Issue #62: The future of legal is…
Welcome to the 62nd edition of OIA and happy Chinese New Year!
Here are the latest 🌶 headlines in APAC:
Ling Yah
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This is TOO MUCH!
In a high-stakes tax dispute, Volkswagen's Indian subsidiary, Škoda Auto Volkswagen India Private Limited (“Volkswagen“), has challenged an ‘impossibly enormous’ USD 1.4 billion tax demand in the Mumbai High Court.
The case, set for hearing on 5 February 2025, revolves around a fundamental question of import classification that could reshape automotive manufacturing strategies in India.
🍿 What Happened?
At its core, this is a clash of interpretations: Volkswagen imports individual car components separately, attracting 5-15% tax rates, rather than as completely knocked-down units, which face 30-35% duties.
The company argues that its ‘part-by-part import’ approach was transparent and received government approval in 2011.
However, Indian authorities contend that Volkswagen used specialised software to strategically fragment bulk vehicle orders into 700-1,500 separate parts, allegedly circumventing higher duties.
The stakes are particularly high for Volkswagen, whose Indian operations reported just USD 11 million in profit against USD 2.19 billion in sales for 2023-24.
👀 Conclusion
In a country known for its high import duties – Tesla notably voiced concerns over India’s high taxes on imported EVs – this case will definitely be one to watch to understand how India will be treating foreign corporations in future tax-related disputes!
The Future of the Legal Industry?
Are we witnessing a revolution in the legal industry right now?!
🍿 What Happened?
A Hong Kong marketing consultancy, Worldwide A-Plus, fell victim to a false representation scam, losing USD 2.6 million in Tether (a stablecoin pegged to the US dollar) to unknown fraudsters. But instead of hitting the usual jurisdictional roadblocks, the Hong Kong High Court embraced innovation.
On 5 December, the court issued a tokenised legal injunction served directly to the unknown holders of two cryptocurrency wallets on the Tron blockchain.
What's particularly clever about this approach is how it transforms blockchain's anonymity from a shield into a sword. Unlike traditional service methods that can be dodged or ignored, these tokenised notices are permanently etched into the blockchain.
It's like placing an immutable digital police tape around stolen assets – you can't pretend you didn't see it.
👀 Unfortunately…
While the court successfully froze some assets, about USD 1.6 million had already vanished into exchanges by the time the legal notice landed.
Unfortunate, but there’s a silver lining – a signal of how justice is being reshaped in this digital age!
You have no right?!
OpenAI is on everyone’s lips so it’s only fitting to talk about them today… in the Indian context!
🍿 What Happened?
If you’ll recall, back in OIA #58, we first talked about the OpenAI/ANI drama in India.
In gist - ANI claimed in its November filing that OpenAI was using ANI’s decades’ worth of content to train its language model without a lawful licence and sought damages of 20 million rupees (USD 230,000).
Now: OpenAI is arguing that Indian courts can't hear the case as the company and its servers or data centres aren’t located in India. In addition, its chatbot was also not trained in the country!
If this feels like déjà vu, it's because we've seen this movie before with Telegram, and spoiler alert: it didn't end well for them.
The case has drawn India's media heavyweights into the ring, with publishing giants and media groups owned by billionaires Gautam Adani and Mukesh Ambani joining forces against OpenAI. What started as a copyright dispute has evolved into quite the fascinating test case for tech jurisdiction in this digital age.
👀 Hmm
While OpenAI's CEO Sam Altman was in Delhi this February to discuss India's plan for a low-cost AI ecosystem with Indian IT Minister Ashwini Vaishnaw, his legal team was simultaneously arguing the company is beyond Indian courts' reach.
Talk about mixed signals!
Spotlight: Ryan Cable
International arbitration specialist recently returned to Australia from London (chasing the sun!).
Food Reveal
Time for some roast duck?
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David Grief was described as "the Law's Middleman" (Business Times, 2021). You can reach out to him at dg@davidgrief.com if you need help identifying the right lawyer, arbitrator or expert for your matters, or even if you just want to grab a drink 🍵🍺 with someone who has managed and mentored lawyers for almost 5️⃣0️⃣ years!