[Himanshu Dubey and Payal Agarwal are with Vinod Kothari & Co.] The seamless flow of information between a holding company and its subsidiaries is imperative for effective governance at the level of a corporate group. Since listed companies in India often function with complex structures with a number of subsidiaries, it is not feasible for the holding company to deliberate upon all the...
Resolving the Conundrum of Decree-holding Homebuyers under the IBC
[Anand Singh is a 3rd-year student of Hidayatullah National Law University (HNLU), Raipur] Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) allows financial creditors to initiate a corporate insolvency resolution process (“CIRP”) against a corporate debtor. However, whether a decree or recovery certificate holder falls under the said provision has always remained an open question...
Law Over Equity in Condonation of Delay under the IBC
[Anumeha Smiti is a final year B.A.LL.B (Hons.) student at National University of Study and Research in Law, Ranchi] In the recent matter of National Spot Exchange Limited v. Mr Anil Kohli, Resolution Professional for Dunar Foods Limited (14 September 2021), the Supreme Court reiterated the position of law on condonation of delay by the National Company Law Appellate Tribunal [NCLAT] under...
A Look at the Recently Redefined Scope of Section 9 of the IBC
[Jagrati Maru and Vaishnavi Srivastava are 5th year B.A. LL.B. (Hons.) students at Gujarat National Law University in Gandhinagar] Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) empowers an operational creditor to file an application to initiate the corporate insolvency resolution process (CIRP) against a corporate debtor. The section further lists out certain requirements which need...
Revisiting the Enforceability of ‘Foreign-Seated’ Emergency Awards Post-Amazon
[Rishav Sen is a 4th Year B.A., LL.B. (Hons.) student at Jindal Global Law School, Sonipat. He is grateful to Abhijeet Shrivastava and Anujay Shrivastava for providing their valuable feedback on this post] One of the primary objectives of international commercial arbitration is to ensure the enforceability of arbitral awards. To achieve this in practice, once the legal requirements for...
Interim Relief against Third Parties under the Arbitration Act: A Never-Ending Saga
[Ayushi Dubey and Yash Jain are final year B.A. LL.B. (Hons.) students at Institute of Law, Nirma University, Ahmedabad] The Arbitration and Conciliation Act, 1996 (the “Act”) empowers the courts and the arbitral tribunal to grant interim relief under sections 9 and 17 of the Act respectively. The powers of the court under section 9 are wider than that of the tribunal under section 17. Section 9...
Operational Creditors and their Exclusion from the Committee of Creditors under the IBC
[Deevanshu Jaswani is a 4th year B.A., LL.B. (Hons.) student at National Law University, Odisha] The Supreme Court recently in K.N Rajakumar v. Nagarajan has reiterated the ‘settled principle’ of going concern of corporate debtor and held that “[e]very attempt has to be first made to revive the concern and make it a going concern, liquidation being the last resort.” This came in the backdrop of...
Directors’ Liability and Climate Risk in India
Climate change has garnered significant attention given that it poses a serious challenge to sustainable development. No longer is it merely within the domain of voluntary conduct on the part of corporations. Instead, it is a material financial risk that corporations encounter, thereby imposing duties on the boards of directors of corporations to recognise and address climate risk. In “Directors’...
Modification of Arbitral Awards and Section 34: An Alternative Perspective
[Deeksha Pokhriyal is a 3rd year B.A., LL.B. (Hons.) student and Aviral Agrawal is a 4th year B.A., LL.B. (Hons.) student at NALSAR University of Law] The Supreme Court of India in The Project Director, NHAI v. M. Hakeem held that courts, while exercising jurisdiction under section 34 of the Arbitration and Conciliation Act, 1996 (‘1996 Act’) do not possess the power to modify an arbitral award...
Micro-Consultative Mode in Liquidation: Will Liquidations Become More Efficient?
[Sikha Bansal is Partner at Vinod Kothari & Company and can be reached at [email protected]] The Insolvency and Bankruptcy Board of India (‘IBBI’) recently came up with IBBI (Liquidation process) (Second Amendment) Regulations, 2021 (‘Amendment Regulations’) making certain important changes in the provisions pertaining to the liquidation process under Insolvency and Bankruptcy Code...
Enforceability of Foreign Arbitral Awards on Non-signatories
[Anand Singh is a third year student at Hidayatullah National Law University, Raipur] The Supreme Court on 11 August 2021 in Gemini Bay Transcription Pvt. Ltd vs. Integrated Sales Service Ltd. held that foreign arbitral awards are enforceable against non-signatories to the agreement. The judgment clarifies a critical issue, settling the position that the grounds contained under the Arbitration...
ESOPs to Non-permanent Employees: An Analysis of SEBI’s Recommendation
[Anant Budhraja is a III year student at the West Bengal National University of Juridical Sciences, Kolkata] Unacademy, the ed-tech unicorn, became the first Indian company to issue Employee Stock Options (ESOPs) to gig workers, i.e., educators on their platform, in July 2021.These options, referred to as Teachers Stock Options (TSOPs), constituted a corpus of $40 million, which had directly...
Arbitrability of Antitrust Disputes
[Avnish Prakash and Sakshi Jha are 4th year B.A., LL.B. (Hons.) students at Hidayatullah National Law University, Raipur] Arbitration is a private and consensual mode of dispute settlement which has gained immense importance in the contemporary commercial era. Fundamentally, disputes before arbitration must be of private nature, as it is not considered appropriate if disputes with public...
Fallacy in Extending Section 29A of IBC to Liquidation
[Amay Bahri is a final year student at National Law University, Delhi] Section 29A of the Insolvency and Bankruptcy Code, 2016 (“IBC”) is one of the most contentious and debated provisions under the legislation. It creates a statutory bar on certain persons (being promoters or management of corporate debtors) as well as persons connected to, related to, and working jointly with such persons from...
Going Concern Sales under IBC: An Analysis
[Kumari Saloni is a 4th year B.A.LL.B. (Hons.) student at National Law University, Delhi] The corporate insolvency resolution process under the Insolvency and Bankruptcy Code 2016 (‘IBC’) aims at the revival of financially distressed companies. Contrarily, liquidation only aims at maximum recovery to the creditors because in liquidation a debtor does not survive after the event. However, the...
The Need for Standardizing Valuation Methods in Corporate Insolvency
[Saurabh Agnihotri is a 4th year BA. LLB student and Ayushi Mehta a 4th year BBA. LLB student at Gujarat National Law University] Under the Insolvency and Bankruptcy Code, 2016 (“IBC”), valuation of assets is one of the core features dealt with in a corporate insolvency resolution process (“CIRP”). The process of valuation conducted by registered “valuers” or valuation professionals helps...
Looking Beyond Gender to Make Corporate Boardrooms Diverse in India
[Harsh N Dudhe & Pranay Bhardwaj are III year BA LLB (Hons) students at NALSAR, Hyderabad. The authors would like to thank Dr. Akshaya Kamalnath for her comments on the post] On August 6, 2021, the U.S Securities and Exchange Commission (SEC) approved a proposal by the Nasdaq Stock Market LLC (Nasdaq), which aims to enhance the corporate board diversity for Nasdaq-listed companies. This...
Commercial Wisdom vs. Judicial Wisdom: An Ongoing Debate of Primacy
[Kartik Singh is a 4th year B.A., LL.B. (Hons.) student at National Law University, Odisha, Cuttack] The Insolvency and Bankruptcy Code, 2016 (IBC) was enacted with the objective of providing a time-bound insolvency resolution mechanism to a financially stressed company and saving it from liquidation. For the said purpose, the committee of creditors (CoC) comprising financial creditors is at the...
Green Bonds in India: The Present and What Next
[Naga Sai Srikar HK is a fifth-year B.A., LL.B. (Hons.), student at School of Law, CHRIST (Deemed to be University) Bangalore] Green bonds (GBs) have lately gained prominence globally and are being seen as a lucrative opportunity by both investors and corporations looking at debt financing options. The Covid-19 pandemic has nudged policy makers across the world to rethink on priorities and adopt...
Compounding under Section 24A of SEBI Act: Charting A New Course
[Navya Saxena and Aadya Bansal are 4th-year B.A., LL.B. (Hons.) students at National Law Institute University, Bhopal] In Prakash Gupta v. Securities and Exchange Board of India (26 July 2021), the Supreme Court has addressed the question of whether the Securities and Exchange Board of India (“SEBI”) has veto power over compounding of offences under the Securities and Exchange Board of India Act...
Hanging by a Thread: The Saga of Interest-Free Loans under the IBC
[Ojaswi Shankar is with ICICI Bank in Mumbai] In Orator Marketing Private Limited v. Samtex Desinz Private Limited (26 July 2021), the Supreme Court held that a person who has advanced an interest-free loan to a corporate entity would be a ‘financial creditor’ and, hence, competent to initiate a corporate insolvency resolution process (“CIRP”) under section 7 of the Insolvency and Bankruptcy...
Qualitative Tests for Accredited Investors: A Comparative Study
[Mehek Wadhwani and Rishi Raj are third-year students of B.A. LL.B. (Hons.) at MNLU Aurangabad] The Securities and Exchange Board of India (SEBI) recently ushered in the concept of a new class of investors in the Indian securities market, termed as accredited investors or qualified investors or professional investors. On 3 August 2021, the SEBI (Alternative Investment Funds) Regulations, 2012...
Recourse to Appropriate Proceedings against Personal Guarantor of Corporate Debtor
[Akansha Uboveja is a fifth-year B.A., LL.B. (Hons.), student at Hidayatullah National Law University, in Raipur] Recently, the National Company Law Appellate Tribunal (NCLAT) in Nitin Chandrakant Naik v. Sandhiya Industries LLP clarified the position of personal guarantors in corporate insolvency resolution proceedings (CRIP) initiated against a corporate debtor under the Insolvency and...
Call for Papers: HNLU Conference on “Calibrating Corporate Governance in New Economy”
[Announcement on behalf of Hidayatullah National Law University, Raipur] Established in 2003, Hidayatullah National Law University, Raipur is one of the leading law schools in the country. In a short span of time, HNLU has carved out a niche in the realm of legal education across India and the legacy is soaring towards newer heights day by day. Named after the great legal luminary Justice...
‘Ordinary Course of Business’ Defence under the IBC: Origin and Scope
[Saai Sudharsan Sathiyamoorthy is an advocate practising at the Madras High Court and is one of the Chief Specialist Editors of Wadhwa Law Chambers Guide to Insolvency & Bankruptcy Code (2nd edition, 2021). He can be contacted at [email protected].] One way that the Insolvency & Bankruptcy Code, 2016 (“the Code”) seeks to secure pro rata distribution among similarly placed...
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