INDIA Law and Practice Contributed by: Anuradha Mukherjee, Omar Ahmad, Vikram Shah and Soumya Dasgupta, Cyril Amarchand Mangaldas
2.6 Contingency Fees Contingency fees are not permitted in India, with such arrangements being specifically prohibited on the part of lawyers under Rule 20 of the Bar Council of India Rules, 1961. 2.7 Time Limit for Obtaining Third-Party Funding There are no applicable statutes/rules regulat- ing third-party funding, so there is no prescribed time limit for obtaining third-party funding. 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct In India, certain proceedings require pre-action conduct, as follows: • the filing of a commercial suit must be pre- ceded by mandatory “pre-institution media- tion” as outlined under Section 12A of the CCA, with the only exception being cases wherein some urgent interim relief is being sought; • in writ proceedings, courts take into consid- eration whether the petitioner has exhausted local remedies such as approaching the state authority concerned with a representation seeking redressal of grievances, if any such process is prescribed under applicable law; • for proper institution of a civil action against a government/state authority/public officer (in relation to his or her official conduct) in India, two months’ notice, in writing, must be served upon such authority/government; • for civil proceedings against a foreign state, the Indian government’s written consent is a pre-condition; and • in arbitration matters, if pre-arbitral steps are prescribed under a contract, courts require such parties to adhere to such requirement.
Contract Act, 1872 (ICA), and the grounds for declaring such agreements as illegal or void would be: • unconscionability; • unfairness; • going against public policy; • being for the purpose of gambling in litigation; or • injuring or oppressing others by abetting and encouraging unrighteous claims. 2.2 Third-Party Funding: Lawsuits Since there is no specific legislation/statute gov- erning third-party funding, there is no exhaus- tive list of lawsuits made available for third-party funding. However, third-party funding in India is widely used for arbitration proceedings as they generally tend to be money-intensive mecha- nisms for dispute and are likely to give investors huge payouts. 2.3 Third-Party Funding for Plaintiff and Defendant There is no law prohibiting third-party funding for either the plaintiff or the defendant. 2.4 Minimum and Maximum Amounts of Third-Party Funding Indian law is silent on the minimum and maxi- mum amounts of third-party funding. 2.5 Types of Costs Considered Under Third-Party Funding There is no specific provision governing costs vis-à-vis third-party funders. However, such funding can cover any lawful structuring and may involve legal counsel’s fees, court/tribunal fees, venue costs and other costs for cases such as class action suits, commercial suits, commer- cial arbitrations, tortious claims, etc.
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