ArchiveSeptember 2009

Incorporation of an Arbitration Clause by Reference

One of the most controversial and interesting questions in contemporary arbitration law is incorporation by reference. It is a common practice in some industries, particularly shipping and construction, for the contractual relationship between the parties to be composed of several documents. It sometimes happens that a dispute arises with reference to one of these documents, while the arbitration...

Towards evolving Global Corporate Governance Standards

In a recent article, Mr. Umakanth drew a distinction between ‘insider’ and ‘outsider’ models of corporate governance, and argued that “…the current regime on corporate governance has been transplanted from jurisdictions which display diffused shareholding and hence is inappropriate to the Indian regime which is dominated by promoter-controlled companies. What is necessary is a...

TDS and Non-Residents

While the Vodafone decision has been discussed earlier, one aspect which has not been looked at is the application of TDS provisions in the case. In the facts of the case, Hutch had received consideration from Vodafone for the alleged transfer of a capital asset situated in India. The primary liability to pay tax would be that of Hutch (the payee). According to the Revenue, the liability of...

Capital Gains and the Cost of Acquisition

A recent post examined the decision of the Bombay High Court in Techno Shares which adopted a new stance on the law of depreciation. Soon after this decision, the Mumbai Bench of the Income Tax Appellate Tribunal seems to have marked another point of departure in relation to the taxation of capital assets, this time on the issue of capital gains tax. The issue before the Tribunal in Bomi S...

FDI from Cayman Islands: Recent Changes

In an article titled “Investing in India: How Recent Developments in the Cayman Islands Facilitate Inbound Investment”, Chetan Nagendra examines two recent events: Cayman Islands’ acceptance as a full member of IOSCO and its recognition in the ‘white list’ of jurisdictions that have substantially implemented the OECD tax standard. He notes that these events are likely to see a further flow of...

True and Fair Accounting

Recent events like Satyam and the economic recession have thrown up several issues about appropriate accounting and auditing practices, discussed here and here. In this context, it is interesting to note a decision of the United Kingdom Queen’s Bench in Macquarie Internationale Investments Ltd. v. Glencore UK Ltd., [2009] EWHC 2267 (Comm). Macquarie Internationale Investments had acquired an...

SEBI decides to amend Listing Agreement, Takeover Regulations, etc.

SEBI has issued a press release stating the decisions taken at the Board meeting held today and certain aspects have been highlighted. The decisions relate to amendments of the Listing Agreement and the new ICDR 2009, the Takeover Regulations and certain other amendments.The press release is fairly self explanatory and in any case one may wait for the actual amendments to consider their...

Contestability of Corporate Control

In a column in the Business Standard, Nitin Desai argues that the current ecosystem in India provides greater benefits to corporate control, resulting in a number of large Indian companies being managed by the promoter-owners. Corporate control may be susceptible to challenge if there is a market for control facilitated by a liberal takeover regime. However, as we have seen (here and here), the...

Inputs and Suggestions to TRAC

The Takeover Regulations Advisory Committee (discussed earlier) has invited inputs and suggestions regarding suitable amendments to the SEBI Takeover Regulations. This is part of the committee’s consultative process. Suggestions are due in the prescribed format by October 31, 2009.The background for the proposed amendments is as follows:There have … been various prominent judgments by Hon’ble...

The Legal Aspects of Dual Listings

There has recently been a fair amount of discussion regarding the ability of companies to carry out dual listings in India. This arises in the context of dual listing as a possible structure being considered in the Bharti-MTN transaction.Generally, dual listings occur when two or more companies (that otherwise intend to merge) continue as separate entities with separate sets of shareholders, but...

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