[Roshan Cyriac is a 4th-year B.A., LL.B. (Hons.) student at NALSAR University of Law, Hyderabad] Foreign investors can invest in India directly through foreign direct investment (FDI) or through an entity owned and controlled by it (FOCC). An FOCC is a company incorporated in India but owned and controlled by a (non-resident) foreign company. When a non-resident transfers shares in Indian...
Arbitration Realities: Patterns of Challenges and Judicial Responses
[Madhav Goel, Karan Gulati, Sonam Patel, and Anjali Sharma are researchers at the TrustBridge Rule of Law Foundation] Arbitration has become a widely used mechanism to resolve contractual disputes in India. It offers greater flexibility and better alignment with parties’ incentives than courts. Since the parties voluntarily choose arbitration, they are generally expected to accept the outcomes...
Indian Shareholder Activism: Approaching a Turning Point?
[Karan Anand and Bhaskar Vishwajeet are students at Jindal Global Law School] The unsuccessful merger between Zee Entertainment Enterprises Limited (“ZEEL”) and Culver Max Entertainment Private Limited (“SPNI”) has reignited the debate on the status of shareholder activism in incomplete mergers in India. In the wake of the termination of the merger, some of SPNI’s institutional shareholders...
SEBI’s Right of Recovery: Limited to One’s Lifetime or Beyond?
[Urvashi Misra is a Counsel and Arnab Ray an Associate at AZB & Partners, New Delhi] Actio personalis moritur cum persona, i.e., personal actions die with the death of a person is a well-established legal principle, which is widely accepted by judicial and regulatory authorities, including the Securities and Exchange Board of India (“SEBI”). While SEBI has been implementing this principle in...
Demystifying Financial Debt: A Deep Dive into a Supreme Court Ruling
[Tanisha Gautam is a 4th year B.A., LL.B. (Hons.) student at the Institute of Law, Nirma University, Ahmedabad] The Insolvency and Bankruptcy Code, 2016 (IBC) established the boundaries between ‘financial debt’ and ‘operational debt’, which has been further clarified and expounded upon by the judiciary over time. The landmark judgment by the Supreme Court in Global Credit Capital Limited v. Sach...
Crowdsourcing Capital Faces Stiff Penal Actions
[Pammy Jaiswal is a Partner at Vinod Kothari and Company] Several well-known digital platforms have been showcasing the immense potential to raise funds for start-ups from private equity investors, reaching very often to retail investors too. However, one needs to note the provisions of section 42 (7) of the Companies Act, 2013 (‘CA 2013’), and several recent penalty orders which, with detailed...
Advancing the Objectives of IBC: Why Arbitration Should Persist During Moratorium Periods
[Arunoday Rai is a 3rd-year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore] There has been sufficient literature arguing for reconciliation between insolvency and arbitration proceedings. This post argues for the continuation of arbitration proceedings as it furthers the objectives of insolvency and enhances its efficiency. It critiques the position taken by...
SEBI’s Proposed Price Discovery Framework: Balancing Market Protection
[Avinash Kotval and Aviral Bhardwaj are final and penultimate year BBA LL.B. (Hons.) students, respectively, at Jindal Global Law School, Sonipat] On April 19, 2024, the Securities and Exchanges Board of India (‘SEBI’) released a consultation paper on ‘Framework for Price Discovery of Shares of listed Investment Companies & listed Investment Holding Companies’. This consultation paper intends...
Deciphering the Incorporation of Arbitral Clauses and Contractual Intent
[Ria Bansal is a 3rd year B.A., LL.B. (Hons.) student at Rajiv Gandhi National University of Law, Punjab] Recently, the Supreme Court of India in NBCC (India) Ltd. vs. Zillion Infraprojects (P) Ltd. set aside the appointment of a sole arbitrator under section 11(6) of the Arbitration and Conciliation Act, 1996 (“the Act”) on the basis that the arbitration clause had not been incorporated within...
Navigating RBI’s Payment Aggregator Directives: A Merchant Perspective
[Pratishtha Shrivastava is a 3rd Year B.A.,LL.B student at Institute of Law, Nirma University] In a recent development, the Reserve Bank of India (RBI) proposed draft directions for the regulation of payment aggregators (PAs), specifically those handling physical point-of-sale (PoS) services. A PA is a third-party service provider that lets consumers pay retailers. Some significant PAs in India...
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