[Sri Janani S. is a 3rd year B.A., LL.B. (Hons.) student at National Law University, Jodhpur] In the recent years, public-private partnerships (“PPPs”) have been increasing manifold in India. The state is recognizing the private sector’s indispensable role in the infrastructure sector, urban water projects, healthcare and even in the development of electric vehicles. The Government is encouraging...
ClientEarth-Shell: English Court Rejects Climate-Focused Shareholder Derivative Suit
[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...
Supreme Court Ruling: Admission of Corporate Insolvency a Norm, Rejection an Exception
[Megha Maiti and Subhasmita Routray are legal counsels at Mercedes-Benz Financial Services India Private Limited] Section 7(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) lays down the power of the National Company Law Tribunal (NCLT) to either accept or reject an insolvency application filed by a financial creditor. The issue of whether the said power is mandatory or discretionary in...
SEBI’s Regulatory Focus: Examining AIF Investors’ Excuse And Exclusion Rights
[Shreya Singh is a 5th year B.B.A., LL.B. (Hons.) student at National Law University, Odisha in Cuttack, Odisha] Over the past decade, the alternative investment funds (“AIFs”) regime (which structures in the private equity and venture capital investment) in India, has experienced substantial expansion. Private equity investments in India reached a cumulative value of $44 billion between 2015 and...
SEBI’s Circular on Transition Bonds: Can it Combat Greenwashing?
[Vatsal Jain and Vedant Bhardwaj Singh are 3rd year B.A., LL.B. (Hons) students at Hidayatullah National Law University] On 4 May 2023, the Securities and Exchange Board of India (‘SEBI’), by way of a circular titled ‘Additional requirements for the issuers of transition bonds’ (‘Circular’) laid down certain additional compliance measures for the issuance of transition bonds to prevent the...
Position of a Seller of an Immovable Property under the Insolvency and Bankruptcy Code, 2016
[Lavanya Pathak and Pallavi Mishra are advocates practicing in the Delhi High Court] Under the Insolvency and Bankruptcy Code, 2016 (“IBC”), there is a clear scheme of categorization of creditors for the purpose of initiation of the corporate insolvency resolution process (“CIRP”). This categorization lies at the core of the waterfall mechanism for distribution of assets prescribed under section...
Shareholder Protection under IBC: A Myth or a Possibility
[Dhruv Kohli is a 4th year B.A.LLB student and Sanya Singh a 4th year B.S.W LLB student, both at Gujarat National Law University] Ever since the enactment of the Insolvency and the Bankruptcy Code, 2016 (IBC), there has been a shift in the debt resolution mechanism in India. Unlike its predecessors, the IBC is a creditor-centric legislation, which can be ascertained from the fact that once there...
Reevaluating the Independence of Credit Rating Agencies: Time for Stricter Norms?
[Akanksha Dutta is a final year student of the 3-year LLB course at Government Law College, Mumbai] Credit Rating Agencies (“CRAs”) in India play a very vital role in determining the overall financial health of a company as well as the safety of the securities issued by such companies. The assessments made by CRAs assist investors, both large and small, in evaluating the risk linked to the...
Perpetuating an Anomaly: What is the “Prescribed Period” for Challenging an Arbitral Award?
[Rhythm Buaria is an advocate practicing commercial and matrimonial disputes before courts in Delhi] The Supreme Court in Bhimashankar Sahakari Sakkare Karkhane Niyamita v. Walchandnagar Industries Ltd. (WIL) held that a challenge to an arbitral award under section 34 of the Arbitration and Conciliation Act, 1996 cannot be entertained under the proviso to section 34(3) even if the 30-day period...
Constitutionality of Section 327(7) of the Companies Act 2013: Sanctity of the Waterfall Mechanism
[Simran Malhotra is an Associate at Shardul Amarchand Mangaldas, New Delhi] In Moser Baer Karamchari Union v. Union of India (2 May 2023), workmen unions challenged the constitutionality of section 327(7) of the Companies Act (“Act”) for excluding preferential payment for workmen’s dues over other dues as provided under sections 326 and 327 of the Act in the event of liquidation of a company...
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