CCBJ: Please tell us about yourself and your professional journey from litigation lawyer to now?
Dr. Shastry: I started my journey as a litigating lawyer around two decades back. I practiced before the Rajasthan High Court between 2002 to 2006 and appeared in numerous matters, such as civil writs, criminal appeals, enforcing and challenging arbitration awards, etc.
During this period, I received a Ph.D. in Trade & Competition Law. The Competition Act of 2002 was a new law and not much had been researched from an Indian perspective on that. My interest in research took me to National Law University, Jodhpur, India’s premier law school, and while I used to meet the vice-chancellor and the dean of that university to discuss the Trade & Competition law, as they were experts in that field. I also received an offer from the university to join it full time as assistant professor and chief warden.
That is how my professional journey shifted from litigation to academics. I completed my Ph.D. and then yearned to work in a regulatory setting, having learned about the role of a competition regulator during my research. This led me to join the Reserve Bank of India (RBI), where I spent 6 years as a central banker.
At RBI I managed legal matters for various departments, including Foreign Exchange and Banking Supervision. During this stint, I would often interact with economists and other financially savvy people. This led to my decision to pursue an MBA so that I too could understand the nuances of finance and strategy.
I then joined IIM, Ahmedabad, India’s premier business school, to earn my MBA. I enrolled in a course called PGPX (1-year full-time) and then was placed into RPG Group.
Post-MBA, my corporate journey started. During the past decade or so I have worked in large Indian conglomerates, including RPG Group, Adani Group, Welspun Group and, at present, PE Platform Cube Highways, India’s largest toll road operating platform.
Currently I am its general counsel, with four department heads reporting to me: Legal; Contract, Claims & Risk Management; Insurance; and Compliance, Ethics & Investigation.
What are your thoughts on the evolving role of general counsel in the corporate sphere in India?
If I recall my journey over the past 2 decades, I will surely say that the roles of in-house and general counsel have changed tremendously. I distinctly remember around a decade ago the role of general counsel being passive, the facilitator of litigation. Now the role has evolved into more of a strategic business partner and the conscience-keeper of Corporate.
Now no major decision in any large conglomerate takes place without involving the GC, and the GC has a final say at times in matters that have regulatory or legal implications. GCs have established themselves as a key pillar of business solutions and, along with the CEOs and CFOs, they play a crucial role in the decision-making of the company.
How would you describe the infrastructure sector in India?
Well, in economics there is a concept known as the multiplier effect. The infrastructure sector in India at present boasts a multiplier effect of 3 to 6, which means every dollar spent on infrastructure in India would boost the country’s economy by 3 to 6 times. That is the importance of this sector.
If we look at the government of India’s initiatives over the past few years, you will see massive spend on infrastructure. The National Infrastructure Pipeline in India is slated to invest a whopping US $1.6 trillion over 5 years (2020-25) to build infrastructure projects and drive economic growth.
That is the massive size of investment contemplated and you can guess the kind of boost it will give to the Indian economy. Furthermore, under the current-year annual Union B of India is budget, a whopping sum of Rs. 10 lakh crores (US $120 billion) have been earmarked to spend on infrastructure.
For these reasons I am bullish about the sector, and the kind of investment the sector is attracting is extremely comforting for players in this space.
Are there potential legal challenges in this sector ahead?
The potential legal challenges in the infrastructure sector lie in how the dispute resolution process is run in the country. India was ranked 163rd out of 191 countries in “enforcement of contracts” as per the Doing Business Report of World Bank published in 2020. Similarly in the World Justice Project Rule of Law Index 2022 (ROLI) India was ranked 77th out of 140 countries. These indicators do not bode well for India as an attractive destination for investment. Therefore, there is lots to be done on the justice delivery front to ensure that the confidence of investors increases. India’s rank should be rightfully in the top 10 in both these indexes.
In addition to poor enforcement of contracts and lackluster performance in the ROLI, policy flip-flops also do not give any confidence. The infrastructure projects are long term, running into many decades, and therefore government policy needs to remain consistent across those many years. It cannot depend on the predilections of the government in power, which creates confusion in the mind of players.
Lastly, issues having to do with land acquisition and delays on part of regulators also cause unnecessary and avoidable delays, threatening the viability of some infrastructure projects.
How are foreign investors currently impacting India’s growth story?
In the financial year 2023, the infrastructure industries in India saw a foreign direct investment equity inflow of approximately US $1.7 billion. The government scheme “National Infrastructure Pipeline,” as I said above, is a welcome step that is attracting private and foreign investments into the infrastructure sector as well.
The biggest advantage of foreign players coming to India to invest does not only mean that there is money flowing but also the expertise of these foreign players comes in handy at times. For example, many Japanese companies are bringing great technologies along with their investment and that, combined with Indian youth and vibrance, is giving a great boost to the infrastructure regime.
Has legal tech been an asset to Indian corporations?
Indeed, it has. I have been a firm advocate that the time has come for the modern legal department to have legal tech and AI in its toolbox. A legal department that does not have legal tech support is not going to keep pace with this ultra-fast world.
I believe that mundane work, such as research, formatting, basic drafting, etc., must be shifted to legal tech software and the time saved must be used for more fruitful purposes. The large corporations I have been part of, whether RPG, Adani or Welspun Group, all have had legal departments that use legal tech.
Though I feel that the introduction of legal tech into the legal departments of Indian corporate is still very minimal, it must go up. The legal tech market in India currently is valued at around US $1.13 billion. As per CIIE. Co, an IIM-Ahmedabad-based incubator, there are around 650 legal startups, the second highest in the world. Thus, this is an emerging market and the entry of younger lawyers who are more tech savvy will give a boost to this industry.
I feel that the legal tech market will quadruple or quintuple in size in another 5 or 6 years. That is the potential that this market has in India.
What effect do you think AI will have on your industry?
AI will be a game changer in the legal industry worldwide. It will not be uncommon that soon you may see AI- powered robo-lawyers working in court rooms even in legal departments of large corporations, where they will perform mundane legal services.
The Indian Supreme Court is already using AI to provide live transcriptions of arguments. These are baby steps, but I believe that soon we will have AI providing decisions in many routine matters.
AI could easily be trained to find out the relevant rules and precedents and to pass judgements easily in matters other than those requiring intricate usage of discretionary powers and intuitiveness.
There is a lot of apprehension among younger lawyers as to whether AI would take over their role, leaving them jobless. I always remind them that horses were the modes of transport for thousands of years. However, in the late 19th/early 20th centuries, the motor car made horses extinct as a mode of transport. That in turn meant the entire saddle and blacksmithing industries, and other ancillary businesses, all went bankrupt. But humans learned the art of driving motor cars and, along with petrol pumps, etc., a new economy developed.
Hence, just as humans evolve with the advent of modern technologies, in an AI world human lawyers will be required to evolve into a higher being, e.g., do more strategic thinking. Mundane legal work will be done by the AI, and the strategic and intuitive part of will be managed by humans with the help of their AI juniors.
What legal department changes would you like to see implemented in large infrastructure companies?
The large infrastructure companies’ legal departments are not using legal tech and AI to its full potential, so the changes I would like to see would be:
- Embracing legal tech and AI.
- Mundane legal work, such as researching, drafting, formatting, etc., not being done by humans.
- Recruitment of more tech-savvy younger lawyers who are ready to embrace the future.
- Having non-legal professionals, such as chartered accountants, forensic experts, etc., in the legal department, allowing the department to take a more holistic approach to its function. (I currently have a few chartered accountants, a civil engineer and a forensic expert reporting to me.)
- The GC suite must have the following departments reporting to it: Legal, Compliance, Contracts, Secretarial and Insurance. This will help the GC suite provide holistic solutions.
- The GC must be part of the board of directors or a regular invitee to board meetings. This will help the GC understand the company’s risk-taking appetite and general approach to its business.
Published February 22, 2024.
