Data Rooms, Legal Compliances and Merger And Acquisitions In India

Data rooms are maintained by companies and organisations to manage and make available companies related information and documents so that they can be analysed and inspected by authorised persons and companies.

Data rooms are used for different types of transactions and multiple stakeholders these days. Vendors use data rooms in the case of a property, merger and acquisition, legal due diligence, share sale, etc. Similarly, authorities engaged in public private partnerships (PPPs) prefer to disclose a large amount of confidential data to proposed bidders during the due diligence process.

The traditional data room that is used in this regard is located at a secured physical location to which limited and authorised access is granted to selective people only. It is generally located at the vendor’s offices or at their lawyers or at some other secured place, which the bidders and their advisers will visit in order to inspect and report on the various documents and other data made available.

Often only one bidder at a time will be allowed to enter and if new documents, or new versions of documents are required these will have to be brought in by courier as hardcopy. Teams involved in large due diligence processes comprise of number of experts in different fields and so the overall cost of keeping such groups on call near to the data room is often extremely high.

Establishment of virtual data rooms (VDRs) is considered as a viable and cost effective alternative to traditional data rooms. Electronic legal due diligence relies heavily upon virtual data rooms instead of traditional data rooms. In fact, corruption and technology related legal due diligence may use VDRs in future.

A VDR is essentially a hosted website with limited and controlled accessibility to authorised personnel only. VDR uses secure log in credentials, as supplied by the vendor/authority, which can be modified or disabled at any time by the vendor/authority in appropriate situations. Such log in credentials can be used by the bidders and their advisers to gain access to relevant documents and information.

Obviously, the documents and information is sensitive and confidential and technological safeguards and restrictions should be applied to the viewers' ability to release this to third parties by forwarding, copying or printing. Technological solutions like digital rights management is one example of such technological safeguards. Cyber law and cyber security due diligence must also be undertaken by various stakeholders.

The cyber law trends in India 2012 by Perry4Law and Perry4Law Techno Legal Base (PTLB) have clearly projected that cyber law due diligence in India would going to increase. In fact cyber law due diligence for Indian companies has become so important that it must be made a part of their policies and corporate strategies.

Similarly, e-discovery in India is also going to increase the demands for data rooms and virtual data rooms in India. E-discovery services in India are still evolving but e-discovery for social media in India is one area that has tremendous potential in India and world wide.

Data rooms and virtual data rooms also facilitates mergers and acquisition and legal due diligence exercises. The merger and acquisition trends in India 2011 have shown a decline in merger and acquisition transactions in India except for few areas. However, banking related mergers and acquisitions in India is going to increase and e-legal due diligence in India may be involved in such mergers and acquisitions in India.

Virtual data rooms can also used for legal, accounting, investment banking and private equity companies performing mergers and acquisitions, fundraising, insolvency, corporate restructuring, and joint ventures. India may soon realise the benefits of virtual data rooms for merger and acquisition and other purposes.

Electronic Discovery (E-Discovery) Services In India

Electronic discovery (e-discovery) is a process whereby the electronically stored information (ESI) is acquired and exchanged in an electronic format so that the adjudicating authority can analyse and adjudicate on the basis of such information.

The stages and process of e-discovery involves collection, preparation, review and distribution of electronic documents associated with private investigations, governmental actions or legal proceedings. These documents include emails, files, memos, documents, spreadsheets, images, presentations etc.

When the facts and evidence based upon e-discovery are required to be proved in a court of law, e-discovery process in itself is not enough. In such cases, a more detailed and legally admissible cyber forensics process is required.

A number of professionals are involved in e-discovery. This includes forensic investigators, lawyers and IT managers, first responders, etc. Each may have his own role and understanding of the issue. However, to be admissible in court, recovered evidence must satisfy the requirements of cyber forensics.

Cyber forensics is a more detailed and domain specific exercise that must be undertaken by experts only. Cyber forensics is typically techno legal in nature whereas e-discovery may be just technical. So cyber forensics is different from e-discovery.

In e-discovery process relevant data and information is identified and placed on legal hold by the lawyers. Evidence is then extracted and analysed using cyber forensic procedures, and is usually converted into PDF or TIFF form for use in court.

E-discovery related issues are of tremendous importance for both litigation and non litigation related matters. Business houses and even banks must have e-discovery and due diligence mechanisms at their places. Further, e-discover is also an essential prerequisite for successful litigation and dispute resolution.

The scope of e-discovery in India is going to increase and e-discovery skills development in India is urgently required in this regard. Cyber skills developments in India need to be ensured so that we have enough number of skilled and knowledgeable e-discovery professionals in India. Perry4Law Techno Legal Base (PLTB) is providing techno legal trainings for chief information officers (CIOs) in India who are primarily responsible for managing e-discovery issues. The career scope of such CIOs is great in India as Reserve Bank of India (RBI) has made appointment of CIOs mandatory for all banks in India.

Further, e-discovery outsourcing, LPO and KPO services in India are going to increase in near future. PTLB is also the exclusive techno legal e-discovery related litigation, LPO and KPO services provider of India and world wide. Perry4Law and PTLB are also managing the exclusive techno legal Digital Evidencing and E-Discovery Centre of India. It is taking care of innovative digital evidence LPO and KPO and other techno legal digital evidencing and e-discovery related issues. We hope these initiatives of PTLB would be beneficial for all stakeholders.