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Supreme Court on Insolvency Resolution by Operational Creditors

[Akhil Kumar and Ayushi Singh are Fourth Year and Third Year BA LLB (Hons.) students respectively at NUALS, Kochi] Petitions filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (the Code) have received scrutiny before the adjudicating authority, being the National Company Law Tribunal (NCLT), the National Company Law Appellate Tribunal (NCLAT) as well as the Supreme Court on various...

Linde- Praxair Merger: Competition Assessment in the Industrial Gas Market

[Vaidehi Soni is a 4thYear B.A., LL.B. (Hons.) student at The National University of Advanced Legal Studies, Kochi] Background Linde Aktiengesellschaft (Linde) and Praxair, Inc. (Praxair), both international gasses and engineering companies primarily active in industrial gases, specialty gases, medical gases, related engineering and services sectors, entered into a business agreement wherein the...

RBI’s Measures for NBFCs and HFCs

[Vineet Ojha is a Manager at Vinod Kothari Consultants Pvt Ltd] In most developed nations, the bond market is often several multiples larger than the equity market. The same cannot be said about the India’s corporate bond market, as it is still underdeveloped and therefore unable to meaningfully share the credit burden of the banking system. To ease the funding strains non-bank lenders face and...

Resolving Ambiguities in CSR Provisions

[Bunny Sehgal is an Associate at Vinod Kothari & Co. and can be reached at [email protected]] With the enactment of the Companies Act, 2013 (‘Act’), India has become one of the leading countries to mandate spending on corporate social responsibility (‘CSR’) activities through a statutory provision. Since then CSR has become a topic of interest for corporates. Further, with the passage...

Call for Papers: NLIU Journal of Intellectual Property Law

[Announcement from the NLIU Journal of Intellectual Property Law] The Cell for Studies in Intellectual Property Rights (CSIPR), incorporated under the aegis of Prof. (Dr.) Ghayur Alam, Chair of IP Law at the National Law Institute University, Bhopal (NLIU), is now accepting submissions for Volume 8 of the NLIU Journal of Intellectual Property Law. About the Journal The NLIU Journal of...

Analyzing the Applicability of GAAR to Schemes of Arrangement

[Varun Kannan is a 4thyear student at NUJS, Kolkata]. In a recent post on this Blog, Prof. Umakanth Varottil has elaborately examined the NCLT decision rejecting the proposed scheme of merger of Gabs Investments Private Limited into Ajanta Pharma Limited. In this post, I shall specifically analyze the applicability of the General Anti-Avoidance Rules (“GAAR”) against a proposed scheme of...

Law on Corporate Opportunity: India at Crossroads

[Angad Singh Makkar is a 4th year BA LLB (Hons.) student at Jindal Global Law School in Sonipat, Haryana] The equitable rule of corporate opportunity, which aims to balance the fiduciary duty owed by a director to the company and the director’s serving of individual entrepreneurial interests, has been varyingly applied across several jurisdictions. Most notably, while the courts in the United...

Retrospective Operation of the Limitation Act: Impact on Insolvency Proceedings

[Vaidehi Soni and Pulkit Khare are 4th year B.A., LL.B. (Hons.) students at The National University of Advanced Legal Studies, Kochi] Background The Insolvency Bankruptcy Code, 2016 (“Code”) allows creditors to approach the adjudicating authority, being the National Company Law Tribunal (“NCLT”), to seek a collective procedure for insolvency resolution. However, there were rising concerns before...

Attachment of Property: Efficacy of the Fugitive Economic Offenders Act in the Backdrop of the Criminal Procedure Code

[Surya Rajkumar is a third year law student at the Jindal Global Law School, Haryana] Introduction The Fugitive Economic Offenders Act, 2018(the “Act”) came into force on the 21 April 2018. According to its preamble, the Act provides “for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts………”. While there are...

Liquidation Process (Second Amendment) Regulations: An Analysis

[Richa Saraf and Devisha Dhanuka are with Vinod Kothari Consultants Private Limited] By way of a notification dated 27 March 2018, the very first amendment was brought to regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Regulations”) with effect from 1 April 2018 to permit a sale of the corporate debtor as a going concern. The insertion was...

Supreme Court’s Balanced Approach to Damages under Contract Law

[Anujay Shrivastava is a 4th Year B.A., LL.B. (Hons.) student at Jindal Global Law School, Sonipat] Section 73 of the Indian Contract Act, 1872 governs the compensation for damages arising from a breach of contract or failure to discharge obligations resembling those created by contract, while section 74 governs the compensation for damages where penalty is stipulated in the contract. In either...

New Measures to Spur FDI in the Indian Defence Sector

[Bhavin Gada is a Partner and Soumya Shanker a Senior Associate at M/s Economic Laws Practice, Advocates and Solicitors. The views of the authors are personal] Timeline of Liberalisation of FDI Regime From 2000 to 2016, foreign investment in the Indian defence sector has been approximately USD 5.12 million. Looking at the total foreign investment inflows to India, one could say that this...

The Common Ownerships Conundrum

[Parag Srivastava and Poonam Pal Sharma are members of the law firm Nishith Desai Associates. The views represented in this post are strictly personal and do not represent the views of the firm] The insidious yet hitherto unspoken subject of horizontal shareholders has been in recent limelight due to its mention in the order by the Competition Commission of India (“CCI”) in its Ola Meru Cabs Case...

NCLT on Scheme of Arrangement and Tax Avoidance

Background Schemes of arrangement have been a useful method of implementing mergers and acquisitions in the Indian context. Historically under the Companies Act, 1956, schemes were supervised by the High Courts, but the Companies Act, 2013 conferred that jurisdiction upon the National Company Law Tribunal (NCLT). Under the regime set forth in the 1956 Act, the High Courts had adopted a largely...

Payments Regulatory Board: Merits and Criticisms

[Tishya Saran and Aayush Grover are both 5th year students of Government Law College, Mumbai] Introduction The Reserve Bank of India (“RBI”) and the Central Government seem to be embroiled in a regulatory tussle. It all started when an Inter-Ministerial Committee (the “Committee”) set up by the Department of Economic Affairs, in a report published by it (the “Report”), proposed the establishment...

Data Protection – Part 2: Impact on the Financial Segment

[Manal Shah is a B.A. LL.B. (Hons.) student at NUALS Kochi and runs the Securities Blawg. The first part of this series is available here] Financial institutions deal with sensitive information. If they suffer a data breach, there is a significant amount of data at the impending threat of criminal activities such as thefts and identity frauds. It is thus important to understand the impact of this...

Data Protection – Part 1: Introduction, Background & Critical Analysis

[Manal Shah is a B.A. LL.B. (Hons.) student at NUALS Kochi and runs the Securities Blawg. This series seeks to address the loopholes in the Draft Data Protection Bill formulated by the Committee under the Chairmanship of Justice (Retd) B.N. Srikrishna and to analyze the impact the proposed law would have on financial institutions. In furtherance of its objectives, the first part traces the aims...

Corporate Governance and Sustainability

Professor Vikramaditya Khanna has authored the latest edition of the NSE Quarterly Briefing titled “Global Asset Managers and the Rise of Long Term Sustainable Value”. The executive summary is as follows: – The largest global asset managers (e.g., BlackRock, State Street) have stated that long term sustainable value (LTSV) is their key goal with respect to the firms in which they invest...

Reclassification of Non-Compoundable Offences under the Companies Act, 2013: Impact on Section 203

[Radhika Parthasarathy is a 4th Year B.A. LL.B. (Business Law Honours) Student at National Law University, Jodhpur] Introduction The Committee to Review Offences under the Companies Act, 2013, was set up by the Ministry of Company Affairs in July 2018 to recommend the recategorization of acts that have been, for so long, cognizable offences under the Companies Act, 2013 [the “Act”]. The Report of...

SEBI appointed administrator to recover monies for investors: Boon or bane to the Insolvency and Bankruptcy Code, 2016?

[Bhavin Gada is a Partner at Economic Laws Practice, Advocates and Solicitors (“ELP”), and Manendra Singh is a Senior Associate at ELP. The views and opinions expressed are those of the authors and do not reflect the view of their firm nor do they constitute any legal opinion/ On October 3, 2018 the Securities and Exchange Board of India (“SEBI”) notified the SEBI (Appointment of Administrator...

Forum for Adjudicating Disputes Regarding Allotment of Shares

The issue of whether a civil court or the National Company Law Tribunal (NCLT) has jurisdiction over disputes regarding allotment of shares in a company came up for consideration before the Delhi High Court in SAS Hospitality Pvt Ltd v Surya Constructions Pvt Ltd. In its order dated 16 October 2018, the Court found that the NCLT has exclusive jurisdiction over such a dispute. The plaintiff, SAS...

Representations & Warranties Insurance in Mergers & Acquisitions

[Ajay Krishna is a 4th-year B.A. LL.B. (Hons.) Student at The National University of Advanced Legal Studies, Kochi] Mergers and acquisitions (M&A) transactions have been steadily growing in India and some of the most highly negotiated provisions in these transactions are those of indemnities in case of breach of representations and warranties. Globally there has been a rapid growth in the use...

Corporate Insolvency: Boundaries of Operational Debt: Part 2

[Job Michael Mathew is a V year student at NALSAR University of Law, Hyderabad Part 1 in the series is available here] Following from the issues set out in Part 1, I now discuss the meaning of ‘goods/services’ as used in section 5(21). While the meaning of ‘goods’ is clear and settled on account of definition in Sale of Goods Act, the meaning of ‘service’ does not enjoy the same certainty. The...

Corporate Insolvency: Boundaries of Operational Debt: Part 1

[Job Michael Mathew is V year student at NALSAR University of Law, Hyderabad] The Insolvency and Bankruptcy Code 2016 defines an “operational debt” in section 5(21) as “aclaim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government...

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