[Ritvij Ratn Tiwari is a 3rd-year B.A., LL.B. (Hons.) student at the National Law School of India University, Bangalore.] In June 2023, the Reserve Bank of India (“RBI”) issued guidelines regulating the arrangements for sharing the losses arising from defaulted loans, popularly called default loss guarantee (“DLG”), between regulated entities (“REs”) and lending service providers (“LSPs”). These...
Section 241 of the Companies Act, 2013: An Avenue for Derivative Actions
[Rakshit Agarwal is a 2nd Year Student at the National Law School of India University, Bangalore] The judgment of the Delhi High Court in ICP Investments v Uppal Housing Pvt Ltd has spurred the debate as to whether section 241 of the Companies Act 2013 (“Act”) is the appropriate provision under which derivative actions can be instituted. The decision in ICP Investments to include derivative...
SEBI’s Order on Spoofing – A Way Forward
[Shivangi Paliwal and Mahak Shinghal are final year B.A. LL.B. (IPR Hons.) and B.B.A. LL.B. (IPR Hons.) students at National Law University, Jodhpur] Section 12A of the Securities and Exchange Board of India Act, 1992 [“SEBI Act”] read along with Regulation 3 & 4 of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 [“PFUTP...
Regulating the Regulator: A Prohibited Territory for the CCI
[Shourya Mitra is a penultimate year law student at Jindal Global Law School, Sonipat] On 2 June 2023, the Delhi High Court, in the case of Institute of Chartered Accountants of India (“ICAI”) v. CCI, held that the Competition Commission of India (“CCI”) lacks jurisdiction to assess grievances arising from a statutory regulator’s decisions. It held that the CCI could not compel or outsource...
Put Options: Putting Up with Foreign Exchange Regulation
[Ryan Joseph is a 3rd year B.B.A., LL.B. (Hons.) student at Jindal Global Law School] A decision of the Madras High Court in January this year in GPE (India) Limited v. Twarit Consultancy has added to the controversial debate over the enforcement of put options that guarantee assured returns. The High Court toed the line with other courts and upheld an arbitral award, notwithstanding the...
Reimagining the Insolvency Process: A Case of Multiple Resolution Plans
[Piyush Kr. Choubey and Kaustubh Kumar are 4th year students at the National University of Study and Research in Law, Ranchi] The Ministry of Corporate Affairs (“MCA”) in January 2023 floated a discussion paper on possible changes to the Insolvency and Bankruptcy Code, 2016 (the “Code”). One of the topics in the discussion paper was “Reimagining the consideration of the resolution plan and the...
Securing Borrowers, Shielding Lenders: RBI’s Default Loss Guarantee Regulations
[RS Sanjanaa is a 3rd year BA LLB (Hons.) student at Symbiosis Law School, Pune] The Reserve Bank of India (RBI) has granted approval to and released guidelines (on June 8, 2023) on the much-contended topic of default loss guarantee (DLG). A DLG model according to this refers to the default loss cover provided to a bank or non-banking finance company (NBFC) by the fintech company that was the...
SEBI’s Reforms for REITs/InvITs: Assessing the Broader Corporate Governance Concerns
[Nikhil Javali is a 4th year B.B.A. LL.B. student at National Law University Odisha] As real estate investment trusts (‘REITs’) and infrastructure investment trusts (‘InvITs’) gain global recognition as a powerful investment vehicle, India is taking significant strides towards aligning its REIT/InvIT regulations with global best practices. Across the world, REITs have emerged as a dominant...
Stricter Framework for Sale, Lease or Disposal of Undertaking by a Listed Entity
[Nitu Poddar is a Partner at Vinod Kothari and Company, and can be reached at [email protected]] Disposal of an undertaking (whole or substantially the whole) can be carried out either as part of a scheme of arrangement or otherwise by way of slump sale or business transfer agreement (‘BTA’). Disposal, other than by way of scheme of arrangement, has so far been regulated according to...
Call for Submissions: Trade, Law and Development
[Announcement on behalf of Trade, Law and Development] Founded in 2009, the philosophy of Trade, Law and Development (TL&D) has been to generate and sustain a constructive and democratic debate on emergent issues in international economic law and to serve as a forum for the discussion and distribution of ideas. Towards these ends, the Journal has published works by noted scholars such as the...
Call for Papers: NLUJ Law Review
[Announcement on behalf of the NLUJ Law Review] NLUJ Law Review is the flagship journal of National Law University, Jodhpur, established with the objective of promoting academic research and fostering debate on contemporary legal issues. It is a bi-annual, double-blind student reviewed and edited journal, focusing on an inter-disciplinary approach towards legal writing. The remit of the Reviewis...
Private Equity Firms and the Liability Puzzle of their Subsidiaries
[Rupam Dubey is a 2nd year B.A.LLB student and Hrithik Merchant a 4th year B.A.LLB student, both at the National Law School of India University Bangalore] The traditional essence of private equity was rooted in the strategy of acquiring companies for the purpose of selling them, while remaining detached from the day-to-day operations of the portfolio company. However, the landscape of modern...
Call for Papers by RMLNLU Law Review Volume XIV
[Announcement on behalf of Dr. Ram Manohar Lohiya National Law University] Dr. Ram Manohar Lohiya National Law University (RMLNLU) is a public law school and a National Law University located in Lucknow, Uttar Pradesh, India. It was established as Dr. Ram Manohar Lohiya National Law Institute in 2005, and since then, has been providing undergraduate and post-graduate legal education. It ranks...
Analysis of SAT Order: Appointment of Independent Director Above 75 years
[Gaurav Pingle is a practising company secretary and can be reached at [email protected]] Considering the importance of independent directors on the boards of listed entities, the Securities and Exchange Board of India (“SEBI”) has been amending the provisions relating to their appointment, re-appointment, appointment process, remuneration, and the like under the SEBI (Listing Obligations and...
Karvy Demat Case: How has SEBI Responded?
[Anant Budhraja and Praneeta Tiwari are 5th year BA-LLB (Hons.) students at West Bengal National University of Juridical Sciences] The Securities and Exchange Board of India (“SEBI”) on April 28, 2023, passed a stringent final order against Karvy Stock Broking Limited (“KSBL”) and its promoter Comandur Parthasarthy, whereby it banned them from accessing the securities market for seven years...
PMLA Framework on Virtual Digital Assets: Two Key Issues
[Jaideep Reddy is Counsel and Krati Hashwani a Senior Associate, Trilegal] The virtual digital asset (also known as crypto-asset or cryptocurrency) (VDA) industry is accustomed to legal ambiguity in India. There has been little in the way of legislative clarity, barring the specific income-tax regime introduced in 2022, and piecemeal measures such as a mandatory disclosure of holdings for...
Empirical Analysis of Legal Fees Data for Indian Companies
[Srinivasan Sankaraguruswamy is an Associate Professor of Accounting at the NUS Business School, National University of Singapore and Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore] A significant challenge confronts legal departments of companies. On the one hand, the demand for legal services from external counsel continues to skyrocket given...
Material Adverse Government Action (MAGA): Need for a PPP Framework in India
[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...
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