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Commitment and Settlement Clause in the Competition Act: The Right Way Ahead?

[Vijayaditya Reddy and Manjri Singh are III year students at NALSAR University of Law] The Government has announced its plan to introduce a ‘commitment and settlement’ clause in the Competition Act, 2002 to allow for a quick resolution of anti-trust cases outside the otherwise lengthy adjudication process. This amendment is likely to take place in the upcoming winter session of Parliament. This...

Front Running and Circumstantial Evidence (Matrimonial Websites Including)

Securities frauds such as insider trading and front running raise insurmountable hurdles for regulators because there is often no evidence, not even a smoking gun. Hence, regulators bear the burden of painstakingly piecing together several bits of circumstantial evidence that, as a whole, might be sufficient to convince a court or tribunal of the elements of a breach of the appropriate...

Amendments to the Portfolio Management Regulations: A Blessing for Retail Investors

[Aditya Bhayal is a 4th Year, B.A.LLB (Hons.) student at NALSAR University of Law, Hyderabad] On 20 November 2019, the Securities and Exchange Board of India (“SEBI”) introduced certain amendments to the SEBI (Portfolio Management) Regulations, 1993 (the “Regulations”). In doing so, SEBI considered the recommendations of a working group formed for suggesting changes, and comments received from...

Call for Posts: RMLNLU Arbitration Law Blog

[Announcement on behalf of the RMLNLU Arbitration Law Blog] About the Organizer Dr. Ram Manohar Lohiya National Law University is a law institute located in Lucknow, India. It is regarded as one of the premier law schools in country. Dr. RMLNLU was established in the year 2005, and since then has been providing undergraduate and post-graduate legal education. It has been ranked among the top law...

Call for Submissions: Trade, Law and Development

[Announcement on behalf of Trade, Law and Development] Founded in 2009, the philosophy of Trade, Law and Development has been to generate and sustain a constructive and democratic debate on emergent issues in international economic law and to serve as a forum for the discussion and distribution of ideas. In keeping with these ideals, the Board of Editors is pleased to announce ‘Trade in Services:...

Delhi ITAT Ruling on Liaison Office and Permanent Establishment

[Dibya Prakash Behera is a 5th Year BA. LLB (Corporate Law Hons.) student at National University of Study and Research in Law, Ranchi] In September this year, the Income Tax Appellate Tribunal, Delhi delivered a landmark judgement in Hitachi High Technologies Ltd v. The Dy. Commissioner of Income Tax. The Tribunal held that the liaison office (LO) of Hitachi High Technologies Singapore Pte Ltd...

Schemes of Arrangement: Setting a Date

[Rudra Shankar is a fifth-year BA LLB (Hons.) student at Symbiosis Law School, Pune] The procedure for mergers and demergers of companies in India is governed by sections 230 to 232 of the Companies Act, 2013. Companies are required to approach the National Company Law Tribunal (NCLT) to obtain its sanction to such schemes of arrangement before they can take effect. Section 232(6) of the Act...

SEBI’s Karvy Order: Tightening the Screws on Stock Brokers

Late on Friday, 22 November 2019, the Securities and Exchange Board of India passed an order in the case involving Karvy Stock Broking Limited (KSBL). The circumstances surrounding the order are atypical. The urgency of the situation is evident in the fact that the SEBI order, passed very late on 22 November, relies upon a “preliminary” report that it received from the National Stock Exchange of...

Can IBC be Invoked against a Financial Service Provider?

[Anirudh Agrawal is a fourth year student of Nalsar University of Law, Hyderabad] Recently, a two-member bench of the National Company Law Tribunal (NCLT) in Apeejay Trust v. Aviva Life Insurance Co. India Ltd instituted insolvency proceedings against one of the leading insurance companies of the country – Aviva Life Insurance. Given the exclusion of ‘financial service providers’ from the...

NBFCs and Other Financial Service Providers Now under IBC

[Ashwin Mathew and Bhushan Shah are with Mansukhlal Hiralal & Co, Mumbai]  Under the Insolvency and Bankruptcy Code, 2016 (IBC), the corporate insolvency resolution process contained in Part II applies to corporate debtors. A corporate debtor is defined as a “corporate person who owes a debt to any person.” Corporate person is defined to exclude financial service providers. A financial...

Disclosure of Loan Defaults by Listed Entities

Readers may recall the controversy surrounding a circular that the Securities and Exchange Board of India (SEBI) issued in August 2017 to all listed companies requiring them to make a public disclosure to the stock exchanges within one working day of defaulting on loans and other financial facilities. In a blog post then, I had discussed the rationale for SEBI’s move. However, the circular came...

SAT Rules on “Materiality” of Disclosures

A somewhat peculiar fact situation arose for consideration of the Securities Appellate Tribunal (SAT) in Electrosteels Limited v. Securities and Exchange Board of India (order dated 14 November 2019). Electrosteel Limited (ESL) embarked upon an initial public offering (IPO) in 2010. ESL’s parent is Electrosteel Castings Limited (ECL), a public listed company. Since iron ore is an essential raw...

Social Stock Exchange – A Breakthrough for the Impact Investing Sector

[Aditya Bhayal is a IV year student at NALSAR University of Law, Hyderabad] In this year’s Budget Presentation, the Finance Minister announced the introduction of the Social Stock Exchange (SSE) in the Indian capital market. Following this, the Securities and Exchange Board of India (SEBI) recently set up a panel to provide recommendations on the working and implementation of this concept. In...

Scope of Appeals against SEBI’s Disposal of Investor Complaints

The Securities and Exchange Board of India (SEBI) has established the “SEBI Complaints Redress System” (SCORES) for receiving investor complaints in respect of listed companies, collective investment schemes and other SEBI-regulated entities. The question of whether an appeal lies from SEBI’s disposal of an investor complaint through SCORES came up for consideration before the Securities...

The Foibles of a Databank and Proficiency Test for Independent Directors

There is no gainsaying that board independence has come to assume a pivotal position in corporate governance. Although it continues to receive constant criticism on account its ineffectiveness, no one musters the courage to banish it or even diminish its importance. While the concept of independent directors only gradually received the required attention and seriousness in India, it has been the...

Takeover Offer Price and the Valuation Conundrum

Generally, in a takeover or other form of transaction involving mergers and acquisitions (M&A), there could be broadly two types of disputes. The first type arises if the companies involved have failed to comply with the requisite procedures for undertaking the transaction, which ultimately adversely affects the interests of the shareholders. This would give rise to a cause for the...

Delhi High Court Rules on Disqualification of Directors

In order to address the scores of shell companies in existence, the Ministry of Corporate Affairs (MCA) introduced a range of measures in the wake of the 2017 demonetization exercise. One of them pertains to the disqualification of directors in companies that have failed to file financial statements or annual returns for a continuous period of three financial years, as prescribed under section...

Steering Committee Report on Digital Lending: Issues and Solutions

[Richa Saraf is a Legal Advisor at Vinod Kothari Consultants Pvt. Ltd.] The Department of Economic Affairs has recently released the Report of the Steering Committee on Fintech Related Issues, which discusses the various issues faced by fintech companies. This post seeks to focus on the issues pertaining to online lending, and the recommendations offer by the Steering Committee to address the...

Promoter Cannot Initiate Restructuring Scheme for Insolvent Company

In an earlier post, I had noted the revival of the scheme of arrangement as a restructuring tool for companies that have been taken into liquidation under the Insolvency and Bankruptcy Code, 2016 (IBC). In the cases discussed therein, the adjudicatory authorities sought to encourage the parties to use the scheme to attempt a revival of the company before certifying its demise. Among the leading...

Qualifying test requirements for Independent Directors – a hasty, slipshod & cumbersome requirement

I have written a piece for Moneylife on the new requirements of the Ministry of Corporate Affairs for independent directors that mandate existing as well as first-time independent directors to enrol in a databank as also pass certain qualifying test. The Rules, that are spread over several notifications and also an FAQ, come into force from 1st December 2019 and some transition period is also...

Mandatory Consultation as a Recourse to Settle the Tussle between TRAI and the CCI

[Rohan Bhargava and Nishtha Khandelwal are 3rd year students at Dr. Ram Manohar Lohiya National Law University] With the advancement in the technology and the advent of multiple private players in the telecommunication sector, there arose a requirement for a sectoral regulatory body to deal with various issues arising in the market. In India, the telecom sector is governed by the Telecom...

Roadblocks to CCI’s Green Channel

[Jubair Bhati is a corporate lawyer and Mayank Sen a 5th year B.B.A., LL.B. (Hons.) student at School of Law, Raffles University, Neemrana (Rajasthan)] The Competition Commission of India (“CCI”) has recently notified amendments to its ‘Procedure in regard to the transaction of business relating to combinations Regulations, 2011’ (the “Combination Regulations”). The amendments to the Combination...

Section 16 of the Arbitration & Conciliation Act, 1996 – A Model Law Approach in India?

[Rahul Saraswat is a 5th year student at Gujarat National Law University, Gandhinagar and Aditi Nandanwar a 5th year at Hidayatullah National Law University, Raipur] One of the fundamental principles of arbitration is “Kompetenze-Kompetenze”, which empowers the arbitral tribunal to rule upon its jurisdiction and other related issues. Section 16 of the Arbitration and Conciliation Act...

Understanding the Scope of Section 238: Overriding Nature of the IBC

[Akhil Kumar is a fifth year BA LLB (Hons.) student and Abhinav Mathur a  fourth year BA LLB (Hons.) student, both at NUALS, Kochi] The Insolvency and Bankruptcy Code, 2016 was enacted with the view of bringing a complete code of reorganisation and insolvency resolution of corporate debtors in a time bound manner. The Code being at a nascent stage, has seen emerging disputes regarding its...

Call for Papers: NLIU Forum for Research in Arbitration Law

[Announcement on behalf of the NLIU Forum for Research in Arbitration Law] The NLIU Forum for Research in Arbitration Law (NFRAL) now invites submissions for publication on its platform www.nfral.in. About NLIU The National Law Institute University, Bhopal (NLIU) is a leading law school in India, which was established in 1997 by an enactment of the State Legislature of Madhya Pradesh. About NFRAL...

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