I n t e r n a t i o n a l J o i n t V e n t u r e s , Me r g e r s & A c q u i s i t i o n s

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JOINT VENTURES IN INDIA

Introduction

Foreign investment for development has become a matter of necessity for most growing
economies in the world. India is no different. An emerging market implies a market which is
deregulated and has conditions favorable to foreign investment. Although India falls within
this category, the term, emerging market has not been legally defined. In several industrial
sectors, the Government of India has felt that the best way forward is to permit foreign
investment. In 1991, the Indian Government amended the New Industrial Policy, whereby
many industrial sectors, hitherto fore closed, were opened up for investment. Since then, the
Government has not looked back, and presently in many areas foreign
corporations are allowed to incorporate wholly (100%) owned subsidiaries (WOS) in India.
Furthermore, the Indian capital markets have also been liberalized. Today, foreign
institutional investors (FIIs) operate in the Indian stock markets, providing a variety of
services.

A joint venture is generally understood as technical and financial collaboration either in the
form of Greenfield projects, take-over or alliances with existing companies. In India, no
legal definition as such has been given to joint ventures. However, the Government of India
and its agencies prescribe certain guidelines, which distinguish joint ventures from other
entities. Indian joint ventures usually comprise two or more individuals/companies, one of
whom may be non-resident, who come together to form an Indian private/public limited
company, holding agreed portions of its share capital. A joint venture agreement primarily
provides for the manner in which the shareholders of the joint venture company may transfer
or dispose of their shares. It is also commonly referred to as a shareholders agreement.

Definition of 'Joint Venture - JV'

A business arrangement in which two or more parties agree to pool their resources for the
purpose of accomplishing a specific task. This task can be a new project or any other business
activity. In a joint venture (JV), each of the participants is responsible for profits, losses and
costs associated with it. However, the venture is its own entity, separate and apart from the
participants' other business interests.

A contractual agreement joining together two or more parties for the purpose of executing a
particular business undertaking. All parties agree to share in the profits and losses of the
enterprise.

Although JVs represent a great way to pool capital and expertise and reduce the exposure of
risk to all involved, they do present some unique challenges as well. For instance, if party A
comes up with an idea that allows the JV to flourish, what cut of the profits does party A get?
Does the party simply receive a cut based on the original investment pool or is there


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recognition of the party's contribution above and beyond the initial stake? For this and other
reasons, it is estimated that nearly half of all JVs last less than four years and end in
animosity.


Motives of Joint ventures can be classified in three parts i.e.

1. Internal Motives of JV
1. Spreading Prices: You and a JV companion can share prices associated with advertising,
product or service improvement, and other expenditures, reducing your monetary burden.

2. Opening Accessibility to Fiscal Assets: With each other you plus a JV accomplice may
have greater credit or far more assets to obtain bigger resources for loans and grants than you
could obtain on your own.
3. Connection to Technological Assets: You could possibly want entry to technological
assets you couldn' t afford on your personal, or vice versa. Sharing progressive and
proprietary engineering can increase items, as well as your individual understanding of
technological processes.

4. Improving Obtain to New Markets: You and also a JV companion can combine client
contacts and with each other even type a joint product or service that accesses new markets.

5. Aid Economies of Scale: Collectively you as well as a JV companion can develop goods
or services that reduce total overall production expenditures. Bring your product or service to
industry cheaper where the client can take pleasure in the price savings.



Motives of
JVs
Internal
Motives
External
Motives
Strategic
Motives


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2. External Motives of JV
1. Develop Stronger Innovative Solution: With each other you and also a JV companion
may be able to share suggestions to produce a product that's a lot more competitive within
your industry.
2. Increase Speed to Market place: With shared entry to economic, technological, and
distribution means, you along with a JV accomplice can get your joint item to industry
quicker and a lot more efficiently.
3. Strategic Move Against Competition: A JV may perhaps be able to better compete
against another business leader by means of the combination of markets, technologies, and
innovation.

3. Strategic Motives
1. Synergistic Causes: You may possibly come across a JV partner with whom you are able
to create synergy, which produces a greater result collectively than doing it on your personal.

2. Share and Strengthen Technology and Skills: Two progressive organizations can share
technologies to boost upon each other's tips and expertise.
3. Diversification - There might be several diversification causes: accessibility to diverse
markets, improvement of diverse items, diversifies the modern working force, etc.

Don't let a JV opportunity pass you by simply because you do not think it will fit in with your
personal tiny enterprise. Little and massive companies alike can advantage from the motives
listed above. Analyze how your business can benefit internally, externally, and strategically,
and then come across a joint venture companion that will match together with your wants.
TYPES OF JOINT VENTURES:
Joint Venture agreements generally take one of following forms:
Contractual Joint Venture
Corporate Joint Venture
Partnership Joint Venture
Unincorporated Joint Venture
Incorporated Joint Venture
In a 'Contractual' joint venture, the terms, obligations, and liabilities of the parties are set
forth in a written instrument signed by both parties.
In a 'Corporate' joint venture, the obligations, terms and liabilities are also set forth in a
written agreement, however, this agreement is a much more extensive document in that it
contemplates that the JV will be incorporated and become a separate legal entity. In the


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'Partnership' joint venture, the partners either form a general or limited partnership and the
rights and obligations of the venturers are set forth in a partnership agreement. The
Partnership form of JV is primarily used for real estate type ventures, and generally not used
for a business activity contemplating either research or product development. In a non-
contractual joint venture, there is no written agreement, but the JV does business under a
selected name and the conduct of the parties and the law establishes the liability and
obligations of the venturers to third parties doing business with the JV.
Unincorporated Joint Venture
An unincorporated joint venture is a contractual joint venture that is affected by a legally
binding agreement, and does not involve the incorporation process. It does not create a
separate corporate entity or create equity capital. Thus, it is very like a partnership. This kind
of joint venture is generally entered into for a limited period or for a particular purpose, and
does not join the parties for perpetuity. An unincorporated joint venture may be either by way
of contract or partnership.
In a joint venture by way of contract, the contract is entered into between the parties and sets
forth their relationship, and their respective rights and liabilities..
A joint venture formed by way of partnership is governed by the Indian Partnership Act,
1932. A partnership does not enjoy an independent existence from its members and may be
either in the form of an expressed or implied agreement. It is not mandatory that it be
registered, however registration helps in providing certain benefits and exemptions under
various statutes and enactments, and makes the partners eligible for instituting legal
proceedings to enforce their rights, as arising from the partnership agreement. Registration
also gives them the right to sue any third party, to enforce the contractual rights of the
partnership.
Incorporated Joint Venture
An incorporated joint venture is one that uses a company established for the purpose of the
joint venture, with the venturers acquiring shares in the company. It is either a public or a
private company with limited liability in which the shareholders are the joint venture
participants. Here, the shareholders have no rights in relation to the companys assets. They
can participate in the profits (which are distributed as dividends), but not in the losses.
Basically, in this kind of joint venture, the equity of the project is divided into shareholdings.
All incorporated joint ventures in India are domestic companies, and are governed by the
provisions of the Companies Act, 1956. Such joint ventures have a separate legal entity under
law, and enjoy an independent existence from the parties constituting it




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Another classification
Joint ventures can take on many different looks, which can make it confusing to navigate the
JV world today. However, the diversity in joint ventures can also be an opportunity, allowing
both companies to design a partnership that works for their specific needs. Peruse these 10
ideas for joint ventures and make your partnerships reap the rewards for which you hope.
1. Brochure Exchange A joint venture may be as simple as agreeing to display one
anothers brochures in the others business. Offer them to customers you think might be
interested in your partners goods or services.
2. Link Exchange - This is a particularly effective method of online advertising. Instead of
offering a brochure for your partner, you provide a link to his website on your own to drive
more traffic to his website as well, and vice-versa.
3. Cross-Endorsement Word of mouth is one of the most effective methods of advertising,
particularly when it comes from a business customers already know and respect. Endorse
your JV partner through joint mailings, product reviews on your website or simple, direct
referrals.
4. Sharing Advertising Even online advertising can add up quickly in costs, but if you split
the cost of your virtual ads with your JV partner, you get that much more bang for your
advertising buck. This can also be effective with print advertising or even a booth rental at a
trade show.
5. Sharing Customer Lists Any business owner knows the challenge of forming a really
good customer list, but when you pool your resources; you get exponentially more customers
with little additional effort.
6. Co-Writing Articles - Articles effectively establish the writer as an expert in his field,
while directing customers to his product website. When you work together toward this end,
you leverage your resources for even greater results.
7. Co-Hosting Marketing Events When you share the cost of renting a space and advertising
an event, you get a lot more value from your marketing efforts. You are also pooling talent
and expertise to present potential customers with enticing information.
8. Bundling Products - When you and your JV partner offer related products, you can create
bundles of items that can sell for a reduced price. This can be an effective way of attracting
new customers who enjoy the value of the package deal.
9. Offering Product Reviews You are already considered an expert in your field, as is your
JV partner. When you objectively review one anothers products or services, you add
legitimacy to the process. Provide reviews on your own websites, with links to your partners
website included.

10. Exchanging Marketing for Profits - If you dont have the customer base or the reputation
to offer a potential JV partner, offer a percentage of your profits for every sale you get from
your partners efforts.


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Requirement for joint project negotiation & its organization
1. To take only those responsibilities which can be discharged whether at project or
object level
2. To sure about contribution, role and involvement
3. To avail as much as benefits are possible
4. To decided the favorable term or duration
5. To make the joint venture successful
6. To avoid the future disputes
7. To achieve the objectives of the JV
8. To build & maintain healthy relations with JV partner

Whatever is negotiated is organized and called agreement between joint venture
partners
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT is made at ________, India on _______________ day of
___________ 20___ between _____________________, a company registered in India, under the
Companies Act, 1956 and having its registered office at ___________________________________ ,
INDIA, hereinafter referred to as the "Party of the First Part" (which expression shall unless repugnant
to the context include the Party of the First Part's permitted successors and assigns) AND
_____________________________,a incorporated under the companies act, _______, and having its
Registered Office at ___________________________, (country) hereinafter referred to as "Party of
the Second Part" (which expression shall, unless repugnant to the context include the Party of the
Second Part's permitted successors and assigns).
WHEREAS the Party of the First Part is engaged in manufacture, sale and distribution of
_______________ in India
WHEREAS the Party of the Second Part by itself and its subsidiary companies is engaged in
manufacturing, sale and distribution of ______________________ in many other countries.
AND WHEREAS the Party of the First Part and the Party of the Second Part have entered into an
Agreement for the purposes of expanding their business by setting up of a Joint Venture Company
(hereinafter called the "JVC") to be set up in India for the purposes of manufacturing, exporting and
distributing ______________________.
IN CONSIDERATION of mutual agreements and undertaking hereunder set out the parties to this
agreement have granted the rights and accepted the obligations as follows:
The Party of the Second Part and the Party of the First Part shall undertake to incorporate and form a
company (hereinafter called the Joint Venture Company ("JVC") to be registered in India under the
Companies Act, 1956 by the name of _____________.


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The JVC will be registered in the State of ___________ in India and will have its Registered Office
_________________________________________________ or such other place/s as the parties may
agree upon. The headquarters of the JVC shall be at _________, India.
The main objects of the JVC will be as set forth in its Memorandum of Association attached hereto.
The main objects shall include establishment of manufacturing facilities and distribution,
organization, relating to _______________________.
The JVC shall be entitled to operate sell and distribute goods manufactured by it in India or any other
place outside India as mutually agreed between the parties.
The initial authorized capital of the JVC will be Rs. 1,00,00,000/- divided into 10,00,000 equity
shares of Rs. 10 each. The Party of the First Part and the Party of the Second Part have agreed to
subscribe the share capital of the proposed JVC in the proportion of 3: 2, i.e., the Party of the First
Part to take 30,000 equity shares of the aggregate value of Rs.3 00,000 and the Party of the Second
Part 20,000 equity shares of Rs.10/- each of the aggregate value of Rs.2,00,000/-.
In addition to the initial subscription mentioned hereinabove, the parties agree to subscribe to the
further issue of share capital of the JVC as may be required in the proportion of 3: 2, i.e. , the Party of
the First Part 60% and the Party of the Second Part 40%
The Memorandum and Articles of Association of the JVC will be as set forth in the draft attached as
Annexure - I. These documents may be amended from time to time by written agreement between the
parties, subject to the provisions of the Companies Act, 1956.
On signing this Agreement, the parties agree to take necessary action for the registration of the Joint
Venture Company within 30 (thirty) days hereafter.
The parties hereto agree to jointly own, operate and manage the JVC.
The JVC shall be owned, operated and managed by the parties jointly in accordance with this
agreement and the Memorandum and Articles of Association.
The proposed Memorandum and Articles of Association of the Joint Venture Company shall include
the following provisions:
The JVC shall have a Board of Directors composed initially of 5 directors, three of which shall be of
the choice of the Party of the First Part and two of whom shall be of the choice of the Party of the
Second Part.
The Chairman of the Board of Directors shall, for the first accounting period of the JVC, be one of the
members of the Board of Directors appointed by the Party of the First Part and for the duration of the
2nd accounting period be one of the members appointed by the Party of the Second Part, where after
the parties shall alternatively have the right to appoint the chairman during the subsequent accounting
periods of the company.
The Board of Directors shall meet regularly at least four times a year, i.e., once in each quarter.


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At least 21 days prior notice shall be given to all directors of the Board whether residing in India or
otherwise. In case of directors residing outside India, notice shall be sent by telex/fax/cable. Each
notice shall set out in sufficient detail, the Agenda of items to be transacted at each meeting. A
meeting may be held at short notice if it is agreed by all the directors in writing.
The quorum necessary for transacting any business of or taking any decision of the Board of Directors
shall consist of at least 4 members, of whom at least 2 shall have been those appointed by the Party of
the First Part and 2 by the Party of the Second Part.
If the minimum number of directors of each of the parties is not present at the Board Meeting, the
meeting shall be adjourned for a day, which shall not be less than 10 days from the original meeting
and if at such adjourned meeting the quorum as required is not present, then the adjourned meeting
may proceed, provided that the Board shall not take any action concerning matters specified in
Annexure 1 hereto and any attempted action by the Board shall be null and void.
The parties have agreed that they will obtain an undertaking from each person nominated by them to
be a director of the Joint Venture Company with an undertaking that each of them will implement
each and every provision of this agreement.
Parties shall exercise their powers to ensure that the appointment of directors nominated by each other
is not terminated except as may be mutually agreed. In case any director vacates his office due to any
reason, including operation of law, the party which had appointed such director shall have the right to
fill in such vacancy by appointment of another director to fill such vacancy and parties shall ensure
that the Board fills such vacancies as provided above.
The day to day implementation of the projects and operation of the JVC shall be controlled by the
Managing Director of the company to be appointed by the Party of the Second Part, who shall be in
charge of the technical and administrative operations of the Company within the policy guidance set
by the Board.
Important Decisions
All major policy matters of the JVC shall be decided by the Board of Directors of the JVC. The day to
day implementation of the projects and operations shall be controlled by the Managing Director of the
Company. In the meeting of Board of Directors, normally all matters should be decided unanimously.
However, in case of difference of opinion, matters shall be decided by a majority of directors present
at the meeting. However, following matters shall be decided only by the affirmative vote of the
holders of at least 3/4ths of the equity shares of the company or of, at least one vote in favor from the
group of directors appointed by the Party of the First Part and one vote in favor of the directors
appointed by the Party of the Second Part, it being the intent of the parties that the following matters
will not be decided by the Board of Directors without the consent of at least one director appointed by
the Party of the First Part and one director appointed by the Party of the Second Part:
Amendment of Articles of Association of the Company
Increase of share capital of the Company
Terms relating to engagement of Managing Director of the Company
Declaration of dividends
Merger of the Company


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Dissolution or winding up of the Company or disposition by the Company substantially all of
its assets
Secrecy and Non-competition
It is agreed by the parties that during the term of this agreement they shall hold in confidence and
shall not disclose to any third party without mutual agreement, any technical know how, advice,
statistical or other data or information that the parties or the Company may receive from each other or
their employees except as is necessary in the ordinary course of business for implementing this
agreement.
Parties hereto agree and undertake during the term of this agreement not to compete with each other in
India directly or indirectly of the business of the JVC.
Specific Obligations
On incorporation of the JVC, the Party of the Second Part agrees to enter into (a) License Agreement
and (b) a Trademarks and Logo agreement concerning the licensing of certain technology, trade marks
and logos and other service by the JVC which agreements in all material respects shall be as set forth
in Annexure - II and Annexure - III hereto.
On incorporation of the JVC, the Party of the Second Part agrees to enter into a main Licensing
Agreement which agreement in all material respects is as set forth in Annexure - IV hereto. The Name
Licensing Agreement shall be valid and binding so long as the Joint Venture agreement remains in
force and effect.
On incorporation of the JVC, the Party of the Second Part agrees to enter into a Technology Transfer
Agreement with the JVC for transfer and sale of technology and a production line of
_______________ as well as technical assistance to the company which Technology Transfer
Agreement in all material respects shall be as set forth in Annexure - V hereto.
AUDITORS
The Auditors of the JVC shall be Messrs. ___________________ of __________ or such firm of
Chartered Accountants as may be agreed by the parties hereto.
The business policy of the JVC shall be as set out in Annexure - VI hereto.
The bankers of the JVC shall be _______________ , having its office at ___________________ or
such other bank or banks as may be agreed to by the parties hereto.
The JVC may offer further shares in the share capital of the Company to the public only by written
agreement of each of the parties hereto.
Parties shall not pledge, hypothecate or encumber their shares in the JVC except with the prior
consent in writing of the other party.



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TERMS OF AGREEMENT
The terms of this Agreement shall remain in force until ______________ or so long as the parties
hold the shares in the JVC. In case any party hereto transfers all or any shares to any other party, then
this Agreement shall be deemed to have been terminated.
ARBITRATION
In the event of any dispute arising between the parties in respect of their duties, rights and obligations
under or arising out of this Agreement, such disputes shall be resolved by arbitration to be held in
accordance with the Indian Arbitration Act.
GOVERNING LAWS
This Agreement will be governed by and construed in accordance with Indian law.
IN WITNESS WHEREOF THE PARTIES hereto has put their respective hands and seal the day and
the year first hereinabove written.
SIGNED, SEALED AND DELIVERED }
by the within named }
"Party of the First Part" }
____________________________ }
________________ through the }
hands of ___________________ }
in the presence of............. }
SIGNED, SEALED AND DELIVERED by }
the within named }
"Party of the First Second" }
__________________________ }
___________, through the }
hands of ___________________ }
in the presence of............ }



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The Joint Agreement Checklist:
1. The date on which the agreement is established and executed.
2. The names, addresses and identification of the parties, including the type of business
of each member of the joint venture.
3. The name under which the joint venture will do business.
4. The principal place of business of the joint venture.
5. The purpose of the joint venture. If the purpose is to access a specific project, a full
6. description of that project is required. The terms of the joint venture: when and how
the joint venture is terminated; and, how such items as guarantees, defects, and
insurance will be handled after termination.
7. A statement that the parties are actually co-ventures for the project whether or not the
contract is in the name of all members.
8. A declaration that the organization is a joint venture, not a partnership.
9. The establishment of a fund by the parties to finance the work, together with the
amounts to be contributed by each party, with the fund being deposited in a special
bank account under dual control and all progress payments and other revenues being
deposited in such account.
10. A clause providing that, if additional working capital is required, the parties will
proportionally contribute additional funds, as needed and naming the penalty for
failure to contribute.
11. A declaration of the participation of the parties and percentage in which profits and
losses are shared. Usually these percentages are proportional to the contributions to
the working fund, but the amount of contribution of funds by parties can be increased
or decreased depending on the contributions of equipment or expertise which also
must be considered.
12. Payment of any fee to the controlling co-venturer or sponsor should be specified;
whether a share of the profits in excess of that contemplated is given to the controlling
manager or a flat dollar sum is paid.
13. If equipment is involved, a specific clause should be inserted especially where the
parties contribute varying amounts of equipment.
14. The parties to the joint venture should agree to sign all necessary documents relating
to the contract, bank loans, bonds, indemnity agreements and the like.
15. Control management committee may be determined. A management committee may
be established with provision for remuneration. Alternatively one of the co- venturers
should be designated as general manger of the project, with authority to bind the joint
venture. A provision to clearly define not only the management duties, but all other
duties of the co-venturers and procedures to be followed in dealing with unusual
situations or problems that may develop.
16. A regular meeting schedule should be considered.
17. A financial and periodic joint venture and progress reporting procedure should be
implemented.
18. Establishment of a joint venture bank account, and the appointment of a chartered
accountant and lawyer.
19. The possibility of the death, bankruptcy or insolvency of a member must be handled.
20. The acquisition of equipment and materials by the joint venture and the disposal of
such equipment and material either by sale with the proceeds treated as ordinary
revenues, or by distributing the funds to the co- venturers on a pro-rata basis.
21. Provide for the acquisition of licenses in the name of the joint venture or each co-
venturer as required.


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22. Specify the type of insurance carried by the joint venture and clearly define the
liabilities that are to be insured against by each participant.
23. Define items which are to be considered as costs to the joint venture for the purpose
of determining profit or loss and describe those items which are not reimbursable to
members of the joint venture.
24. A clause should be included respecting the confidentiality of trade information passed
between the co-venturers.
25. Ownership or retention of patents, technology, and consultant reports should be
addressed.
26. Establish the performance security requirements of the project and the bonding
obligations of the co-ventures.
27. State that undivided pro-rata interests are held by the co-venturers on all assets of the
joint venture.
28. Restriction should be considered regarding assignment of co-venturers undivided pro-
rata interests in assets of the joint venture.
29. Indemnification.
30. Substitution or addition of co-venturers.
31. Payout of funds.
32. Disputes arbitration clause.
33. Winding up, final performance and financial statements for the joint venture.
34. Notice Clause
35. The applicable jurisdiction of the Agreement should be stated.
The nature, sized and complexity of the project together with the sophistication of the parties
will determine the detail in which the Joint Venture Agreement is prepared and
aforementioned topics dealt with. This checklist is meant only as a guide to putting a Joint
venture Agreement together. The appropriate professional services, such as legal counsel
should be sought out and utilized.
Turn-Key Project Agreement
A turnkey contract is a business arrangement in which a project is delivered in a completed
state. Rather than contracting with an owner to develop a project in stages, the developer is
hired to finish the entire project without owner input. The builder or developer is separate
from the final owner or operator, and the project is turned over only once it is fully
operational. In effect, the developer is finishing the project and turning the key over to the
new owner.
This type of arrangement is commonly used for construction projects ranging from single
buildings to large-scale developments. Under a traditional lump-sum contract, the owner
agrees to pay the developer to complete a project that is built to the owner' s specifications.
The owner is given many opportunities to make decisions throughout the project, and to
make changes as needed. In a turnkey contract, the owner is generally left out of the building
process entirely as the developer handles all decisions and problems related to construction.
A contract of this kind may also be used in the residential home building industry. With a
turnkey agreement, a builder or developer completes both the construction and the finishes in
the home before turning it over to the homeowner. The homeowner is often offered a chance
to select finishes, including curtains, paint colors and carpeting. Turnkey contracts offer
many advantages over traditional building contracts. Because the developer still owns the


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building until the project is complete, he has financial motivat ion to complete the job as
quickly and efficiently as possible. A turnkey contract also provides more time for an owner
to seek financing and investors before he is required to pay for a completed project. These
agreements also save inexperienced owners from making difficult construction decisions,
leaving these decisions in the hands of the developer or builder. Before choosing a turnkey
contract for your project, it's important to understand the potential drawbacks of this type of
agreement. The primary drawback is the lack of control the owner maintains over design and
construction decisions. For some owners, this may mean the project is not perfectly suited to
their needs once it is complete. For others, this drawback may be canceled out by the
potential for cost savings and shorter construction schedules.
Some owners may choose a turnkey-plus contract, which leaves the developer with some
financial long-term interest in the project. For example, a builder will construct a retail
establishment for an owner, and the builder will receive a percentage of the gross receipts for
a specific period of time. This may encourage the builder or developer to make construction
decisions based on the long-term needs of the project, rather than just the short-term
decisions needed to get the job done.

Technical Assistance

There is no legal definition of technical assistance within any of the treaty dealing directly or
indirectly with intellectual property rights. From a general stand point, one can define
technical assistance as support provided by a provider institution to build or enhance the
capacity, whether human, infrastructural or financial, of the recipient to deal with a
particular issue. Within the embrace of TRIPS and intellectual property paradigm;

The provision of technical assistance presumes that the providers of technical assistance are
developed countries.
There has to be a request by recipient country (usually a developing or an underdeveloped
country) for technical assistance and an agreement must be entered with the provider nation
on mutually agreed basis.
The section provides for an inclusive definition of technical assistance shall include in the
preparation of laws and regulations on the protection and enforcement of intellectual
property rights as well as on the prevention of their abuse, and shall include support
regarding the establishment or reinforcement of domestic offices and agencies relevant to
these matters, including the training of personnel.

Therefore, the type of technical assistance is not exhaustive and can encompass activities or
fields where a need is felt by the recipients and providers. However it has been pointed out
that the above article encourages a dependency culture amongst the recipient nation and is
also responsible for the skewed technical assistance that focuses highly on enforcement and
increasing the level of protection



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Technical assistance is non-financial assistance provided by specialists. It can take the form
of sharing information and expertise, instruction, skills training, transmission of working
knowledge, and consulting services and may also involve the transfer of technical data.
The aim of technical assistance is to maximize the quality of project implementation and
impact by supporting administration, management, policy development, capacity building,
etc.
The technical assistance focuses on particular needs and priorities identified by the
beneficiary country and takes the form of missions carried out by recognized experts.

License or License Contract
It is, the permission by the owner of a patented invention to another person or legal entity to
perform, in the country and for the duration of the patent rights, one or more of the acts
which are covered by the exclusive rights to the patented invention in that country. When
that permission is given, a license has been granted. It may be recalled that those acts are
the making or using of a product that includes the invention, the making of products by a
process that includes the invention or the use of the process that includes the invention. The
license is usually granted subject to certain conditions, which will be set out in the written
document by which the license is granted to the licensee. The licensee of will obviously
relate one of the conditions to the payment money or some other consideration in return for
the license that is granted. Another condition might be that the invention will be used by the
licensee only for the manufacture of products destined for a specific use, as, for example, the
manufacture of a pharmaceutical product for use by humans but not for use on animals. Yet
another condition might be that the licensee is allowed to use the invention only in specified
factories or sell the product embodying the invention only in specified geographical areas. In
a number of countries, the patent law may require that an instrument of assignment of patent
rights or a license contract be presented to the patent office for registration. By the act of
registration, the Government recognizes the assignee or the licensee as the transferee or
holder of the rights transferred by the assignment or of the rights conferred by the license.

There are also many types of licenses that are not franchises. For example, when you buy a
copy of Microsoft Office you are not actually purchasing Office--you are entering into a
license agreement that allows you to use the product under the specified terms and conditions
they have outlined in the license agreement (all that fine print that no one reads).

Consultancy Arrangements
The help of an individual consultant or a firm of consultants that will give advice and render
other services concerning the planning for, and the actual acquisition of, a given technology
can be useful, if not indispensable, for such enterprises, entities and governments that wish to
acquire technology from enterprises in other countries. In such a business arrangement not
only is help received in acquiring the technology but the experience gained and the lessons
learned in engaging and working with the individual consultant or firm of consultants will be
valuable knowledge that can serve to better carry out future projects.



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Franchise
Commercial transfer of technology may also take place in connection with the system of
franchising of goods and services. A franchise or distributorship is a business arrangement
whereby the reputation, technical information and expertise of one party are combined with
the investment of another party for the purpose of selling goods or rendering services directly
to the consumer. The outlet for the marketing of such goods and services is usually based on
a trademark or service mark or a trade name and a special dcor (the look) or design of the
premises. The license of such a mark or name by its owner is normally combined with the
supply by that owner of know-how in some form, either technical information, technical
services, technical assistance or management services concerning production, marketing,
maintenance and administration.

A franchise is a license issued to someone to operate a business using a common brand name,
a common operating support system and involving the payment of initial and/or ongoing fees.
If the company you were talking to has those three components as part of their offering, then
they are in fact offering a franchise, whether or not they choose to call it a license.

Bilateral Investment Treaties
A bilateral investment treaty (BIT) is an agreement establishing the terms and conditions for
private investment by nationals and companies of one state in another state. This type of
investment is called foreign direct investment (FDI). BITs are established through trade pacts.
A nineteenth-century forerunner of the BIT is the friendship, commerce, and navigation
treaty (FCN).
Most BITs grant investments made by an investor of one Contracting State in the territory of
the other a number of guarantees, which typically include fair and equitable treatment,
protection from expropriation, free transfer of means and full protection and security. The
distinctive feature of many BITs is that they allow for an alternative dispute resolution
mechanism, whereby an investor whose rights under the BIT have been violated could have
recourse to international arbitration, often under the auspices of the ICSID (International
Center for the Settlement of Investment Disputes), rather than suing the host State in its own
courts.
The world's first BIT was signed on November 25, 1959 between Pakistan and Germany.
There are currently more than 2500 BITs in force, involving most countries in the world.
Influential capital exporting states usually negotiate BITs on the basis of their own "model"
texts (such as the US model BIT).
Criticism
NGOs have spoken against the use of BITs, stating that they are mostly designed to protect
the foreign investors and do not take into account obligations and standards to protect the


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environment, labor rights, social provisions or natural resources. Moreover when such clauses
are agreed upon the formulation is legally very open-ended and unpredictable

LIST OF COUNTRIES WITH WHOM BILATERAL INVESTMENT PROMOTION AND PROTECTION
AGREEMENTS (BIPA) HAS BEEN SIGNED (AS ON DECEMBER, 2013) BY INDIA
(HTTP://FINMIN.NIC.IN/BIPA/BIPA_INDEX.ASP)
S.N Country Date of Agreement Date of Enforcement
1.
Unit ed Kingdom(106 KB)
14t h March 1994 6th January 1995
2.
Russian Federat ion(101 KB)
23rd December 1994 5th August 1996
3.
Germany(117 KB)
10t h July 1995 13t h July 1998
4.
Malaysia(141 KB)
3rd August 1995 12t h April 1997
5.
Denmark(134 KB)
6th Sept ember 1995 28t h August 1996
6.
Turkmenist an(105 KB)
20t h Sept ember 1995 27t h February 2006
7.
Net herlands(101 KB)
6th November 1995 1st December 1996
8.
It aly(109 KB)
23rd November 1995 26t h March 1998
9.
Tajikist an(219 KB)
13t h December 1995 23rd November 2003
10.
Israel(113 KB)
29t h January 1996 18t h February 1997
11.
Sout h Korea(106 KB)
26t h February 1996 7th May 1996
12.
Poland(106 KB)
7th October 1996 31st December 1997
13.
Czech. Republic(112 KB)
11t h Oct ober 1996 6th February 1998
14.
Kazakhst an(110 KB)
9th December 1996 26t h July 2001
15.
Sri Lanka(102 KB)
22nd January 1997 13t h February 1998
16.
Viet nam(102 KB)
8th March 1997 1st December 1999
17.
Oman(108 KB)
2nd April 1997 13t h Oct ober 2000


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18.
Swit zerland(100 KB)
4th April 1997 16t h February 2000
19.
Egypt (109 KB)
9th April 1997 22nd November 2000
These contracts cover several aspects some of them are as follows:
Treatment of investments
(1) Each Contracting Party shall in its territory accord to investments made by Investors of the other
Contracting Party fair and equitable treatment which In no case shall be less favorable than that
accorded to the investments of Its own investors or to Investors of any third state, whichever is the
more favorable from the point of view of the investor.

(2) Each Contracting Party shall in its territory accord to investments of investors of the other
Contracting Party, as regards their management, maintenance, use, enjoyment or disposal of their
investment, fair and equitable treatment which in no case shall be less favorable than that accorded to
investments of Its own Investors or to investors of any third State, whichever of these standards is the
more favorable from the point of view of the Investor.

(3) In addition each Contracting Party shall accord to investors of the other Contracting Party
Treatment which shall not be less favorable than that accorded to investors of any third state.
Rules on currency transfer
(1) Each Contracting Party shall with respect to investments in territory by investors of the other
Contracting Party allow the free transfer of:
(a) The initial capital and any additional capital for the maintenance and development of an
investment;
(b) The invested capital or the proceeds from the sale or liquidation of all or any part of an
investment:
(c) Interest, dividends, profits and any other returns realized;
(d) Repayments of any loans, including interests thereon, relating to the investment;
(e) Payments of royalties and services fees relating to the investment;
(f) Unspent earnings and other remunerations of personnel engaged from abroad in connection with
an Investment;
(g) Compensation, restitution, Indemnification or other settlement pursuant to Articles 5 and 6.

(2) Transfers of payments under paragraph 1 of this Article shall be affected without undue delay and
in a freely convertible currency.

(3) A payment shall be deemed to have been made without undue delay if affected within such period
as is normally required for the completion of transfer formalities. The period shall commence on the
day in which the relevant request has been made, with full documentation and Information, and may
on no account exceed two months.



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(4) Transfers shall be made at the market rate of exchange existing on the date of transfer with respect
to spot transactions in the currency to be transferred. If a market rate is unavailable, the rate to be used
will be the most recent exchange rate applied to inward Investments.

Expropriation and Compensation
(1) Investments of Investors of each Contracting Party shall not be nationalized, expropriated or
subjected to measures having effect equivalent to nationalization or expropriation (hereinafter
referred to as expropriation) In the territory of the other Contracting Party except for a
public purpose authorized by and carried out In accordance with its laws, on a non
discriminatory basis and against fair and equitable compensation.
(2) Such compensation shall amount to the fair market value of the Investment expropriated
immediately before the expropriation or impending expropriation became known in such a
way as to affect the value of the investment. Compensation shall be paid without undue delay
and include interest at a commercial rate established on a market basis from the date of
expropriation until the date of payment.
(3) The investor affected shall have a right to prompt review under the law of the Contracting
Party making the expropriation, by a judicial or other competent and independent authority of
that Contracting Party, of its case of the valuation of its investment, and of the payment of
compensation, in accordance with the principles set out in paragraph 1 of this Article.
(4) Where a Contracting Party expropriates the assets of a company which is Incorporated or
constituted under the law in force in any part of its own territory, and in which investors of
the other Contracting Party own shares, it shall ensure that the provisions of this Article are
applied to the extent necessary to ensure fair and equitable compensation in respect of their
investment to such investors of the other Contracting Party who are owners of those shares.