[This post was first published in the Oxford Business Law Blog] In a closely watched litigation in the climate change space, ClientEarth, a non-profit environmental law organisation based in the United Kingdom, instituted a shareholder derivative suit against the directors of Shell plc. The claim is based on the allegation that the directors breached their duties under the Companies Act 2006 by...
“Private Placement”: Syntactic Interpretation of a Financing Engagement Letter
Recently, the England and Wales High Court (Commercial Court) had the occasion in Cantor Fitzgerald & Co. v. Yes Bank Limited [2023] EWHC 745 (Comm) (31 March 2023) to consider contractual language in capital market transactions. While the contract itself was governed by English law, the ruling has implications on contractual interpretation more generally, in addition to its relevance to...
SEBI’s Proposals to Enhance Corporate Governance by Empowering Shareholders
Over the last decade and, in particular, following the enactment of the Companies Act, 2013, the Securities and Exchange Board of India (SEBI) has been gradually and consistently strengthening the governance norms pertaining to listed companies. Among other measures, SEBI has sought to focus on two specific matters, viz., (i) enhancing transparency in corporate matters; and (ii) empowering...
Bombay High Court Reiterates Distinction Between Forward Contracts and Options in Securities
The distinction between a forward contract for sale and purchase of securities in a company on the one hand and the creation of an option in relation to such securities on the other hand bears considerable relevance when it comes to their enforceability. While the Securities Contracts (Regulations) Act, 1956 (SCRA) and various notifications issued therein by the Central Government as well as the...
Liability of Company Secretary for Misstatements: SC Remits Case to SAT
In November 2022, we had discussed a somewhat curious ruling of the Securities Appellate Tribunal (SAT) in V. Shankar v. Securities and Exchange Board of India which exonerated the Company Secretary of Deccan Chronicle Holdings Limited (DHCL) from liability for certain misstatements and incorrect disclosures made by the company. We had noted that the SAT largely arrived at the ruling on first...
The Regulatory Progression of ESG in India
The concept of corporate social responsibility (CSR) has had a pivotal status in the debates surrounding corporate law and governance at the turn of the century. Although CSR was ensconced in the idea of voluntarism by which companies and their boards are invited to pay attention to the interests of various constituencies affected by a company’s activities, in some jurisdictions such as India it...
IFSCA Report on the Design of Variable Capital Companies
The choice of business form available in any jurisdiction is critical to the establishment of a vibrant fund industry. While several markets have historically relied on organisational structures such as the limited partnership, the age-old private trust formulation has constituted the mainstay of the fund industry in India. Most fund structures (including mutual funds and alternative investment...
SEBI Proposals to Revamp the Continuing Disclosure Regime
A robust continuing disclosure regime is a sine qua non for maintaining efficient capital markets. Over the years, the Securities and Exchange Board of India (SEBI) has developed and enhanced a continuing disclosure regime for Indian listed companies, which is now encapsulated in regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the ‘LODR Regulations’)...
SAT on the Non-Liability of a Company Secretary for Incorrect Disclosures
On 1 November 2022, the Securities Appellate Tribunal (SAT) in V. Shankar v. Securities and Exchange Board of India exonerated the company secretary of Deccan Chronicle Holdings Limited (DCHL) from liability for certain misstatements and incorrect disclosures made by the company. Background and Decision The Securities and Exchange Board of India (SEBI) had conducted investigation for certain...
The Unavailability of Writ Jurisdiction for Interference with One-Time Settlements
The Supreme Court in State Bank of India v. Arvindra Electronics Pvt. Ltd. (4 November 2022) was concerned with the question whether a High Court, in exercise of its writ jurisdiction under Article 226 of the Constitution, can intervene in the terms of a one-time settlement (OTS) entered into between a defaulting borrower and a lending bank, for instance by extending the time period for payment...
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