ArchiveAugust 2012

Prepayment fees in loan transactions

It is common practice for loan agreements to provide for a fee/ premium where a loan is repaid earlier than its contractual due date. The said fee is designed to compensate the lender/s for the loss of anticipated income from the transaction and is usually expressed as a percentage of the principal amount prepaid. While the loan agreement sets out the circumstances in which the prepayment fee...

NUJS Law Review: Call for Papers

[The following announcement is being posted on behalf of NUJS Law Review] The Copyright Amendment Act, 2012 recently passed by both houses of parliament promises to thoroughly revise the laws currently governing the Indian Copyright regime. This legislative moment provides an appropriate opportunity for academic reflection on the proposed changes, their probable impact and a holistic appraisal of...

A Review and Analysis of the CDR Mechanism

The out-of-court approach for corporate debt restructuring (CDR) was instituted by the Reserve Bank of India (RBI) over a decade ago. While it has been successful in several cases, there have also been significant shortcomings with the CDR mechanism. In a recent speech, a Deputy Governor of the RBI undertakes a review of the CDR mechanism. A number of issues are examined in the speech, including...

High-Frequency Trading and Short Termism

The Economist has a piece that advocates a cautious approach towards high-frequency trading. It argues: This newspaper seldom finds itself on the side of restraining either technology or markets. But in this case there is a doubt whether the returns justify the risk. Society needs a stockmarket to allocate capital efficiently, rewarding the best companies with higher share prices. But high...

IPO Lock-in on ESOP Shares

SEBI recently issued an informal guidance to clarify that in the case of an IPO only shares held by employees of the company or other qualifying group entities (such as a holding company) are entitled to exemption from the one-year lock-in period on pre-existing share capital. Specifically, employees who are no longer in employment of the company at the time of the IPO would be subject to the one...

The interpretation of time limit clauses in contracts

A claimant approaches a court one day after the limitation* period expires, in the mistaken impression that the limitation period had in fact not expired. This limitation period is set by a clause in a contract that is by no means a model of certainty or clarity. The question is whether the suit is time-barred. In ENER-G Holdings plc v Hormell, the Court of Appeal (Longmore, LJ dissenting) held...

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