[Medhashree Verma and Kavya Lalchandani are 3rd year B.B.A, LL.B. students at National Law University Odisha, Cuttack] In a recent judgment in Jignesh Shah v. IL&FS Financial Services Limited & Anr., the National Company Law Appellate Tribunal (NCLAT) dealt with the interpretation of the term ‘financial debt’ under the Insolvency and Bankruptcy Code, 2016. It is only when the debt...
Venue vs. Seat: A Curious Case for the Indian Judiciary’s Self-Restraint
[Divpriya Chawla is an associate with a law firm in Delhi] The crucial importance of the choice of the ‘seat’ in an international arbitration is universally accepted and cannot be overstated due to its impact on the questions of applicable law, nature of supervisory jurisdiction, post-award challenge proceedings, and enforceability (2015 International Arbitration Survey). Despite the profound...
CCI’s Order in the Snapdeal – KAFF Case
[Gokul Plaha is a fifth year year B.A., LL.B. (Hons.) student at the National Law University, Delhi] By way of an order dated 15 January 2019 passed under section 26(6) of the Competition Act, 2002 (the Act) in Jasper lnfotech Private Limited (Snapdeal) and KAFF Appliances (India) Pvt. Ltd. (KAFF) (15 January 2019), the Competition Commission of India (CCI) clarified that section 3(4)(e) of the...
Negating Negative Covenants: A Deterrence to Private Equity Investment in India?
[Shuchita Goel is a V year B.A., LL.B. (Hons.) student at National Law University Delhi] The Indian corporate landscape is dominated by firms with concentrated ownership, where the controlling shareholders (also known as promoters) play an all-pervasive role in corporate governance.[1] Parties in control of a corporation are in a position to extract private benefits of control that do not accrue...
Supreme Court Enhances Information Rights of Directors in Insolvency Process
In Vijay Kumar Jain v. Standard Chartered Bank (decided on 31 January 2019), the Supreme Court was concerned with the question whether under the Insolvency and Bankruptcy Code, 2016 the resolution professional is obligated to provide to members of the suspended board of directors all relevant documents pertaining to the corporate insolvency resolution process, including the resolution plan. The...
Announcement: Researchers in Corporate and Financial Laws
[Announcement from the National Institute of Public Finance and Policy] The National Institute of Public Finance and Policy is looking to hire two researchers (1 legal researcher and 1 economics/public policy researcher) on a full-time basis in the field of corporate and financial laws. The positions are based out of Delhi. Our work is inter-disciplinary, bringing together knowledge of public...
Initiation of Corporate Insolvency Resolution Process for Arrears in Lease Transactions
[Tejpal Singh Rathore is a 4th-year B.B.A. LL.B. (Hons.), student at Gujarat National Law University in Gandhinagar] Corporate Insolvency Resolution Process (“CIRP”) can be invoked by a financial creditor, an operational creditor and a corporate debtor itself. An application can be filed by a financial creditor under section 7 of Insolvency and Bankruptcy Code, 2016 (“Code”) if there is any...
An Overview of Exceptions to Moratorium under the Insolvency And Bankruptcy Code
[Radhika Malpani is a 3rd year B.B.A., LL.B student at National Law University, Jodhpur] With the enactment of the Insolvency and Bankruptcy Code, 2016, (“Code”) a unified framework to deal with insolvency has been set in place. Previously, insolvency was dealt under multiple statutes and scattered provisions embedded with numerous complexities. With the introduction of the Code, the liquidation...
Supreme Court on Jurisdictional Conflicts between the CCI and TRAI
[Rajvansh Singh is a 3rd year student at National Law University Odisha] Conflict in Jurisdiction The preamble of the Competition Act, 2002 read with section 18 of the legislation delegates to the Competition Commission of India (the “CCI”) the duty of “promoting and sustaining competition” in the Indian economy. This implies that the CCI will have principal jurisdiction to regulate conditions...
A Question of Interpretation in Identifying Significant Beneficial Owners
[Aditi Tomar is a 4th Year B.A.LLB (Hons.) Student at NALSAR University of Law, Hyderabad] The Ministry of Corporate Affairs notified the Companies (Significant Beneficial Owners) Rules, 2018 (“Rules”) in the official gazette on 14 June 2018. The power to formulate these Rules is derived from section 90 of the Companies Act, 2013 (“Act”). These Rules cast an obligation on both public and private...
CCI Order on Price Fixing: Collusion in Cab Aggregation Models?
[Kaustub N. S. Bhati and Prankul Boobana are 3rd Year B.A. LL.B. (Hons) students at NALSAR University of Law, Hyderabad] The Competition Commission of India (CCI) passed an order on 6 November 2018 dismissing the allegation that Ola and Uber (Cab Aggregators), through their algorithmic pricing mechanisms, are indulging in price fixation in accordance with section 3(3)(a) of the Competition Act...
Supreme Court Upholds Constitutionality of the Insolvency and Bankruptcy Code
“The defaulter’s paradise is lost. In its place, the economy’s rightful position has been regained”[1] It is not at all surprising that those affected by debt recovery and insolvency legislation, being primarily debtors, would mount constitutional challenges to those legislation. Earlier examples include challenges to the Sick Industrial Companies (Special Provisions) Act, 1985 (D Ravikumar v...
Securitization and Direct Assignment Transactions in the Indian Economy
[Vineet Ojha is Manager – IFRS & Valuation Services at Vinod Kothari Consultants Pvt Ltd] The current financial year has witnessed a sharp surge and a life time high in the volume of securitization and direct assignment transactions in the Indian economy. Consequent to the funding problems that non-banking finance companies (NBFC) and housing finance companies (HFCs) have been facing...
Analyzing the Draft E-Pharmacy Rules
[Akash Santosh Loya and Pratik Joshi are Final Year B.A. LL.B. (Hons.) students at the National University of Advanced Legal Studies, Kochi] While the advent of e-commerce has introduced several advantages, it has also raised various concerns. These are evident in the pharmaceutical sector in India wherein e-commerce is making great strides in helping consumers avail of drugs at their door-step...
RBI Notifies New Framework Policy for External Commercial Borrowings
[Nidhisha Garg is a 3rd year B.A., LL.B (Hons.) student at the National Law Institute University, Bhopal] On 16 January 2019, the Reserve Bank of India (RBI) notified the new policy for External Commercial Borrowings (ECB). It seeks to revise the policy that was earlier in place by virtue of the Master Direction on External Commercial Borrowings dated 1 January 2016, as updated from time to time...
Can an Ex-employee of a Party be appointed as an Arbitrator?
[Rajvansh Singh and Tanay Mishra are students at National Law University Odisha] Independence and impartiality are considered to be the cornerstone of arbitration. The duty of an arbitrator to remain independent and impartial is codified under section 12 of the Arbitration and Conciliation Act 1996 (the “Act”). Neither section 12 of the Act nor Article 12 of the UNCITRAL Model Law provides any...
ESG Reporting in India
The NSE Centre for Excellence in Corporate Governance (CECG) has issued its most recent quarterly briefing titled “Environmental and Social Reporting by Indian Companies”, which I have authored. The executive summary is as follows: Recent years have witnessed a strong focus on long-term sustainable value in companies rather than short-term profitability. The need for greater transparency on...
Attachments of Properties Subject to a Moratorium
[Rohit Sharma is a Partner at Mamta Binani & Associates] The promulgation of the Insolvency and Bankruptcy Code, 2016 (‘Code’) has led to an enormous number of applications being filed before the adjudicating authority for initiation of the corporate insolvency resolution process (‘CIRP’) against a company. The purpose of the Code, according to the Report of the Insolvency Law Committee, was...
Consumer Disputes to be Non-Arbitrable: SC Lays to Rest the Controversy
[Nidhisha Garg is a 3rd year student at NLIU Bhopal] The Supreme Court observed in Emaar MGF Land Limited v. Aftab Singh (10 December 2018) that consumer disputes are non-arbitrable, thus putting to rest the ongoing debate on the same. Aftab Singh, in the present matter was aggrieved due to the delayed delivery of possession by the Emaar MGF upon purchase of property. The buyer’s agreement had an...
Binani Judgment: A Ray of Hope for Operational Creditors
[Ashish Rana is an Advocate on Record in the Supreme Court of India] The Insolvency and Bankruptcy Code, 2016 (‘I&B Code’) provides for resolution of insolvency of persons in a time bound manner along with the maximisation of value of such person’s assets, to promote entrepreneurship, availability of credit and to balance the interests of all stakeholders. Under the I&B Code, upon...
DIPP’s Revised FDI Policy for E-commerce: Changing the Rules of the Game
[Baibhav Panda is a recent law graduate from KLE Law College, Bengaluru and is presently a legal trainee at Nucleus Software Limited] On 26 December 2018 the Department of Industry and Promotion (DIPP), Ministry of Commerce and Industry issued Press Note 2 (2018 series) introducing changes to the conditions that would be applicable to the e-commerce entities. The press note now amends para 5.2.15...
Arbitrating ISDA Disputes: A Bright Future for Derivative Markets
[Saurav Roy is a final-year law student [V B.A.LL.B] at ILS Law College, Pune] The International Swaps and Derivatives Association (“ISDA”) is the go-to trade organisation for participants in the over-the-counter (“OTC”) derivatives market. The ISDA Master Agreement (“Master Agreement”) is a standardised agreement which allows participants to enter into these derivative transactions. Although the...
Rights of Preference Shareholders under the Insolvency Code
[Shubham Jain and Kannan Jhunjhunwala are BA.LLB (Hons.) students at National Law University, Delhi] The National Company Law Appellate Tribunal (NCLAT) in Brij Bhushan Singhal v Bhushan Steel Ltd. (10 August 2018) allowed for preference shares to be redeemed outside the purview of section 55 of the Companies Act, 2013 when required by the resolution plan. In this case, with Tata Steel Ltd. as...
SEBI’s Considerations for Granting Exemption from a Takeover Offer (Batliboi)
[Prateek Surisetti is a V Year B.A. LL.B. student at NALSAR University of Law] I write to analyze an Order (dated 5 July 2018) of the Securities and Exchange Board of India (“SEBI”), which exempted a proposed acquirer from complying with regulation 3 of the SEBI (Substantial Acquisitions and Takeovers) Regulations, 2011 (the “Takeover Regulations”). The Order sheds light on the particular...
Cross Listing of Shares: A Start
[Rahul Sinha is a consultant with EY] The Securities and Exchange Board of India (“SEBI”) constituted the ‘Expert Committee for listing of equity shares of companies incorporated in India on foreign stock exchanges and of companies incorporated outside India on Indian stock exchanges’ on 12 June 2018 with a view to facilitating companies incorporated in India to directly list their equity shares...
Recent Comments