In schemes of arrangement, whether by way of a merger, demerger or other form of corporate restructuring, the timing of when the transaction takes effect becomes important. It is from such a date that the financial statements of the companies involved will reflect the effect of the transaction. Given that the transaction may be completed anytime during the course of a financial year, parties have...
Videocon Case: The Doctrine of Substantial Consolidation
[Harshit Agrawal is a B.A. LL.B. (Hons.) student at Dr. Ram Manohar Lohiya National Law University, Lucknow] Some of the biggest challenges faced by the Insolvency and Bankruptcy Code, 2016 (IBC) in India are to get a fair value for the stressed industries as a going concern keeping in mind the interest of the creditors. The problem becomes more aggravated in the ‘group company’ situation where a...
Home-Buyers in the IBC: Square Pegs in Round Holes?
[Sikha Bansal is a Senior Associate at Vinod Kothari & Company and can be reached at [email protected]] The ruling of the Supreme Court in Pioneer Urban Land and Infrastructure vs. Union of India comes as a breather for home-buyers, as it upholds the constitutional validity of the amendments made last year to section 5(8) of the Insolvency and Bankruptcy Code, 2016 (IBC). Section...
Impact of Recent Amendments to the Insolvency and Bankruptcy Code
[Ashwin Gowda and Supreme Waskar are corporate lawyers in Mumbai. The views hereunder are personal] With the Insolvency and Bankruptcy Code (Amendment) Act, 2019 being notified on 6 August 2019, it would be important to discuss the changes introduced through the Amendment as it intends to address the critical issues in the corporate insolvency resolution framework, including one pursuant to the...
Initiation of CIRP against a Government Company: NCLT Faces another Conundrum
[Rongeet Poddar is a final year B.A. LLB (Hons.) student at West Bengal National University of Juridical Sciences, Kolkata] In Harsh Pinge v. Hindustan Antibiotics Limited, the two members of the National Company Law Tribunal (NCLT) Mumbai bench have laid down contrary opinions in a case concerning the admission of an insolvency plea by an operational creditor against Hindustan Antibiotics...
Trade Associations and Pharmaceutical Industry: A Competition Conundrum
[Yashvardhan Singh is a 2nd year student and Palash Moolchandani a 3rd year student, both at the National Law University Odisha] Trade Associations are business platforms where players of a particular industry meet to discuss common concerns and to take collective decisions about certain practices in that industry. The role of trade associations in any industry and the economy cannot be disputed...
Tribute to a Trailblazer in Indian Legal Education
We are deeply saddened to learn about the passing of Professor Shamnad Basheer. Shamnad was far from the archetypal legal academic. While he enjoyed a stellar reputation for teaching and research in the field of intellectual property (IP), his heart was set on nobler goals such as diversity in access to legal education and reforms in the common law admissions test (CLAT) in law schools. It is...
Implementing Pre-packaged Insolvency in the Indian Context: Challenges and Suggestions
[Akhil Kumar is a fifth year BA LLB (Hons.) student and Ayushi Singh a fourth year BA LLB (Hons.) student, both at NUALS, Kochi] The Ministry of Corporate Affairs has been considering the introduction of a pre-packaged insolvency process to the Insolvency and Bankruptcy Code, 2016 and has invited comments from stakeholders. The proposal is in line with the objectives of the code to ensure...
SEBI Committee on Regulating Proxy Advisors
Over the last decade, India has witnessed considerable shareholder activism in that shareholders, particularly institutions, have become more active in exercising their corporate franchise. Proxy advisory firms have formed an integral part of this movement, as they provide advice to both institutional and individual shareholders on how they may exercise votes at shareholder meetings of companies...
The IBC Amendment Bill: Defending the Design of the IBC
[Shreya Prakash is the Coordinator of the Vidhi Bankruptcy Research Programme] The Insolvency and Bankruptcy Code (Amendment) Bill, 2019 passed by Parliament last week proposes key amendments to the Code, to reduce uncertainty in the market on issues that go to the heart of the design of the scheme of the Code. While the Bill proposes various amendments to reduce delays in the process, and binds...
Revisiting The Tale Of The Stubborn Law: The Saga of ‘Venue’ vs. ‘Seat’ Of Arbitration
[Kunal Dey is a Judicial Research Assistant] The simple yet intriguing concepts of ‘seat’ vs. ‘venue’ of arbitration has been at the core of many judicial decisions by various High Courts and the Supreme Court of India who have time and again strived to put the issue to rest. In 2018, the substantial question was assumed to be decided by the landmark judgment of the Supreme Court in the case of...
Appointment of Judges to the Appellate Dispute Settlement Body of the WTO: The Ongoing Impasse
[Jyotsana Singh is a fifth-year student at National Law School of India University, Bangalore] The Dispute Settlement Body (DSB) of the World Trade Organization (WTO), popularly referred to as the ‘crown jewel’ of the said organization, is experiencing an unprecedented crisis. This crisis revolves around the issue of the American attempts at stalling the appointment of judges to the Appellate...
Call for Submissions: Trade, Law and Development
[Announcement on behalf of Trade, Law and Development] The Board of Editors of Trade, Law and Development (TL&D) is pleased to invite original, unpublished manuscripts for publication in the Winter ’19 Issue of the Journal (Vol. 11, No. 2) in the form of Articles, Notes, Comments and Book Reviews. Manuscripts submitted by September 30, 2019 pertaining to any area within the purview of...
Delhi High Court Upholds the Interests of Direct Sellers: A Ray of Hope?
[Deeksha Gabra is a chartered accountant and Shivam Gupta is a final-year law student at the Rajiv Gandhi National University of Law, Punjab] Direct selling (also known as network marketing or multi-level marketing), as the name suggests, refers to selling products directly to the consumer in a non-retail environment. The product moves from the manufacturer to a direct sales company, which are...
SEBI’s Consultative Paper: A Step towards a Stricter Regime for Auditor Resignation
[Shreshtha Mathur is a fourth year law student at National Law University, Jodhpur] A statutory auditor is appointed by a company according to the statutory requirement, in order to inspect and form an opinion about the fair presentation of a company’s accounts. Section 139 of the Companies Act, 2013 mandates that every company must appoint an individual or a firm as an auditor at its first...
The Effect of an Increased Free Float on India’s Promoter-Controlled Companies
[Shiluti Walling is a 4th year B.A., LL.B. (Business Law Hons.) student at National Law University, Jodhpur] The Union Finance Minister recently proposed the increase of the minimum public shareholding (MPS or free float) from 25% to 35%. Prior to the proposal, public shareholders of a listed company were required to hold at least 25% of the paid-up capital of the company as free float, pursuant...
Liquidation Regulations: Far-Reaching Changes to Make Liquidations Faster, Smoother
[Vinod Kothari is an insolvency practitioner at Vinod Kothari & Co and can be reached at [email protected]] The attention that reforms in liquidation regulations has received, relative to what has gone into the case of resolution, is far lesser than deserved, given the percentage of the resolution cases that slip into liquidation. Most of the major liquidations initiated 12 to 18...
CSR Becomes Stringent, With Penal Consequences
The concept of corporate social responsibility (CSR) took on a different hue in India with the enactment of the Companies Act, 2013. Section 135 of the legislation introduced a requirement on large companies to spend two percent of their average profits over the preceding three years towards certain statutorily defined causes. Although often mistakenly considered to be mandatory, the statutory...
NCLAT’s Order in Essar Steel: Implications of Proposed Amendments to the IBC
[Jubin Jay is a 5th year BBA.LLB student at National Law University Odisha] The National Company Law Appellate Tribunal (NCLAT) on 4 July, 2019 passed an order in the Essar Steel insolvency case (Standard Chartered Bank v. Satish Kumar Gupta). Extending to more than a hundred pages, the appellate body heard appeals from various operational creditors, banks and the state after the committee of...
Call for Submissions: NLUJ Law Review
[Announcement on behalf of the NLUJ Law Review] About the Review The 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 in India. It is a bi-annual, double-blind student reviewed and edited the journal, focusing on an inter-disciplinary approach towards legal...
CCI’s Evolution in Relation to the Smartphone Market
[Sumit Jain is at the Centre for Competition Law and Economics (CCLE)] Through its order dated 16 April 2019 in Umar Javed v. Google LLC, the Competition Commission of India initiated a probe against Google Inc. for its potential abuse of dominant position on the Android platform. The order remains curious from multiple standpoints. First, it was not made public until as late as 18 June 2019...
Will the RBI’s Revised Circular on Stressed Assets Sustain its Validity?
[Surya Rajkumar is a BA LLB student at Jindal Global Law School] The Reserve Bank of India (RBI) had on 7 June 2019 issued its revised circular on the resolution of stressed assets following the decision of the Supreme Court of India in Dharini Sugars and Chemicals Limited v. Union of India, (2019) 5 SCC 480, in which it quashed the RBI’s previous circular dated 12 February 2018 as ultra vires...
Insolvency Proceedings for Conglomerate: Questions and Way Forward
[Piyush Rathi and Saksham Agrawal are 4th Year B.A. L.L.B students at NALSAR University of Law] A majority of large scale businesses today grow around a parent company that branches out into a group of companies, each of which performs a specific function. Such a structure in the form of a conglomerate provides for administrative convenience to the managers of the companies along with a range of...
Status of Arbitration Proceeding and Award during Moratorium
[Jannhvi Bhasin is a commercial & corporate advocate specializing in insolvency law at Kesar Dass B. & Associates and Akshay Sharma is a final year B.A.LLB (Hons.) student at National University of Study and Research in Law, Ranchi] The Insolvency and Bankruptcy Code, 2016 (IBC), which is a complete code in itself and provides for the initiation of a corporate insolvency resolution...
Shareholding Patterns and Director’s Duty of Loyalty: Comparative Analysis of India and the US
[Ishani Mookherjee is a 3rd year B.A. LLB (Hons.) student at Jindal Global Law School] The Delaware Supreme Court, in Cede v. Technicolor Inc., examined the applicability of the business judgment rule in the United States (US). For a business decision to be protected by this rule, two conditions have to be satisfied – the duty of loyalty and the duty of reasonable care. This creates a...
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