The Adani Case
Extradition and U.S. Andti-Bribery Laws
INTRODUCTION
**Shravan Anande
The recent indictment of Indian billionaire Gautam Adani by U.S. prosecutors has sent shockwaves through both financial and legal corridors. Accused of orchestrating a multi-billion-dollar bribery and fraud scheme to secure solar power contracts, the charges include foreign bribery, securities fraud, and conspiracy.
As the Adani Group vehemently denies these allegations, branding them “baseless,” the case raises complex legal and jurisdictional questions.
The stakes are high, not only for Adani and his sprawling conglomerate but also for the global legal frameworks governing corporate accountability and transnational crime.
This article seeks to explore the legal dimensions of the case, focusing on the interplay between U.S. and Indian extradition treaties and also the scope of U.S. anti-bribery laws in the present context. As Adani’s legal battles unfold, they could set a precedent for prosecuting high-profile corporate executives on foreign soil.
Source: Is Gautam Adani Really Guilty Of $265 Million Bribery Case? Facts Unfolded, Chegg.in, November 2024.
NAVIGATING EXTRADITION CHALLENGES: U.S. AND INDIAN TREATIES IN THE ADANI CASE
Extradition can be defined as an essential legal instrument through which an individual who is suspected or convicted of a crime can be transferred from one country to another to face trial.
The extradition of Gautam Adani, should the U.S. formally request it, will test the robustness of the extradition treaty between India and the United States. Signed in 1997, this treaty provides a framework for the transfer of individuals accused or convicted of crimes in one country to face prosecution or serve sentences in the other. However, the extradition process is fraught with legal and diplomatic complexities that are likely to play a significant role in this high-stakes case.
Under the treaty, a principle known as “dual criminality” was emphasized on. This principle lays down that extradition can only proceed if the alleged offenses are recognized as crimes in both jurisdictions. While bribery and securities fraud are criminalized in both India and the United States, the political and economic sensitivities surrounding the Adani case could influence India’s stance. For instance, allegations of bribing Indian officials may complicate India’s willingness to extradite, as the case could implicate domestic actors or institutions, raising questions of national sovereignty.
In the case of United States v. Michael Tobin (India-UK Extradition, 2008) Michael Tobin was extradited from India to the United Kingdom under a similar extradition treaty. In this particular case the Indian judiciary applied the principle of “dual criminality” and allowed extradition because the alleged offense i.e.- fraud—was criminalized in both jurisdictions.
In Adani’s case, the offenses of bribery, securities fraud, and conspiracy are recognized crimes under Indian law under statutes such as Prevention of Corruption Act, 1988 and Bhartiya Nyaya sanhita,2023. Thus, dual criminality should not pose a significant barrier. However, Adani’s defense could raise arguments distinguishing the scope of these laws in India vis-a-vis the U.S.
In the ongoing high-profile case India v. Vijay Mallya (India-UK Extradition, 2018), Indian authorities seek the extradition of businessman Vijay Mallya from the UK on charges of financial fraud. The UK court found sufficient prima facie evidence of wrongdoing but is delaying extradition proceedings due to procedural appeals.
Adani could similarly challenge the admissibility of evidence and fairness of the extradition request. The extensive “paper trail” cited by U.S. prosecutors may face scrutiny in Indian courts for admissibility under Indian evidence law now Bhartiya Sakshya Adhiniyam,2023. Delays caused by such procedural challenges could be significant.
Additionally, the treaty allows India to deny extradition if the charges are deemed politically motivated or if there is a risk of inhumane treatment. Adani’s legal team could argue that the charges are politically driven, given their potential impact on India’s business environment and global reputation. Such arguments could prolong the extradition process, with Indian courts playing a pivotal role in determining whether to grant the U.S. request.
In case of Mohan Lal Narula v. Union of India (India-USA Extradition, 2005) question was raised that whether a U.S. request for extradition complied with procedural requirements under the treaty. The Indian judiciary emphasized that extradition requests must meet stringent evidentiary standards to prevent abuse of the process.
Adani could argue that the U.S. prosecution must provide evidence demonstrating probable cause under Indian evidentiary standards. Any perceived gaps in the U.S. case could delay or thwart extradition efforts, particularly if Indian courts find that the evidence is insufficient.
Even if the Indian judiciary greenlights the extradition, the process is unlikely to be swift. Defendants often employ a range of legal tools to delay or block extradition, including appeals to higher courts. Moreover, extradition in high-profile cases often becomes a matter of international diplomacy, requiring careful negotiation between the two governments to balance legal obligations with political considerations.
In this context, the Adani case underscores the broader challenges of enforcing transnational anti-corruption laws and highlights the importance of international cooperation in addressing white-collar crime. The outcome of this extradition battle will not only shape the trajectory of the charges against Adani but also set a critical precedent for the enforcement of anti-bribery statutes in a globalized world.
THE EXTRATERRITORIAL SCOPE OF U.S. ANTI-BRIBERY LAWS
The U.S. Foreign Corrupt Practices Act (FCPA) of 1977 is one of the most far-reaching anti-bribery laws globally, allowing U.S. authorities to prosecute foreign nationals and entities for corrupt practices that have a nexus to the U.S. The FCPA criminalizes (i)The bribery of foreign officials to obtain or retain business (ii)The failure to maintain accurate books and records, or implement adequate internal controls.
The law’s extraterritorial reach hinges on its ability to assert jurisdiction over transactions that involve U.S. financial institutions, even if conducted indirectly. This expansive jurisdiction covers companies listed on U.S. exchanges, transactions conducted in U.S. dollars, or any communication routed through U.S. servers
The allegations against Gautam Adani and the Adani Group, involving the payment of $265 million in bribes to Indian officials to secure contracts for India’s largest solar power project, fall squarely within the FCPA’s ambit.
Adani Group allegedly conspired to pay Indian government officials to secure lucrative solar power contracts worth an estimated $2 billion over 20 years. This directly contravenes the FCPA’s prohibition on bribing foreign officials.
The indictment indicates that funds for the alleged bribes were routed through U.S. financial systems, establishing a jurisdictional nexus. The mere passage of transactions through U.S. banks triggers FCPA jurisdiction, even if the misconduct occurred outside the U.S.
The prosecutors allege deliberate concealment of these payments, aiming to deceive U.S. investors and regulators. Such actions exacerbate the severity of the violations under FCPA scrutiny.
The expansive reach of U.S. anti-bribery laws necessitates greater due diligence in international deals. Firms involved in infrastructure projects, such as Adani’s solar energy contracts, face heightened scrutiny over government interactions and contract procurement practices.
This highlights the global business community’s vulnerability to U.S. enforcement actions, irrespective of their primary domicile.
The Adani case also demonstrates growing cooperation between U.S. authorities and international partners in tackling corruption. It signals a trend where firms may face coordinated investigations across jurisdictions, raising the stakes for compliance lapses.
Source: Gautam Adani: Mr. Resilient, India Today, May 27,2023.
CONCLUSION
The case against Gautam Adani and the Adani Group highlights the expansive reach of U.S. anti-bribery laws, particularly the Foreign Corrupt Practices Act (FCPA), and its implications for global corporate governance. The charges of bribing Indian officials to secure contracts emphasize the need for businesses to follow ethical practices and maintain transparency. The extradition process between the U.S. and India adds legal complexity, showcasing the challenges of enforcing foreign charges. It is important to remember that Adani, like any defendant, is presumed innocent until proven guilty, and the legal process must unfold to determine the merits of the case. This case underscores the growing global scrutiny on corporate conduct, urging businesses to strengthen compliance and internal controls to avoid severe legal and reputational risks.
**Shravan Anande is a third-year undergraduate law student at the NALSAR University of Law, Hyderabad.
Disclaimer: The views expressed in this blog do not necessarily align with the views of the Vidhi Centre for Legal Policy.
