Thursday, 19 September 2019

Will Justice Kabir Rule For Cheaper Drugs?

Updated: October 6, 2012 11:13 am

A guest is known as atithi (i.e. “dateless”) in the ancient language of Sanskrit that has been the linguistic foundation for many languages in Asia and Europe. “Dateless” because the host is not supposed to ask the guest to leave but must entertain the person until the guest leaves on his or her own volition. Another related Sanskrit saying is Atithi Daivo Bhava, which roughly translates as “the guest is supreme”. In other words, the host has to follow the wishes of the guest in all matters relating to the two of them. Pankaj Mishra has pointed out in his book From the Ruins of Empire how the European powers and later Japan and Russia forced the Emperor of China to give one decree after the other which granted foreign countries special concessions.

What Mishra described took place more than a century ago, yet the same sort of behaviour can be seen in the 21st century in dealings between the NATO bloc and the rest of the world. The bloc would like to ensure that concessions be given to it, while denying the same to others. European shipping companies are among those who have long followed a policy of making trade from East to West much more expensive than from West to East. Indeed, the latter enjoys low freight charges that are subsidised by higher charges levied on goods travelling from Asia to Europe and to the US.

Even recently, several European shipping companies have hiked up rates on items travelling from Asia to Europe, but not the other way around. European shipping lines gets much of their profit from Asia but penalise the continent by charging it more than they do customers in Europe who ship their products to Asia.

India is one of the few countries in the world that willingly accepts a foreign-born person—Sonia Gandhi—to be the the de facto head of the government. The Congress President has all the power without any of the legal responsibility, a state of affairs made possible by the Atithi Daivo Bhava tradition.

In keeping with this ancient tradition, Chief Justice Kapadia of the Supreme Court of India recently presided over two judgments, each of which favours outside entities. In the first, he and other distinguished judges of the Supreme Court ruled that Vodafone need not pay the $2 billion tax that the Ministry of Finance had imposed upon the company after it bought assets from Hutchison Whampoa without either company bothering to pay a rupee in capital gains tax to the national exchequer. In any other country, such a judgment would have raised a storm, because after all, it is the domestic tax-payer who will have to fill the $2 billion gap in the state’s coffers should Hutch and Vodafone avoid paying tax.

However, in India the judgment has been welcomed by commentators who see the “guests” (Vodafone and Hutch) as supreme. What a difference there is in attitudes in Asia and those in the member-states of NATO. Recently, a jury in the US awarded the atrocious sum of $1 billion in damages to Apple over Samsung, while in South Korea itself the judge awarded (much smaller) damages to both the companies. In the NATO bloc, courts routinely back local companies over competitors from Asia. However, in Asia, the courts are much more lenient towards foreign companies. Another judgment, again by a bench of the Supreme Court headed by the present Chief Justice, that takes away from Indian companies several of the rights they had to appeal to courts in India in cases of arbitration by foreign courts.

The Supreme Court of India has ruled that in such cases, the decision of the foreign arbitrator is final, and that there can be no appeal against the decision to courts in India. Now Indian litigants will perhaps have to knock at the doors of the International Court of Justice at The Hague, whose judgments seldom stray from the line favoured by members of NATO. Hence in cases involving a NATO-based entity and an Indian counterpart, it would be useless to the latter to appeal to the ICJ, in view of the propensity of that court to follow NATO logic in its judgments.

Given these two rulings of Chief Justice Kapadia and his court, foreign pharmaceutical companies are eagerly awaiting the decision of the Supreme Court on two pending cases. Should the judgments go in their favour, it would sharply increase their profits in India. Should they go against them, the cost of essential medicines would get sharply lowered in India and perhaps in other countries. However, the international pharna giants are “guests” in India and are therefore in effect demanding that the ancient principle of “the guest is supreme” be applied to them. One of them, a drug company based in Germany, wants to sell in India a year’s dosage of an anti-cancer drug for $ 60, 000.

In other words, those in the country who cannot afford such a huge sum of money can go prepare for their funeral arrangements. Those countries that are members of NATO have for years been protecting their high-cost pharmaceutical producers by slapping restrictions and lawsuits on Indian companies that come up with much cheaper options. As a consequence, millions suffer and many die from diseases because they cannot afford medicine to cure themselves. Those NATO-based governments that deliberately use the legal system to block access to cheap drugs need to be hauled up for human rights violations, but thus far, none of the NATO-based human rights organisations have seriously taken up such actions, which are clearly designed to protect the profits of a few pharma giants at the expense of billions of people.

The pharma giants, looking to the two judgments of Chief Justice Kapadia (relating to Vodafone and to the protection given to international arbitration) will be hoping that the Supreme Court of India will buttress their monopoly in the production and pricing of essential drugs. Chief Justice Kapadia retires in a short while. A brilliant and sensitive jurist, Altamas Kabir, succeeds him. Will Justice Kabir agree that Atithi Daivo Bhava, and that foreign pharma companies continue to have the right to charge $60, 000 and other extortionate sums to those seeking a a cure? Or will he give a judgment (against the foreign pharma companies) which ensures cheaper drugs for the billions? The days ahead will tell.

By MD Nalapat

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