ArchiveJuly 2010

Delhi High Court clarifies Transfer Pricing law

In a fillip to the increasing global ambitions of Indian industries, the Delhi High Court, in Maruti-Suzuki India Ltd. v. ACIT, clarified the application of transfer pricing provisions to the use of foreign trademarks in India. The issue arose out of the Maruti-Suzuki collaboration all of us are well aware of, and was a good example of judicial intervention to stifle the parochial approach of the...

“Subject to” Contracts and Agreements “Not Completed”

“The moral of the story is to agree first and start work later.” So observed Lord Clarke recently, in delivering the unanimous judgment of the United Kingdom Supreme Court in RTS Flexible Systems [“RTS”] v. Molkerei Alois Muller Gmbh [“Muller”]. The judgment considers several questions of law that are of significance to long-term commercial contracts, particularly when there is doubt as to...

Legal character of an overdraft facility

Earlier this month, a division bench of the Bombay High Court considered an important question regarding the legal character of an overdraft facility offered to a customer. The issue before the Court in Sargam Foods v. State of Maharashtra, was whether the cash credit facility offered by a bank can be attached in recovery proceedings against one of its customers. The relevant provision was Rule...

The United States Supreme Court on the ‘Principal Place of Business’

Two earlier posts had discussed the issue and the oral arguments before the United States Supreme Court in Hertz Corp. v. Friend. Earlier this year, the Court delivered a unanimous verdict, holding that the ‘principal place of business’ of a corporation is its ‘nerve centre’, i.e. the headquarters of the corporation. As discussed earlier, the issue came before the Court as part of a class action...

Interpretive Guidance in Rule-Making

While reading the Supreme Court’s judgment in the Daiichi case, which Mihir has discussed here, I was particularly struck by certain observations of the court that appear at the end of the judgment. The case involved an intensive reading and close interpretation of the provisions of the SEBI Takeover Regulations. Here are the relevant observations: 57. Before parting with the records of the case...

Report/revision of Takeover Regulations

The Report of the Takeover Regulations Advisory Committee (TRAC) is, as is widely reported, released. SEBI’s Press Release summarizes the important recommendations. Here’s my short piece on the subject in today’s Mint. Here are Sandeep Parekh’s views on his blog. Would write soon here particularly on issues such as the hike in threshold limit, increase in size of the...

Regulating Bankers’ Pay

Consistent with international trends to impose greater regulation on executive compensation in banks, the Reserve Bank of India (RBI) has issued draft guidelines on compensation of whole time directors/ chief executive officers / risk takers and control function staff. This applies to private sector and local area banks and all foreign banks operating in India, and is in addition to tight...

Physical Settlement in Derivatives Trading

Over a decade ago, when trading in derivatives was commenced on Indian stock exchanges, it was decided that such instruments must be introduced in a phased manner. This was following the recommendations in the L.C. Gupta Committee report. Consequently, various types of derivatives were introduced at different points in time – index futures, futures in specific securities, options and so on...

NALSAR Student Law Review: New Issue

The latest issue of the NALSAR Student Law Review (which is available online) carries a number of articles that may be relevant to readers of this Blog. Here is a list of those: – Regulation and Responsibility of Credit Rating Agencies vis-a-vis the Current Economic Crisis- A Comparative Analysis – Rethinking the Linkages Between Foreign Direct Investment and Development: A Third...

Guidance on Due Diligence

M&A Law Prof Blog has a link to JeffreyWeiner’s Due Diligence in M&A Transactions: A Conceptual Framework which provides an overview of the due diligence process and its objectives in an M&A transaction. It will be a particularly useful reading for corporate lawyers who are starting out this season.

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