[Milind Gaur is a 5th Year BBA LLB student of Symbiosis Law School, Pune.] Introduction With the dawn of the Insolvency and Bankruptcy Code, 2016 (the Code), a crucial and much needed framework was set in place for tackling the insolvency and bankruptcy regime in India. At the same time, the Code has elicited clarifications and interpretation across various provisions. One such question which...
The Legality of Smart Contracts in India
[Rishi A is legal analyst at spotdraft.com] Introduction Earlier this year, the State Bank of India (‘SBI’) launched BankChain, a blockchain platform formed by a consortium of 27 banks, which was proposed to be used to share e-KYC information about customers within the consortium. This would help with the transmission of information directly to the banks without any leakages or delays. Last week...
Applicability of the Limitation Act to Insolvency Proceedings: A Critical Analysis
[Madhumitha Srinivasan is an Associate at Advaya Legal and practising in the Bombay High Court. The views expressed are personal. An earlier post on the topic is available here] In a decision passed by the National Company Law Appellate Tribunal (NCLAT) in Black Pearl Hotels Pvt. Ltd. vs. Planet M Retail Ltd. (judgment dated 17 October 2017), it has been observed that the right to apply under the...
Does Section 11B of the SEBI Act Envisage ‘Non-Compliance’ of Directions? – Part I
[Rahul Sibal is a 4th Year student and Deep Shah a 3rd Year student of NALSAR Hyderabad] Background In March this year, the Securities and Exchange Board of India (‘SEBI’) confirmed an interesting interim order that was passed last year. The interim order (the ‘Order’) impounded profits that Beejay Investments derived from trading in securities, with such profits being termed as ‘unlawful gains’...
Anti-Dilution and Rights Issue: On the Right Side of the Law?
[Job Michael Mathew is a 4th year BA.LL.B (Hons) student at NALSAR University of Law. He may be reached at [email protected]] This post examines whether the instrument of rights issue can be used by unlisted companies in enforcing anti-dilution provisions which may be one of terms in a shareholders’ agreement with a foreign investor. Put simply, anti-dilution means compensating the investor...
Supreme Court Declines to Make Composite Reference to Arbitration from Interrelated Multiple Agreements
[Ritvik M. Kulkarni is an associate with Wadia Ghandy & Co., Mumbai. Views are strictly personal] In its order last month in Duro Fulgeura v. Gangavaram Port Ltd., the Supreme Court of India refused to make a composite reference and to appoint a single arbitral tribunal for disputes arising out of multiple agreements between the same parties (the “Order”). Factual Background A tender was...
The Status of MLM Companies in India
[Shubhi Goyal is a 4th Year Student at NALSAR University of Law, Hyderabad] Multi-level Marketing Companies (“MLM Companies”) sell their products and services directly to consumers, instead of following the traditional distribution channel of Manufacturer – Distributor – Wholesaler – Retailer – Consumer. They rely for their business on a non-salaried workforce, which sells products to...
Proxy Holders and Corporate Representatives: The Obligation to Vote According to Instructions
[Job Michael Mathew is a 4th year BA.LL.B (Hons) student at NALSAR University of Law. He may be reached at [email protected]] This post examines the question whether proxyholders appointed under section 105 of Companies Act, 2013 (the “Act”) and corporate representatives appointed under section 113 are required to vote according to the specific instructions given to them by their appointers...
The Ambiguous Treatment of Non-Compete Covenants in Joint Venture Agreements
[Anubhuti Maithani is a 2nd year B.A. LL.B. (Hons.) student at NALSAR University of Law in Hyderabad, India] A non-compete clause (NCC) is a restrictive covenant, frequently found in combination agreements like mergers and acquisitions (M&A) and joint venture agreements, that prohibits one party from competing with the other on terms stipulated therein. In other words, it restricts one party...
Undue Emphasis on Certificate from a Financial Institution under Insolvency Law
[Aayush Mitruka is a lawyer based in Delhi] The working of the Insolvency and Bankruptcy Code, 2016 (Code) has given rise to several challenges which need to be adequately addressed. The Code enables an operational creditor to initiate a corporate insolvency resolution process (CIRP) under section 9 provided it has complied with the requirement of sending a demand notice to the corporate debtor...
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