III of the Constitution of India. The Karnataka High Court recently considered the failure of the State to provide basic shelter to the urban homeless, which violates the right to life under Article 21 of the constitution of India.
Article 14: It is the right concerned with the equality before the law and that state shall not deny to any person the equal protection of the law, and one such factor is to shelter the homeless.
Article 19: The homeless people are also entitled to the right to reside and settle in any part of the territory of India, however, they lack shelter and cannot reside anywhere,
Article 38: It is concerned with the welfare of the people by state.
Article 39: It is concerned with the duty of the state towards its citizens, however, this and the abovementioned right is present in Part IV of the Constitution, and therefore, non-enforceable in any court of law.

The Indian scenario

The 2011 census report clearly states the high number of homeless people in India. The homeless are victims of negligence by the local, state and central government, with no shelter. They sleep on the footpaths or other similar places under the open sky. In addition, hunger, exposure to cruel weather conditions, unclaimed corpses, no medical assistance, etc, has not only caused derogatory living conditions to the homeless but deaths of thousands every year.

Reasons for homelessness

Numerous factors are associated with the homelessness of the poor like:

Lack of affordable housing

The rates of property and material required to build a house are very expensive and unaffordable for the poor, which has forced them to stay homeless instead of possessing a house.

Unemployment

The most vital factor which is associated with homelessness is the unemployment rate of the country, due to which the homeless people lack the required financial resources.

Physical or mental illness

Physical and mental impairments have led to the homeless people being unemployed and eventually homeless, and the main contributor to this factor is the poor medical aid they lack from the government.

Domestic violence

Domestic violence on women is the most significant factor why most homeless women reside on the streets. The violence they faced from their husband, or other family members has forced them to quit their house.

The role of the Indian judiciary

The Supreme Court of India, in a writ petition, directed the Ministry of Housing and Urban Affairs to constitute a committee to initiate physical verification of the available shelters for urban homeless in each State or Union territory. The committee shall also verify whether the shelters comply with the operational guidelines for the Scheme of Shelters for Urban Homeless under the National Urban Livelihoods Mission (NULM). The committee shall inquire into the reasons for the slow progress in the setting up of shelter homes by the States/UTs. The committee shall further inquire about the non-utilization and/or diversion/misutilization of the funds allocated for the scheme for providing shelters to the urban homeless. The committee shall further issue suitable recommendations to the State Governments to ensure that at least temporary shelters are provided for the homeless in the urban areas to protect them during the winter season.

The Supreme Court of India, in the case of Dr.Ashwani Kumar v. Union Of India And Ors, (2018) held that – “ the right to life includes the right to live with human dignity and all that goes along with it, namely, the bare necessities of life such as adequate nutrition, clothing shelter and facilities for reading, writing and expressing oneself in diverse forms, freely moving about and mixing and commingling with fellow human beings”.

The role of the legislature

The legislature plays the most significant role in the development of the laws since the country is only governed by the laws which are enacted for the welfare of the people. One such proposed enactment is the Homeless Pavement Dwellers (Welfare) Bill, 2011, which defines pavement dwellers as – “the persons living on the pavement of roads or footpaths, under the bridges, flyovers, bus stops, railway stations or yards, in parks or under the open sky in any public place in the metros and urban areas”. The Bill also places a responsibility on the government to formulate a national welfare policy for the poor homeless pavement dwellers for being uniformly implemented across the country by the appropriate governments.

The Homeless Pavement Dwellers (Welfare) Bill, 2014, and the Homeless Pavement Dwellers (Welfare) Bill, 2016 were also introduced in the Parliament. However, none of the proposed bills could be converted into legislation.

Later, the Persons in Destitution (Protection, Care and Rehabilitation) Model Bill, 2016 was drafted by the Ministry of Social Justice and Empowerment, which refers to ‘Persons in Destitution’ as homeless persons, persons in begins, persons with physical and mental disabilities, to those persons who are above 18 years of age and in state of poverty arising from economic or social deprivation and sustained unemployment.

Other housing policies and programs

The National Housing Policy, 1988: The first national housing policy concerning housing was established in the year 1988 to eradicate homelessness and improve their housing conditions, and provide them with basic services and amenities.
The National Housing Policy, 1994: Empowered with the 1991 changes in the country, the 1994 policy aimed at the overall development of rural people and urban poor.
8th Five Year Plan: The plan placed a duty on the government to develop an environment to remove hindrances in the housing activities, increase the supply of housing and basic services, standardize and up-gradation housing, and address the need of the homeless people with the main objective of ‘shelter for all’.
National Housing Policy, 1998: The policy aimed at providing quality and cost-effective housing and shelter options, ensuring that all such houses are easily accessible, and providing basic sanitation and water facilities. The Ministry of Housing and Urban Affairs also gave guidelines in this regard.
The National Slum Development Programme of 1996: Apart from aiming at infrastructure, education, health care, the program also had a component of shelter up-gradation or construction of new houses.
Jawaharlal Nehru National Urban Renewal Mission of 2005: The policy aimed at developing basic services for the poor and housing development program for the development of slums by providing shelters, basic services, and other amenities to provide utilities to the poor.

National Urban Housing and Habitat Policy of 2007

A policy enacted by the Government of India, Ministry of Housing and Urban Poverty Alleviation.

Aim of the policy

Providing housing and basic services for the poor and promoting balanced urban-rural planning by following the regional planning approach,
Accelerating the pace of development of housing and related infrastructure,
Emphasizing improving the affordability of the vulnerable and economically weaker sections of society,
Facilitating accessibility to serviced land and housing with a focus on economically weaker sections and low-income group categories, etc.

The United Nations and homelessness

The United Nations referred to homelessness as a global problem that affects people with diverse economic, social, and cultural backgrounds, in both developed and developing nations in its report – “Affordable housing and social protection systems for all to address homelessness”. The UN considered homelessness is not only a loss of physical housing, but is also a loss of family, community, and a sense of belonging.

Suggestions to prevent homelessness

Making available housing policies to prevent homelessness and support those people who are facing homelessness,
Prevention of forced eviction,
Providing adequate shelter and services to the homeless people,
Promotion of affordable housing.

Conclusion

People who are homeless are victims of numerous attacks and to protect the rights of these individuals, the administration must work effectively and in a time-bound manner, or else society will continue to witness more homeless people around it. The administration is the most ideal authority which can eradicate homelessness because it has the authority and power to enact better policies that will eliminate homelessness only if the administration drafts a policy that is not similar to the older policies since the older policies couldn’t achieve the desired objective.

It is worth underscoring that most of the shelters and other similar places which give place to the homeless people to reside temporarily are either being operated by NGOs or religious bodies and instead of the government which has primary responsibility for the welfare and development of its people. The government has certain policies like providing temporary shelter during winters at very low rates however, there are not many temporary shelters during the rainy and summer season. Therefore, the administration must draft a permanent policy to eradicate the highlighted issue and until such policy achieves its objective, the homeless people must be given shelter at temporary camps or other places.

References

https://sciendo.com/article/10.2478/wrlae-2019-0008

https://www.scconline.com/blog/post/2020/07/01/homelessness-need-of-wakeup-call-for-a-state-in-slumber/

https://www.nhb.org.in/Urban_Housing/HousingPolicy2007.pdf

https://blog.ipleaders.in/prevention-homelessness-problem-treated-legally/

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Introduction

Contempt of Court Act, 1971 and it’s objective

Criminal contempt proceeding against K Sudhakaran : an insight

Shuhaib murder case

Kerala Advocate General sanctioned petition against K. Sudhakaran

Conclusion

References

Introduction

What are consultancy agreements?

Major elements of the consultancy agreement

Whether consultancy agreements are legally binding?

Significance of compensation clause in a consultancy agreement

The procedure of drafting compensation clause

Example:

Compensation and payment

Conclusion

References

Introduction

Laws for setting up a business in India

Definition of confidential objects

Confidential relationship

Why is there a need for confidentiality clause in an agreement?

Confidentiality obligation

Exclusion

Ownerships

Mutual non-disclosure agreement

Purpose of a mutual non-disclosure agreement

Right to privacy

Case laws

Zee Telefilms Ltd. v. Sundial Communications Ltd. (2003)

Anindya Mukherjee v. Clean Coats Pvt. Ltd. (2010)

Daniel Corus BV v. SAIL (2017)

Conclusion

References

Introduction

A classification of CSR clauses as seen in investment treaties

Direct CSR clauses : a method of defining international commitments for investors

Indirect clause : a way of protecting host countries’ power

Inclusion of CSR clause in some investment agreements around the world

The enforcement of investor obligations through counterclaims

Challenges of interpreting and enforcing CSR provisions in investment treaties

Conclusion

References

Introduction

Freedom of speech – a fundamental human right

Controlling freedom of speech through terrorism

The need for discussion

Government’s fear – a source of infringement of a basic human right

The reforms required

Conclusion

References

Introduction

Artificial intelligence in the business sector

Artificial intelligence in contracts

What is a psychological contract?

Impact of AI in the psychological contract

Conclusion

References

Introduction

Laws in India related to stamp duty

Applicability of stamp duty

Types and mode of stamp papers

Stamp duty charges

Categories of instruments for stamp duty

Fixed stamp duty instruments

Instrument with variable stamp duty

Instrument with a market value linked stamp duty

Calculation of stamp duty

Category 1 : fixed stamp duty

Category 2 : variable stamp duty

Category 3 : market linked

Conclusion

References

Introduction

Contracts for athletes

Some of the important clauses which can form part of the entertainment for athletes

Best efforts clause

Morality clause

Bonus incentive clause

Hazardous activities clause