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Unpacking NCLT Kolkata’s Reversal on Capital Reduction in the Philips India Case

[Shalin Ghosh is a 3rd year B.A., LL.B. (Hons.) student at Maharashtra National Law University, Mumbai] Capital reduction is a common mode of financial restructuring for a company. It is a useful tool for companies to reduce accumulated losses and achieve an optimal capital structure. Organizationally, it is a popular route to provide an exit to minority or dissenting shareholders from a company...

Timeline of filing Application under Section 29A for Extension of Time

[Megha Shaw is an advocate practising in the Supreme Court of India and Sachdev Sharma is a law graduate of NUJS, Kolkata] In Rohan Builders (India) Private Limited v. Berger Paints India Limited (12 September 2024), a division bench of the Supreme Court of India decided on whether an application for extension of time under section 29A of the Arbitration and Conciliation Act, 1996 (the “A & C...

NCLT’s Shift: A Deeper Dive into Merger Schemes and Public Interest

[Arjim Jain and Shruti Asati are 4th Year B.A., LL.B. (Hons.) students at National Law University, Odisha] In a ruling in July, the National Company Law Tribunal (‘NCLT/Tribunal’) rejected a proposed merger scheme involving three interconnected entities, citing concerns that the scheme was not in the public interest. Unlike other cases where the NCLT typically focused on ensuring compliance with...

Are OLA Drivers Employees or Contractors? Karnataka High Court Weighs In

[Aparna Ravi  is a Partner and Manan Sheth an Associate at S&R Associates] In its judgement dated September 30, 2024 in Ms. X v. Internal Complaints Committee, ANI Technologies Private Limited (Writ Petition No. 8127 of 2019), the Karnataka High Court  held that the relationship between ANI Technologies Private Limited (“OLA”) and its driver subscribers was an employer-employee relationship...

Identifying the Real SBO: A critique of the LinkedIn and Samsung Orders

[Chirag Motwani and Ananya Badaya are 4th year law students at Hidayatullah National Law University, Raipur] A “significant beneficial owner” (“SBO”) is an individual who directly or indirectly controls a company or substantially holds beneficial interest in the company and whose name is not registered as a holder of shares in the books of the company. Section 90 of the Companies Act, 2013...

Protection against Self-incrimination and Section 217 of the Companies Act, 2013: Navigating Constitutional Waters

[Shriya Chakravarthy and Mrigank Pathak are alumni of Gujarat National Law University, Gandhinagar, and have previously served as Law Clerks at the Supreme Court of India. They are presently practising at the High Court of Karnataka and the Supreme Court of India respectively] Under the Companies Act, 2013 (“the Act”), the procedures for inspection, inquiry, and investigation have been laid down...

Can an Exclusive Jurisdiction Clause Designate Seat?

[Shaneen Parikh is the Partner and Head of International Arbitration at Cyril Amarchand Mangaldas. Amoga Krishnan is a Senior Associate at Cyril Amarchand Mangaldas] Can an exclusive jurisdiction clause be treated as one which also determines the seat of arbitration? In May 2024, the Delhi High Court (“DHC”) in Kings Chariot v. Tarun Wadhwa ruled in the negative. This post is a comment on the...

Reining in Overreach: Why BPSPs Should Not Be Classified as Payment Systems

[Ritvij Ratn Tiwari is a 5th-year B.A., LL.B. (Hons.) student at the National Law School of India University, Bengaluru] In February 2024, the Reserve Bank of India (‘RBI’) moved decisively to curtail the operations of certain fintech companies, particularly Business Payment Service Providers (‘BPSPs’), by labelling their activities as unauthorized “payment systems” under the Payment...

Clarifying “Unconditional” Withdrawals: When Does Interest on Awarded Amounts Truly Stop?

[Ashish Dholakia is a Senior Advocate at the Delhi High Court, Rohan Chawla is an Advocate at the Delhi High Court, and Ria Bansal is a 4th-year B.A., LL.B. (Hons.) student at Rajiv Gandhi National University of Law] The 2015 amendments to the Arbitration & Conciliation Act, 1996 (‘A&C Act’) dramatically changed the arbitration regime in India. A challenge to an award under section...

RBI’s Revised Master Directions on Peer-to-Peer Lending: Shift in Regulatory Policy

[Sourav Paul is a final year student at the West Bengal National University of Juridical Sciences, Kolkata] In recent years, the fintech industry in India has witnessed significant growth, particularly within the digital lending sector. A prominent example is the peer-to-peer (‘P2P’) lending model, which has expanded rapidly in India, supported by a favourable regulatory environment. P2P lending...

Navigating Legal Conundrums: The Interplay Between India’s Netting Act and the Insolvency Code

[Aditya Chhangani is a practising advocate at the Rajasthan High Court] The Bilateral Netting of Qualified Financial Contracts Act, 2020 (“Netting Act”) came into force with the goal of fostering stability and competitiveness in the Indian financial sector. In simple terms, netting means setting off any obligations or claims arising out of a Qualified Financial Contract (“QFC”). A single net...

Co-Extensive Liabilities and Subrogation Rights in Corporate Insolvency: The Supreme Court’s Stance

[Parth Birla is a fourth-year student at Hidayatullah National Law University, Raipur] Recently, the Supreme Court, in BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd., had the opportunity to interpret the overlapping mechanisms of the concept of Guarantee in the Corporate Insolvency Resolution Process. This case delves into the intricacies of the Insolvency and Bankruptcy Code...

Export-Import Regulations Do Not Ease Doing Business

[Jayesh H practises at the Trifecta of Law, Finance & Governance, and thanks Muskaan Shah for assisting with this post] The recent draft of the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2024, issued by the Reserve Bank of India, has been projected as an initiative to streamline the export and import processes. Its primary objective is to enhance the...

Flawed Foundations: Challenging the Right of Ineligible Arbitrators to Nominate

[Abhishek Gupta is a fourth year B.A., LL.B. (Hons.) student at National Law University, Delhi] In arbitration, the interplay between party autonomy and procedural fairness often presents complex legal challenges. A key issue arises when considering whether an ineligible arbitrator should have the authority to nominate an arbitrator. This question places party autonomy, a fundamental principle of...

SEBI’s Move to Institutionalise Front Running in Mutual Funds

[Aryan Rawat is a 4th year B.A. LL.B. (Hons) student at National Law University, Odisha] On 5 August 2024, the  Securities and Exchange Board of India (‘SEBI’) issued a circular to all asset management companies (‘AMCs’) and mutual funds (MFs), calling upon them to establish institutional mechanisms to curb front running and fraudulent securities transactions. This circular was issued at a time...

SEBI’s Finfluencer Legal Framework: Gaps in Enforcement and Investor Education

[Malini Mukherjee is a 5th year BBA LLB (Hons.) Student at Jindal Global Law School] On 27 June 2024, the Securities and Exchange Bureau of India (“SEBI”) convened its board meeting, where it approved norms to regulate financial influencers or ‘finfluencers’ (“the norms”). SEBI has defined finfluencers as individuals who provide advice on various financial topics and can influence the financial...

SEBI’s New Asset Class: Remodelling Mutual Funds into Hedge Fund Lites

[Parv Pancholi is a final year B.B.A. LL.B. (Hons.) student at National Law University Odisha, Cuttack] The Indian investment market continues to be an attractive hotspot for the domestic and foreign investors, offering a diverse range of financial products like mutual funds (“MFs”), alternative investment funds (“AIFs”), and portfolio management services (“PMSs”.) In recent years, a growing...

Aggressive for Passive: A Deep Dive into SEBI’s New MF Lite Regulations

[Yash Vardhan and Yuman Islam are 5th year students at Gujarat National Law University, Gandhinagar] The Securities and Exchange Board of India (“SEBI”) recently released a consultation paper introducing new regulations for passively managed mutual funds. The proposed regulations are called the “MF Lite Regulations.” This proposal aims to establish a more flexible regulatory framework for passive...

From Slabs to Simplicity: SEBI’s Regulatory Shift in Indian Brokerage

[Kevin Davis is a final year student at the West Bengal National University of Juridical Sciences] On 1 July 2024, the Securities and Exchange Board of India (SEBI) issued a circular, appropriately titled “True to Label”, which will alter the revenue structure and potentially dampen the rise of zero brokerage intermediaries in India. In brief, the impact of this circular is two-fold: first, it...

SEBI Broadens the Scope of Liquid Assets

[Shloka Mathur is a 4th year B.B.A LL.B. (Hons) student at National Law University, Odisha.] In its recent regulatory directive, the Securities and Exchange Board of India (‘SEBI’) has altered and expanded the scope of ‘liquid assets’ in its definition. These assets provide financial institutions with the necessary liquidity to manage risks effectively and ensure market stability. Liquid assets...

Instruments Issued to Non-Employees: Whether Securities Under SCRA

[Aayushi Choudhary is a 5th year student of Gujarat National Law University, Gandhinagar] In recent years, companies have increasingly sought innovative ways to incentivize and retain not only their employees but also non-employee stakeholders such as consultants, contractors, and business partners. This trend has given rise to complex financial instruments that blur the lines between traditional...

Striking a Balance: SEBI’s Fixed Price Method in Voluntary Delisting

[Ayush Gorana is a final-year B.B.A., LLB (Hons.) Student at Gujarat National Law University, Gandhinagar] In a significant regulatory development, SEBI in its board meeting on 27 June 2024 approved amendments to the SEBI (Delisting of Equity Shares) Regulations, 2021, thereby introducing the fixed price method as an alternative to the existing reverse book building (RBB) process for voluntary...

Managerial Remuneration – Should Promoters Be Disenfranchised?

[Bharat Vasani is Senior Advisor – Corporate Laws and Miloni Mau an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] The Government of India’s socialistic approach towards controlling managerial remuneration between 1960s and 1990s has been a painful chapter in...

SEBI’s New Framework for Subordinate Units in InvITs

[Naman Kasliwal is a final year law student at Gujarat National Law University] The Government has estimated an investment requirement of around $1.4 trillion by 2025 in India’s infrastructure sector. To bridge this gap and fund this crucial sector, innovative financing mechanisms are essential. Infrastructure investment trusts (“InvITs”), introduced by the Securities and Exchange Board of India...

Value Chain Reporting in the BRSR: A Critique

[S Vishnu Ameya is a B.A., LL. B (Hons.) graduate from Damodaram Sanjivayya National Law University, Visakhapatnam] In recent years, disclosure of the environmental, social and governance (ESG) practices of a company have gained significant attention from investors, regulators, and stakeholders worldwide in building reputation, trust and managing risks. However, the question arose, whether such...

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