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A Quick Look at the Red Flags General Counsel Need to Watch Out For

Here are a couple of Red Flags to watch out for while making your continuity plan in the current business environment.

When chips are down, crystal-gazing into business trends can be useful. In the wake of the second wave of pandemic, projects are likely to get delayed, disputes may rise and only when company law departments are prepared to deal with these curveballs, will the businesses continue to function smoothly. It is important to map out the companies’ vulnerabilities to ensure one is not caught by surprise. Only the most adaptive organizations have the best chance of surviving.

Here are a couple of Red Flags to watch out for while making your continuity plan in the current business environment:


Project Derailments: 

Projects while not all about the Contracts that govern them, do revolve around the lifecycle of contracts, including commercials, variation claims, time extensions, other obligations, and big or small disputes.

For in-house counsel it is, therefore, important to foresee the elements that can throw a spanner in the works and conduct a situational-analysis. Badrinath Durvasula, Managing Director Legal, Essar Group of Companies says, it is important to assess “the best alternatives that could come out of [a] situation. It's called a situational-analysis.” To prepare the management to take the right call the stakeholders must know “whether to go with the dispute or whether to go with a settlement or whether to go with any other alternative as such,” he adds while emphasizing that understanding the commercial angle is essential for an astute legal counsel.


Land Scarcity:

Availability of land is soon going to become a big concern in years to come. The Green Tribunals are going to play a dominant role on aspects of setting up of an industry, land encroachments along with the rights of people attached to it. 

Environmental approvals for greenfield and brownfield projects are going to be a concern. Explaining this in detail Durvasula says, “I may put anything for the plan, I might mobilize the capital, but what I see as the biggest red flag for me, is environmental approval. I constantly rate them as a 50% of my risk element.”  In a dynamic legal and regulatory environment, change in permissible and prohibited activities can result in quick turns for projects. Speaking about risks in sudden stoppages while setting up plants, Durvalusla says, forecasting a two-year roadmap for manufacturing or from the perspective of setting up a plant is often not without challenges and requires serious planning.

For more insights from Top General Counsel of India, tune into our BW Legal World GC World Conference 2021 on YouTube. Click here to view the video.

Time Stamp: 04:08:30 | Badrinath Durvasula, Managing Director Legal, Essar Group of Companies


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