The shipbuilding and ship repair sector in India plays a pivotal role in bolstering the country’s maritime infrastructure and trade capabilities. However, businesses operating in this domain face a multitude of legal, regulatory, and compliance challenges. These challenges span environmental regulations, taxation norms, labour laws, and contractual obligations, often compounded by potential exposure to white-collar criminal litigation.
At Duke & Baron, we are committed to assisting our clients in navigating this intricate legal landscape. With our deep expertise in maritime law, corporate governance, and regulatory frameworks, we offer comprehensive solutions to address the multifaceted needs of our clients. From proactive compliance measures to robust representation in judicial and quasi-judicial proceedings, we ensure that our client’s interests are safeguarded at every stage.
1. Primary Legal and Compliance Regulatory Challenges
1.1 Environmental Compliance
- Environment Protection Act, 1986 (EPA): Mandates environmental impact assessments (EIA) and strict adherence to pollution control norms. Non-compliance can result in penalties, closure orders, and reputational damage.
- Ship Recycling Act, 2019: Aligns with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, regulating safe recycling practices and hazardous material management (e.g., asbestos, heavy metals).
- Coastal Regulation Zone (CRZ) Notifications, 2011: Governs shipbuilding and repair activities in coastal areas, requiring prior clearances.
1.2 Customs and Taxation Regulations
- Customs Act, 1962: Requires accurate declarations for imported ship components to avoid penalties for undervaluation or misclassification.
- Goods and Services Tax (GST) Act, 2017: Ensures correct application of GST rates for shipbuilding and repair services, with provisions for input tax credit management.
1.3 Labour and Employment Laws
- Factories Act, 1948 and Occupational Safety, Health and Working Conditions Code, 2020: Mandate worker safety, welfare provisions, and adherence to health standards.
- Contract Labour (Regulation and Abolition) Act, 1970: Governs registration and compliance requirements for contract labour employment.
1.4 Maritime Safety and Certification
- Merchant Shipping Act, 1958: Covers ship construction, maintenance, and safety regulations enforced by the Directorate General of Shipping (DGS).
- Indian Register of Shipping (IRS): Ensures compliance with certification standards in alignment with the International Maritime Organization (IMO).
1.5 Licensing and Permits
- Business permits and environmental clearances issued by state maritime boards or the Ministry of Ports, Shipping and Waterways.
- Compliance with the Foreign Trade (Development and Regulation) Act, 1992, for import-export activities.
1.6 Contractual Disputes
- Breach of contract claims related to delayed ship deliveries or substandard repairs often involve arbitration or litigation.
1.7 Foreign Direct Investment (FDI) and Trade Restrictions
- Foreign Exchange Management Act, 1999 (FEMA): Regulates FDI in the shipbuilding sector, categorized under 100% automatic approval but subject to sector-specific guidelines.
2. White-Collar Criminal Trials Faced by Companies
2.1 Tax Evasion and Customs Fraud
- Misrepresentation of import invoices to evade customs duties, leading to prosecution under the Customs Act, 1962.
- GST-related violations prosecuted under the Central Goods and Services Tax (CGST) Act, 2017.
2.2 Environmental Violations
- Illegal discharge of hazardous waste or pollutants into water bodies, attracting penalties under the Environment Protection Act, 1986, and Water (Prevention and Control of Pollution) Act, 1974.
2.3 Corporate Fraud and Mismanagement
- Falsification of financial statements or misrepresentation of company assets, prosecuted under the Companies Act, 2013, and Bharatiya Nyaya Sanhita (BNS) of 2024 (e.g., Section 415 for fraud).
2.4 Labour Law Violations
- Non-compliance with statutory wages or occupational safety standards, penalized under the Minimum Wages Act, 1948, and Factories Act, 1948.
2.5 Money Laundering and Corruption
- Financial irregularities and bribery charges prosecuted under the Prevention of Money Laundering Act, 2002 (PMLA).
3. How Duke & Baron Can Assist Clients
3.1 Regulatory Compliance and Advisory Services
- Environmental Compliance: Assisting with EIA report preparation, environmental clearances, and adherence to the Ship Recycling Act, 2019.
- Taxation and Customs: Advising on GST compliance, filing accurate returns, and ensuring customs documentation meets regulatory standards.
- Labour Law Compliance: Conducting audits, drafting employment contracts, and establishing grievance redressal mechanisms.
3.2 Contract Drafting, Negotiation, and Review
- Drafting detailed contracts for shipbuilding and repair services with clear terms on deliverables, timelines, and dispute resolution.
- Negotiating with vendors and contractors to safeguard client interests and minimize risks.
3.3 Corporate Secretarial Support
- Ensuring compliance with the Companies Act, 2013, including statutory filings, maintaining registers, and supporting board meetings.
- Conducting due diligence for mergers, acquisitions, and joint ventures in the maritime sector.
3.4 Representation Before Judicial and Quasi-Judicial Bodies
- Commercial Suits: Advocating in disputes related to contracts or warranties before civil courts, arbitration panels, and the National Company Law Tribunal (NCLT).
- Criminal Trials: Defending against allegations of tax evasion, fraud, or environmental violations before session courts and High Courts.
- Regulatory Investigations: Assisting during inquiries by the Directorate General of Shipping (DGS), Central Board of Indirect Taxes and Customs (CBIC), and environmental regulators.
3.5 Crisis Management and Litigation Support
- Providing immediate strategies during regulatory raids, audits, or arrests. Preparing bail applications and pre-arrest defences.
- Filing writ petitions, appeals, and reviews to challenge unfavourable orders from authorities or lower courts.
3.6 Environmental, Social, and Governance (ESG) Advisory
- Guiding clients in integrating ESG standards into business operations, ensuring legal compliance, and building a sustainable business reputation.
4. Expanded Litigation Support
4.1 Pre-Litigation Strategy
- Conducting risk assessments, exploring mediation or conciliation options, and advising on proactive dispute resolution.
4.2 Trial Representation
- Representing clients in criminal, civil, and commercial matters in district courts, High Courts, and the Supreme Court of India.
4.3 Post-Litigation Support
- Assisting in the enforcement of court judgments or arbitral awards and guiding restructuring operations to mitigate future risks.
By leveraging deep expertise in maritime law, corporate governance, and regulatory compliance, Duke & Baron provides tailored legal solutions to help shipbuilding and ship repair companies navigate complex challenges. Our proactive approach ensures operational efficiency, legal adherence, and robust defence against litigation risks.