Could you please tell us about your role in Zaiwalla & Co?
I am the Managing Partner of Zaiwalla & Co. LLP. We are an international law firm based in London’s Chancery Lane, specialising in Litigation and Arbitration.
When did you start in the firm, and what was your journey like?
I am originally from Hyderabad and studied law at Delhi University. I came to London 15 years ago and joined the firm, qualifying as an English Solicitor. It has been an exciting journey and I have found that law is a challenging profession in which you need to be able to stay calm and focused under huge pressure. I have worked on some very high profile, landmark cases which has resulted in changes to the law. I view this as a huge achievement in itself.
Which is your largest growing practice sector?
While Zaiwalla & Co. had started with a specialism in litigation, arbitration and international sanctions, the firm has seen an increase in interest from the oil and gas industry. This made us channel a specialist desk to serve the oil and gas industry in litigation and arbitration.
We find this to be a lucrative market, and with our specialist desk, we have had the first mover advantage in the industry.
Given the volatility in the commodities market globally and the new avenues of trade, the sector is promising.
Could you please tell us the energy sector clients you have worked with and if you could please share a brief of each case?
Some of the major energy clients that we have worked with are:
- Indian Oil Corporation – A large arbitration case for IOC against Trafigura – the world’s second-largest oil trader.
- Tamil Nadu Electricity Board – The firm acted for TNEB in a London High Court litigation against Abu Dhabi power company, ST-CMS. This was a high-value dispute involving power purchase agreements and the correct tariff upon which the electricity had to be charged. Mr Arun Jaitley and late Tehmtan Arunjina flew into London to give evidence for this case.
- The firm advice Rosneft Oil & Gas against Russian Sanctions
- Advised the Russian government on overturning the USD 50 billion arbitration award (largest ever arbitral award against Russia) on a claim by the former shareholders of Yukos oil company.
- Acted for Petropars, Iran’s largest Oil & Gas co, in relation to international sanctions.
- The firm’s Senior Partner and founder, Mr Sarosh Zaiwalla, has acted for ONGC.
The Indian Government is trying to establish the country as an arbitration hub. How do you think this will benefit the energy sector?
Indian energy companies, who currently go abroad to have their disputes decided, could save time and costs if India had an international arbitration centre that was held in the same regard as those in Singapore or London.
For this to happen, the Indian legal sector needs to demonstrate international standards of practice for foreign companies to feel comfortable enough to have matters decided in India. The Indian legal sector needs to open its doors to international lawyers to implement positive changes by way of best practice in the Indian legal system.
What are the policies of the government when it comes to foreign oil companies on establishing wholly owned subsidiaries in India?
India is the third largest energy consumer in the world after China and the US, and Oil & Gas accounts for around 35% share in India’s energy consumption. Considering the demand, India has allowed 100% FDI in exploration activities of oil and natural gas fields as well as 49% FDI in petroleum refining.
The government has been actively supporting FDI through a slew of measures including de-regulating diesel, unveiling the new Hydrocarbon and Exploration Licensing Policy(HELP) and setting up the mega Paradip refinery. The government has also announced new policy changes such as single licensing and the new revenue sharing model as opposed to the profit sharing model under the previous policy. There is also a newfound marketing and pricing freedom to sell gas produced from geologically difficult areas with a ceiling price.
All these new policies will stand to attract further interest in the Indian oil & gas sector.
The government has permitted 100 percent FDI in almost all areas of oil and gas sector that includes exploration and production (E&P), oil marketing, refining, and oil product pipelines. How do you see the legal framework in India in attracting FDI in the energy sector?
One of the vital areas with serious scope for improvement is the country’s ageing legal framework. To achieve this, there are two different steps which need to be taken simultaneously in India to create a legal system where disputes are resolved expeditiously:
- The first step is to strengthen the legal systems through Court reforms and thus promote Alternative Dispute Resolution via Arbitration and Mediation.
- The second is to adopt stern measures to prevent misuse of the legal system – e. by discouraging individuals who make frivolous applications.
The energy sector in particular will stand to benefit from these improvements as they are set to provide a legal cushion for international companies to enter a new market such as India. The sector has been relatively unexplored by international companies, and therefore it stands for a surge in interest.
What areas of improvement do you propose for the current legal work to ensure greater synergy between the government and the private sector in the Energy space?
The most necessary area of improvement has to be with the legal framework. India needs to reinforce its legal system to ensure faster dispute resolution mechanisms, which will help instil industry confidence.The second area of improvement will be to reduce the red-tape. Recently India has risen a record 30 places in the Ease of Doing Business 2018 index, having moved from 130 to 100 this year. This is an endorsement to the country’s rapid pro-business approach under the present government. This is a very significant improvement, and could well be one of the biggest steps made by any country.
With an aim of breaking into the top 50 list of the Ease of Doing Business index, the Indian government is currently pushing to make amendments in the country’s legal systems and laws. The draft bills are currently being prepared by the Union Law ministry to amend crucial laws, regulatory and arbitrary structures to make it easier for businesses to operate in India.
Do you feel that the country is ambitious with the Paris climate accord, and do you think it is a viable target considering India’s energy requirements?
The majority of India’s power needs are fulfilled from coal power plants, with just under two-thirds of its total capacity a heavily polluting source of energy. The country has the third highest CO2 emissions in the world just after US and China, although in per-capita terms India stands at 128th globally. India is committed to reaching the target of getting 40% of its energy from renewable sources by 2030.
It is a growing country of 1.2 billion people with huge aspirations, but It still has 300 million people without access to energy.
The recent withdrawal by US President Trump from Paris Climate accord puts pressure on developing nations which depend on investments in renewable energy producers from developed nations.
There is a general awareness of air pollution in the country and the economic benefits of renewable sources of energy (which is available plenty in India) make PM Modi an ardent supporter of the climate accord.
Ms. PAVANI REDDY
Managing Partner, Zaiwalla & Co. LLP
Pavani Reddy is the Managing Partner of Zaiwalla & Co. LLP, headquartered in Chancery Lane, London. She advises International businesses on commercial law and has been involved in the firm’s most high profile disputes in the London High Court, Court of Appeal, the Supreme Court of England and Wales, and the Courts of the European Union.
Pavani has established herself as a key player in the commodities sector as a result of her role advising trading houses, brokers and insurers in respect of the Sale of Goods Act, Sanctions and Compliance issues. She is also active in the more contentious sector of the commodities industry, acting in commercial arbitrations under the rules of LCIA, ICC, DIFC as well as High Court applications which arrived following the arbitral process. Pavani also handles Grain and Feed Trade Association (GAFTA) arbitrations.
With extensive experience in obtaining freezing injunctions as well as defending security for costs orders on behalf of international clients, Pavani handles high value commercial cases in the London High Court, Court of Appeal, the Supreme Court of England and Wales and the Courts of the European Union.
Some of the significant matters Pavani has acted on include:
- Shivnath Rai Harnarain (India) Ltd v Concordia Agritrade Pte Ltd.  EWHC 2959 (Comm)
Where the English Court clarified that under a classic FOB contract, the seller is under no duty to ship until the buyer has given adequate shipping instructions.
- PEC v Asia Golden Rice  EWHC 1583 (Comm)
Acting for PEC (an Indian state-owned company) defending a High Court claim for the sum of USD 7 million arising out of a GAFTA Arbitration with a Thai Rice Exporter.
- Erdenet Mining Corporation Ltd v Government of Mongolia
USD 46 million claim against the Kazakhstan government in the English High Court relating to the sale of Iron Ore.
- Tamil Nadu Electricity Board v St-Cms Electric Company Private Ltd
USD 170 million English High Court claim relating to the purchase of power between the Indian State of Tamil Nadu and an American owned electric company.
- GAFTA arbitration
On the issue of a time bar for shipment of pepper from Singapore to India.
- GAFTA Arbitration Appeal
Acting for the seller of Indian durum wheat, a dispute arose when the Purchaser (based in Singapore) refused to nominate a vessel within the shipment period and to issue a Letter of Credit in favour of the Vendor in relation to the agreed shipment.
Pavani is a dual-qualified lawyer (in England & Wales and India).
About Zaiwalla & Co. LLP:
The firm acts for both domestic and overseas clients including corporations and state entities, as well as individuals. Their practice areas cover both contentious and non-contentious law, including domestic and international litigation, international commercial arbitration, shipping, banking, project finance, energy, company commercial and immigration.
Founded in 1982 by Mr Sarosh Zaiwalla, the first Asian individual to establish a law firm in the City of London, Zaiwalla and Co. Solicitors has been involved in over 1,200 international litigations and arbitrations in the fields of Energy, Maritime and Construction. Previous clients of the firm range from the President of India, the Government of the People’s Republic of China (PRC) and the Iranian Government to the Bachchan and Gandhi families in India.
Zaiwalla & Co. Solicitors benefits from the expertise of a strong international team, including specialists in the laws of Russia & CIS, China, India, Middle East and Iran.