[Sahithi Uppalapati is a III Year, B.A.LLB (Hons.) student at NALSAR University of Law, Hyderabad] The recent decisions of various benches of the National Company Law Tribunal conflict on the issue of whether a sole proprietorship concern is covered under the term ‘person’ under section 3(23) of the Insolvency and Bankruptcy Code, 2016, which is determinative of who is entitled to initiate a...
Shareholder Ratification for Directors’ Breach of Duty
[Rajat Maloo is a III year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore] Common law provides that those to whom duties are owed may release those who owe the duties from their legal obligations. In the corporate law context, this principle has been applied by courts in cases where shareholders ratified directors’ breaches of duties. However, various...
‘Apply and Explain’ – An Alternative Model of Corporate Governance
[Manasvin Andra is a III year student at NALSAR University of Law, Hyderabad] Corporate governance has emerged as one of India Inc.’s primary concerns since the time the Satyam scandal came to light. The incident – dubbed “India’s Enron” – has had a seismic effect on how businesses are regulated, and its effects have been felt most prominently in terms of how corporate governance norms are...
Insolvency of Financial Service Providers and Third Party Rights Under Securitisation Contracts
[Richa Saraf is an Advocate] The Insolvency and Bankruptcy Code, 2016 (“Code”) does not, in general, deal with insolvency of financial service providers (“FSPs”), as FSPs are seen to be systemic and complex structures engaging in unique transactions. However, the collapse of Dewan Housing Finance Corporation Limited (“DHFL”) led to the notification of the Insolvency and Bankruptcy (Insolvency and...
SEBI Introduces Greater Transparency in the AIF Space
[Vaneesa Agrawal is the founder and Rishi Ahuja an associate at Thinking Legal] The Securities and Exchange Board of India (“SEBI”) has, through a Circular dated February 5, 2020 (“Circular”), issued disclosure standards for the growing Alternative Investment Funds (“AIFs”) space. The Circular was preceded by a Consultation Paper dated December 4, 2019. SEBI has introduced performance...
SEBI’s Stewardship Code for Institutional Investors
[Pammy Jaiswal is a Partner at Vinod Kothari and Company] The activism of institutional investors was experienced for the very first time in Life Insurance Corporation v. Escorts Ltd., 1986 AIR 1370. While the Bombay High Court initially held that the role of the Life Insurance Corporation (LIC) is unconstitutional and mala fide, the Supreme Court allowed the LIC’s appeal and specifically stated...
Delhi High Court Allows E-commerce Platforms to Sell Products of Direct Selling Entities
[Kajal Kashyap is a 4th year B.A. LL.B. (Hons) student at NALSAR University of Law] In Amazon Sellers Services Pvt. Ltd. v. Amway India Enterprises Pvt. Ltd., a division bench of the Delhi High Court overruled an earlier judgment passed in 2019 by a single judge of the same court, thereby allowing e-commerce platforms like Amazon and Flipkart to sell products of Amway and other direct selling...
India’s Approach to Liability of Hotels for Loss of Guest Property
[Pareekshit Bishnoi is an advocate based in Delhi] What are the legal consequences when a person visits a hotel and gives their car for valet parking, which is later reported as lost or damaged? In such cases of loss or damage from infra hospitium (meaning “within the hotel”), a question often arises as to the nature of liability of such hotel-owner or innkeeper. To determine the nature of...
The Expanding Scope of Commercial Wisdom in the IBC: Numbing all Checks and Balances?
[Kartikey Sanjeev Bhalotia and Arshit Kapoor are 2nd year students at the National Law University Odisha] While overruling a decision of the National Company Law Appellate Tribunal (NCLAT), the Supreme Court in Maharashtra Seamless Limited v. Padmanabhan Venkatesh (decided on 22 January 2020) accepted the decision of the committee of creditors (CoC) approving the appellant’s resolution plan which...
Retrospective Termination of Sole Arbitrator: A Move Uncalled For?
[Prince Todi is a III year B.A. LL.B. (Hons.) student at Hidayatullah National Law University, Raipur, Chattisgarh] On 20 January 2020, the Delhi High Court in Prodattur Cable TV Digi Services v. Siti Cable Network Limited held that the unilateral appointment of a sole arbitrator by an authority interested in the outcome of the dispute is impermissible. While the same principle has been laid down...
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