ArchiveJune 2017

Minimizing the Liability of Directors: SEBI’s Order in the Zylog Case

[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Liability of directors is a sensitive topic in India, particularly for foreign investors who propose to nominate directors to the boards of their Indian investee companies. That is why clauses are inserted in shareholders’ agreements to the effect that the investor’s nominee director will not be identified...

Consolidation of Promoter Holdings: Exemptions from Takeover Offer

The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”) provide for a series of exemptions involving consolidation of promoter shareholdings whereby acquirers of shares in such consolidation efforts need not make a mandatory takeover offer to acquire the shares of the remaining shareholders. Apart from specific promoter-oriented exemptions...

The amended Arbitration Act: The Power to Nominate and the Choice of the Nominee

The Bombay High Court in DBM Geotechnics v. Bharat Petroleum Corporation Ltd. recently decided a short but important point arising out of the recent Amendments to the Arbitration & Conciliation Act, 1996. In particular, the Court had to consider how the bar on a party’s employees serving as arbitrators had to be construed. The relevant arbitration clause between the parties...

Promoter Exits in India: Reined by the Market Watchdog?

[Guest post by Malek Shipchandler, who practices law with a firm in Mumbai. Views are personal and do not necessarily represent those of the firm.] It was reported last week that the Securities and Exchange Board of India (SEBI) is likely to relax rules pertaining to promoter reclassification in listed companies. An article co-authored by Gaurav Malhotra and I for the Oxford Business Law Blog in...

Frustration in Indian Law

On this blog, we had previously looked at the judgment of the Supreme Court of India in Energy Watchdog v. CERC and connected appeals. An earlier post had examined the decision, and had concluded that the Court “arguably misstated the law when it found that the mere existence of a force majeure clause would prevent the parties from bringing an alternative claim under section 56….” The...

Applicability of the Doctrine of Corporate Veil to Societies

[Post by Munmi Phukon and Sagar Batra of Vinod Kothari & Company] Meaning of Corporation or Body Corporate Pursuant to Section 2(11) of the Companies Act, 2013 (CA, 2013), “body corporate” or “corporation” includes a company incorporated outside India, but does not include— (i)        a co-operative society registered under any law relating to co-operative...

Intention of the Legislature Under Section 14A of the Income Tax Act, 1961

[Post by Akash Santosh Loya, 3rd year B.A. LL.B.(Hons.) student from National University of Advanced Legal Studies, Kochi.] In the case of Godrej Boyce & Manufacturing Ltd. v. Deputy Commissioner of Income Tax and Anr decided last month, the Supreme Court of India decided on the issue relating to the disallowance of expenditure under section 14A of the Income Tax Act, 1961 (the ‘Act’)...

A Closer Look at the Cross-Border Mergers Regime in India

[Post by Suprotik Das, a 5th year law student at the Jindal Global Law School, Sonepat, Haryana.] April 13, 2017 marked a momentous event in the cross-border merger regime in India with the Ministry of Corporate Affairs notifying section 234 of the Companies Act, 2013 as well as amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in the form of Rule 25A. Read...

Call for Papers: Asian Journal of Comparative Law

[Announcement posted on behalf of the Asian Journal of Comaparative Law] The Asian Journal of Comparative Law (AsJCL) is the leading forum for research and discussion of the law and legal systems of Asia. It embraces work that is theoretical, empirical, socio-legal, doctrinal or comparative that relates to one or more Asian legal systems, as well as work that compares one or more Asian legal...

Arbitration Agreement and Piercing the Corporate Veil

When a company is a party to an agreement that is subject to arbitration, can the arbitration award be passed against a significant shareholder of such company? That would generally be possible only if either the shareholder has expressly or impliedly consented to be bound by the arbitration agreement, or if the corporate veil of the company can be pierced to impose liability on the shareholder...

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