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Mumbai Attacks Call Reed Smith Lawyers to Action
The Legal Intelligencer
December 02, 2008
The legal, business and political implications of the recent terror attacks in Mumbai are undoubtedly plenty, but lawyers with personal ties to India's largest city were faced with a more visceral search-and-rescue mission last week.
More than 170 people died at the hands of 10 gunmen over the course of more than three days. But for the aunt and uncle of a Reed Smith partner, their survival tactics, combined with the help of the firm's India practice leader, made for a happy outcome.
Like several personal stories that have emerged in the wake of the attacks, Marilyn and Joe Ernsteen's is one of survival.
The couple was staying in the Taj Mahal Palace & Tower Hotel, where a days-long standoff had ensued between militant gunmen and Indian security forces. When Chicago-based Reed Smith partner Bradley Schmarak heard Wednesday that the Ernsteens, his aunt and uncle, were in the midst of the attacks, he turned to the U.S. Embassy and fellow partners with ties to the country to see if anyone could get information on his family's situation. Calls to his aunt and uncle's cell phones were to no avail.
Ajay Raju is vice chairman of the firm's business and finance department and also heads up its India practice group. It was his role as president of the Global Indian Chamber of Commerce, however, that was most useful last Wednesday night.
When Raju saw the e-mail from Schmarak that night, his first call was to a contact from the chamber in Mumbai. It was early in the crisis, and the contact thought the gunshots he was hearing were of a relatively typical "encounter" between the local police and mafia members. It turns out the gunshots that he and Raju could hear during their phone conversation were those of the terrorists taking over Nariman House, home to the outreach center of the Jewish Chabad movement.
But unaware at the time, and in hindsight perhaps foolishly, Raju said, his contact left the security of his house to go to the Taj Mahal hotel in an effort to get information on the Ernsteens. Raju also made a call to a prominent art dealer and well-connected Indian businessman out of New Delhi who also tried to make several calls on the Ernsteens' behalf. But with the city in near lockdown, Raju said it was difficult getting information from anywhere -- particularly anything beyond hearsay or U.S. news coverage.
Raju said it was a nerve-wracking situation as everything moved slowly. No one knew if the Ernsteens were taken hostage, part of a group that escaped or two of the reported casualties.
In the end, it was the Ernsteens themselves who secured their safety. They were set to leave for Chicago the next day but got a call from the hotel to stay in their rooms. They had been holed up in their hotel room from about 11 p.m. Wednesday to 10 a.m. Thursday.
But when the fire from the bombs started pouring smoke onto their floor, they had a decision to make.
"They had the unenviable task of deciding whether to stay put and risk being overwhelmed by the smoke and fire or leaving and risk whatever would come their way in the hallways," Schmarak said.
They ultimately decided to take a chance in the halls, and, after checking to see if the coast was clear, the couple ran down the hall to a stairwell that took them up to the roof. They then climbed down a fire escape to the busy street, where police officers and army personnel told them things were almost under control and that they should come back in a few hours. So after roaming the streets for a while and given the opportunity by a kind stranger to clean up a bit, the couple returned and was helped to get into a new hotel. They returned to Chicago Saturday evening to a media frenzy and lots of happy family members.
When she was leaving the room, Marilyn thought far enough ahead to bring her purse and their passports. She also brought with her the book she was reading at the time, "The Lucky One," by Nicholas Sparks.
One of the people on their tour wasn't as lucky, Raju said, and was killed in the attacks. Schmarak said that man was on vacation with his wife for their anniversary.
Word of the Ernsteens' safe escape made it to Schmarak and the rest of the firm on Thursday, which Raju said meant for an "actual Thanksgiving." Schmarak said he found out about his family's escape when his uncle e-mailed him to ask whether Schmarak liked the Ernsteens' choice of hotels.
Even though there weren't immediate answers, Raju said having a firm with the reach and contact base of Reed Smith proved helpful in a time when even the State Department wasn't sure what was going on.
BACK TO BUSINESS
With the safe return of the Ernsteens, Raju and other members of the firm's India practice are now focused on fielding calls from clients and chamber members concerned about business prospects in the country.
Raju said that while India has the highest terrorism-related death toll outside of Iraq, this event was a little different and brought into stark reality the need for better political leadership and a more sophisticated security infrastructure. The latest attacks shook "the foundation of the economy" because it wasn't just domestic terrorism but an effort to bring tension to India's relations with the United States and the rest of the world, Raju said.
The lack of preparedness in terms of command centers and reaction time also shows that the country is in the infancy stages of setting up an effective security system, he said. That could make businesses think twice about entering the market.
All of this could have a "tremendous ripple effect," he said, that draws into question India's economy and its viability as a global business center.
Raju said he has been on the phone in the past few days with several clients inquiring about the business effects of the terror attacks. He said only one has decided to hold off on entering the Indian market until the end of the first quarter 2009. That was because of a combination of last week's events and a shaky real estate market, he said.
His contacts from the Global Indian Chamber of Commerce in Mumbai are telling Raju that despite an Indian stock market that was up on Friday, business seems sharply down. The city is the financial capital of the country, representing a little more than 5 percent of India's gross domestic product and bringing in $8 billion in corporate taxes, he said.
"Because of Mumbai's importance to the Indian and the global economy, failure is not an option," Raju said.
On the whole, he said he views the attacks as having only a short-term effect on the business community. He pointed to the legal outsourcing community as just one example. There were more than 70 new companies created in India in the last few months to handle legal work outsourced from U.S. firms. And with the U.S. economy in such dire straits and clients looking to cut back costs, outsourcing will be a necessary tool for firms, Raju said.
"So that type of work, terrorism or not, will continue to prosper," he said.
Raju pointed to Brazil, Russia, India and China as countries expected to be hit by the global economic downturn. Before last week, it was thought India would be the first to come out of the downturn because of a smaller reliance on exports and the global economy and a stable inflation rate, he said. Last week's events may delay that recovery by a few months, he said.
India is a leader in many economic areas, such as technology and pharmaceuticals, but it has a lack of political leadership coupled with a cynicism by the younger generation toward its government, Raju said, adding he hopes this latest attack serves as a reason for the next generation to become more active in their government rather than just criticize it.
