By Lynn Monson
Legal News
Standing in a classroom in Delhi, India, last spring, University of Michigan law professor Vikramaditya Khanna queried not only the 22 students in front of him, but also 18 more back on the U-M campus in Ann Arbor.
A real-time video link allowed Khanna to teach "Law and Economic Development in India" to students on both sides of the planet at the same time. It was 5:30 p.m. at the Jindal Global Law School in Delhi and 8 a.m. on the Law Quad in Ann Arbor.
The use of technology to easily shrink the world was a fitting way to conduct a class focused on the legal intricacies of a rapidly developing economy with a significant high-tech component.
As more and more U.S. companies expand into India, Khanna and the U-M law school are well-positioned to provide legal expertise and education about the distinct cultural, business and legal traditions of the 1.2 billion people who live in India.
The class at Jindal is one of the latest entries in the law school's long emphasis on international law, dating to its founding in 1859. Throughout the school's history, and especially today, the faculty roster is a Who's Who of world-class experts in international law.
Beyond classes focused on the topic, the school has created numerous programs, centers and clinics for what it calls MLaw Global. Khanna's class in India was part of a new initiative -- the Center on Global Corporate and Financial Law and Policy -- that was set up in late 2010 with the law school at O.P. Jindal Global University on the outskirts of Delhi. The agreement calls for faculty and student exchanges, which Khanna kicked off with his visiting professorship over four months early last year.
Khanna had previously taught the "Law and Economic Development in India" class on the U-M campus -- and is again this semester -- but teaching it from India gave students an even stronger tie to the rapidly evolving economic powerhouse. India's government and business sectors are changing so rapidly that there are new developments in the headlines constantly, Khanna said. He pushed students to use the latest news to discuss legal aspects of issues such as infrastructure, property rights, contract enforcement, land acquisition, education policy, intellectual property, mergers, foreign direct investment and development of capital markets.
Because students in India work on their undergraduate and law degrees concurrently, the average age in the Jindal classroom was 19 or 20; the U-M students were closer to 25 or 26.
"The two sets of students, we thought, would bring their own talents and perspectives to it," he said. "The students at Michigan ... would probably have greater familiarity with some of the theoretical underpinnings of economic development and the role of the law in it. And the Indian students would be more familiar with the institutional set-ups in India."
To increase the connections between students in each classroom, Khanna assigned students from each to form teams that worked together virtually. For example, they searched Indian newspapers for reports of economic and legal reforms and how those relate to issues discussed in class.
David C. Johnson, a third-year U-M law student from Three Rivers, Mich., said having classmates in India significantly improved his understanding of the issues in the course. "A Jindal student might say, 'In my village the elders attacked this issue in this novel way...'" Johnson wrote in an e-mail interview. "Or simply listening carefully to an Indian student's question would tell me something about their assumptions regarding the role of a judge, or the relationship between law and society."
Another U-M student, Catherine Longkumer, said the course was "extremely beneficial" despite losing some of the normal "coziness" of a small seminar with all the students and professor in the same room.
Longkumer said two of the most interesting class topics were land ownership laws favoring small landowners and the ways in which an Indian citizen's legal rights vary depending on the religion they marry under.
"Overall it was fascinating to watch how the Indian government interacts with religion while maintaining a secular government," she said. "... The culture and legal system embraces and recognizes religion in ways that would be incomprehensible in the U.S."
Understanding that sort of history and legal culture is crucial for American businesses considering a move into India, Khanna said. The sheer scope of the country provides staggering opportunities. Its 1.2 billion residents represent 17 percent of the world's population and make it the second largest country after China. (The two are expected to trade places on the population list by 2025.)
"Increasingly, even the small- and medium-size (U.S.) companies are thinking, 'If we're trying to sell product, where do we want to sell it?'" Khanna said. "Well, you've got a middle class in India somewhere in the hundreds of millions, probably more so or similar in China. You put those two markets together and that's bigger than the (European Union) and the U.S. put together. And their economies are growing. ... That's why (many companies) are spending a lot of time either in India and China or thinking about how to get into India and China."
All of that makes the practice of global law an important and growing field, Khanna said.
"The government of India has said they think they will spend in the range of one trillion U.S. dollars on infrastructure in the next five years, by which they mean roads, airports and seaports, and power," Khanna said. "That doesn't count what they plan to spend on health and on education."
Extensive expansion will require extensive legal work. The U-M and Jindal collaboration was asked to assist India's Infrastructure Development Finance Corporation, which funds projects and helps arrange financing. Khanna developed a course and program on legal issues related to infrastructure. The sometimes elaborate and confusing ways to acquire land in India are among the reasons that development will require what Khanna calls "very high-end legal work and complicated contract negotiations." Students at Jindal will take the course first this year, then U-M students will join the effort later, probably doing clinical work in India.
Khanna also leads another new international initiative by the U-M law school -- the Director's College for Global Business and Law. Designed for top leaders of major U.S. firms, the "college" holds an annual symposium that brings together a speaker roster filled with international legal stars, many of them U-M law faculty. Its first-ever program, set for April 18-20 in Washington, D.C., focuses on corporate governance and liability when doing business in India and China.
"The liability risks that directors face when they go overseas is a huge issue," Khanna said. "Not a lot of directors, for example, might know that when (your company has) an Indian subsidiary, (and) if it fails to pay bills in India or it bounces checks, you could actually be arrested. And the reason is because bouncing a check in India is a crime, and in India directors in theory can be held liable for the crimes of their company, at least some of them."
Other unique aspects of working in India include:
* India is an incredibly heterogenous place. Though English is a common language there, there are more than 25 official languages, many religions and a population density that can overwhelm newcomers.
* Although a secular state like the U.S., India has a different interpretation of how state and religion interact. Instead of supporting no religion, the government supports every religion by, for example, providing money for pilgrimages or supporting religious affirmative action quotas that vary state by state. The society is complicated by the fact that personal laws -- for marriage, divorce, inheritance and child custody -- are enforced differently based on the teachings of each religion. Thus, courts must enforce many entirely different sets of rules for the same legal area.
* The courts in India are -- to put it politely -- extremely slow. Enforcement of a civil contract could take 10-12 years, before appeal, Khanna said. For property rights cases, it might take 20 years.
* Among the many differences in the legal system is even how attorneys interact with clients. Whereas in the United States, the major client of a law firm would expect to deal directly with the top partner, in India companies are likely dealing with a briefing attorney who conveys the client's requests to the senior attorney who will handle the case.
* Negotiations and transactions are a more nebulous concept in India than in this country. An "agreement" here may not be an agreement there.
"Knowing when things have reached a stage where you can now rely upon what the other person is doing, requires some judgment and experience," Khanna said. "Thinking that you've signed a contract and that that will be somehow enforced by the law, (or) thinking that you've bought property and that it is somehow valid, is an oversimplification of how the transactions actually happen, both in terms of negotiation but also how the law will look at it." That is, if you think you have an agreement and can quickly get a court to agree with you to speed the completion, see previous entry about slow courts.
Over the last decade, the business press and other media around the world have provided expansive coverage of India's economic evolution. Khanna notes that much of the coverage has been along the lines of one paper's description of the country as "Creaking and Groaning into the 21st Century." There's some truth in the implied slowness of the transition, but there also are examples of rapid change, such as technology improvements and multi-sourcing of legal services.
Navigating the many social, legal and institutional customs is where the law school's education efforts come together for both law students and corporate directors participating in the Director's College symposium in Washington in April.
"Over time, with good advice and the kind of practical guidance we hope to give them from the Director's College, when they walk into that environment, they'll have a better sense of what they are actually stepping into," Khanna said. "What are the risks they're facing, what are the rewards they're facing."
Teaching a U-M law class from Delhi was another way for Khanna to immerse himself in the change and help prepare a new generation of law students and business leaders interested in India.
"It was great to see all the energy on both sides of the globe and discuss issues of such fundamental importance to law and economic development," he said.
Published: Fri, Feb 10, 2012
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