The Gujarat High Court judgment discussed in a post yesterday by a guest contributor, Saurav Roy, brings to the fore several tricky issues and questions relating to the extent to which the Reserve Bank of India (RBI) ought to be involved in matters relating to the resolution of corporate insolvency. While matters of insolvency are essentially within the purview of the National Company Law...
Gujarat High Court Rules on RBI’s Powers Relating to Corporate Insolvency
[Guest post by Saurav Roy, IV B.A.LL.B, ILS Law College, Pune.] Introduction Last week, the Gujarat High Court ruled on some interesting issues under the Insolvency and Bankruptcy Code 2016 (“IB Code”) while adjudicating upon a writ petition filed by Essar Steel Ltd., (“Essar”) against the Reserve Bank of India’s (“RBI”) decision to initiate insolvency proceedings against Essar and 11 other...
Activism through Directors Elected by “Small Shareholders”
Recent news reports (here, here and here) have highlighted a shareholder proposal that has been initiated in preparation for the annual general meeting of Alembic Limited to be held on 28 July 2017. The shareholder in question is Unifi Capital Private Limited who is said (though not verified) to be holding 3% shares in Alembic. The proposal involves the election of a “small shareholder” director...
Insolvency & Bankruptcy Code: Arbitral Proceedings and Bona Fide Dispute
[Guest post by Puneet Dinesh, is a IV year student at the National Law University, Delhi. He can be reached at [email protected].] The Insolvency and Bankruptcy Code, 2016 (the ‘Code’) has given rise to some interesting legal questions. As previously discussed on this Blog (here and here), the interpretation of the term ‘dispute’ under section 5(6) of the Code has arisen multiple times...
Section 26 of the Arbitration and Conciliation (Amendment) Act 2015: A Case of Misinterpretation
[Guest post by Aishwarya Singh, IV Year B.A., LL.B. (Hons.), Jindal Global Law School] A recent post on this Blog had discussed the conundrum surrounding the applicability of the Arbitration and Conciliation (Amendment) Act, 2015 (“Amendment Act”). The post discussed the conflicting judgements of High Courts regarding the applicability of the amendment to applications filed under section 34 of...
Holding Period and Corporate Veil in a Takeover Offer
[Guest post by Vaneesa Agrawal, who is Partner, Suvan Law Advisors. She can be reached at [email protected].] Last week Supreme Court of India issued a significant judgement in the matter of Laurel Energetics Pvt. Ltd. v. SEBI, Civil Appeal No. 5675 of 2017 on the issue of the interpretation of Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011...
Reprimand or Warning Orders by NCLT
[Guest post by Rohit Sharma, Executive at Vinod Kothari & Co.] Background UW International Training & Education Centre for Health Private Limited voluntarily filed an application before the National Company Law Tribunal (‘NCLT’) with respect to a matter pertaining to section 56(2)(a) of the Companies Act, 2013 (the ‘Act’) for transfer and transmission of securities. In this regard...
Bombay High Court on the Permissibility of Shareholder Representative Suits
Bar & Bench yesterday reported that the Bombay High Court denied leave to certain shareholders of various Tata group companies to bring a representative suit that made certain legal claims in the aftermath of the ouster of Mr. Cyrus Mistry from the board of Tata Sons as well as other Tata group companies. The order of the court in Pramod Premchand Shah v. Rata Tata is now available. Facts and...
Non-Disposal Undertaking and its Reporting in the Indian Securities Market
[Guest post by Divyajyot Verma, a student at the Jindal Global Law School] Non-Disposal Undertakings (or agreements) (“NDUs”) are signed usually by the debtor in favour of the lender in relation to any loan obligation undertaken by the debtor. An NDU helps in ensuring that the debtor does not transfer the shares held by it in a company by way of outside arrangements such that the creditor is left...
Minimizing the Liability of Directors: SEBI’s Order in the Zylog Case
[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Liability of directors is a sensitive topic in India, particularly for foreign investors who propose to nominate directors to the boards of their Indian investee companies. That is why clauses are inserted in shareholders’ agreements to the effect that the investor’s nominee director will not be identified...
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