[Sikha Bansal is a Senior Associate at Vinod Kothari & Company, and can be reached at [email protected] or [email protected]] In IDBI Limited v. Jaypee Infratech Limited (order dated May 16, 2018), the National Company Law Tribunal, Allahabad Bench (NCLT), dealt with a crucial aspect of insolvency proceedings, namely vulnerable transactions. The resolution professional (RP) of...
Investment by FPIs in Securitised Debt Instruments
[Anita Baid is a Senior Manager at Vinod Kothari Consultants P. Ltd] Investments by foreign portfolio investors (FPIs) in unlisted debentures and securitised debt instruments (SDIs) issued by Indian companies was allowed pursuant to a notification dated 27 February, 2017 issued by the Securities and Exchange Board of India (SEBI). Earlier in November, 2016, the Reserve Bank of India (RBI) had...
CCI Order on the Scope of Section 3(3) and Confidentiality under Leniency Regulations: A Critique
[Amitav Singh is a lawyer based in Lucknow and a graduate of NUALS Kochi] Recently, the Competition Commission of India (CCI) passed an order in Nagrik Chetna Manch v Fortified Securities Solutions & Ors. wherein it found six out of seven parties before it guilty of bid rigging under section 3(3)(d) of the Competition Act, 2001 (the Act) and imposed a total fine of nearly Rs. 3.5 crore. In...
Financial Exposure of Secured Creditors and the Relevance of Vertical Comparison in Resolution
[Richa Saraf is a Legal Advisor at Vinod Kothari Consultants Pvt. Ltd.] An effective conduct of the corporate insolvency resolution process calls for an insight into the ranking of claims of various creditors. In most resolution plans, one finds that the financial creditors are paid a particular value as settlement of claims, and no specific provision exists as to how this amount is to be...
Resale Price Maintenance in the High Technology Market: A Competition Law Perspective
[Mudit Nigam is a 4th Year Student of National Law Institute University, Bhopal] The increased demand for products such as smart phones, ultra-HD televisions, LED lights, high-end laptops and computers, has promoted technological innovation and market growth, leading to the prominence of the high technology market in India. The country is emerging as a global digital lab with more than 20,000...
Taxability of Liquidated Damages from a MAT perspective: Tracing the Law
[Hardeep Singh Chawlais an Advocate practicing in the M&A & PE Tax Department of a Big4 in Gurgaon, Haryana. Views expressed are his own. The author may be reached at [email protected]] ***** “…… in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax...
Cross-Characterization of Share Capital
[Naren BS is an independent legal consultant and was previously a Senior Associate with a leading law firm] This post represents a brief discussion on the characteristics of equity and preference capital under the Companies Act, 2013 and the flexibility of cross-characterization between the two kinds of capital, i.e. imputing the characteristics of one kind of capital to the other. Background and...
SEBI Informal Guidance: Investment Banking for State-Owned Enterprises
In order to avoid potential conflicts of interest, the various regulations issued by the Securities and Exchange Board of India (“SEBI”) provide that merchant banks cannot act in transactions involving their “associates”. This is so in public offerings, takeovers, buybacks, delisting offers and similar transactions that mandate the requirement for a SEBI-registered merchant banker. In case the...
Arbitration: Supreme Court Allows Jurisdictional Challenge in Setting Aside Proceedings
[Ayush Chaturvedi and Chandni Bhatia are 4th Year B.A.LLB (Hons) students at Dr. Ram Manohar Lohiya National Law University, Lucknow] In Lion Engineering Consultants v. State of M.P., the Supreme Court allowed the plea of the State of Madhya Pradesh challenging the jurisdiction of the arbitral tribunal for the first time in a proceeding for setting aside of an arbitral award under section 34 of...
Liquidation Before Resolution?
[Richa Sarafis a Legal Advisor at Vinod Kothari Consultants Pvt. Ltd.] Historically, it has taken an unduly long period of time to wind up or liquidate a company in India as compared to other countries. Such lengthy time-frames are detrimental to the interest of all stakeholders. The process ought to be time-bound, aimed at maximizing the chances of preserving value for the stakeholders as well...
Analysis of “Externalisation” under Indian Law
[Deepansh Guwalani is a 4th Year Student at ILS Law College, Pune] Introduction “Externalisation” is a strategy of incorporating holding companies in offshore jurisdictions to enjoy certain benefits which the home country does not offer. The strategy is employed by companies to move their corporate structures away from the Indian tax and regulatory regimes. How it is done The process of...
A Giant Leap for Investors? – Analysing the Delhi High Court’s Verdict in Union of India v. Vodafone
[Sharanya Shivaraman is a IV year B.A., LL.B (Hons.) student at ILS Law College, Pune] Marking the dawn of a new era for investment arbitration in India, the High Court of Delhi pronounced its verdict last week in Union of India v. Vodafone Group plc dismissing the Government’s petition challenging the Vodafone Group’s move to initiate two international arbitrations against India. The judgment of...
The Arbitration & Conciliation (Amendment) Bill, 2018: A Positive Step Forward for Institutional Arbitrations in India
[Utsav Mitra is a B.A., LL.B (Hons.) student at National Law Institute University, Bhopal] The Arbitration and Conciliation (Amendment) Bill, 2018(“Bill”), proposed to amend the Arbitration and Conciliation Act, 1996 (“Act”), was approved by the Cabinet of Ministers on 7 March 2018 to be introduced in the Parliament. This Bill seeks toencourage institutional arbitration...
Presenting a Critique of Green Financing in India
[Priya Garg is a 4th year student at the West Bengal National University of Juridical Sciences (WBNUJS)] The concept of “green banking” has two primary aspects – first, making banks and other financial institutions conduct their operations in an environment-friendly manner; second, their role of extending credit on favourable terms to eco-friendly projects. For the purpose of this post, I refer...
Front running – ill-conceived law and inequitable orders of SEBI
SEBI has passed an order on 8th May 2018 in a case of front running. On the face of it, there is nothing distinctive. The law relating to front running has seen ups and downs in the past, with even contradictory decisions of SAT, but the Supreme Court ([2017] 144 SCL 5 (SC)) largely settled the matter. Yet, this order raises and reminds of concerns that the law has not been thought through well...
India’s GAAR and the Multilateral Instrument: A Consideration for Foreign Portfolio Investors
[Aditi Khemani is a 4th Year student at Jindal Global Law School] Introduction Since the Union Budget of 2018-19, the India-Netherlands Double Taxation Avoidance Treaty (DTAA) has garnered attention. A major renegotiation of India’s treaties with Mauritius, Cyprus and Singapore last year saw a shift from the “residence rule” to the “source rule” of capital gains taxation. This eliminated the...
Binani Cements Insolvency: NCLT Triggers (Yet Another) Auction
The insolvency of Binani Cements has triggered a number of legal issues involving the Insolvency and Bankruptcy Code, 2016. One of those relates to the manner in which the resolution plan has to be approved and implemented, especially in the context where a number of plans have been proposed. In this case, the company entered the insolvency process, following which the committee of creditors...
Arbitrability of Oppression and Mismanagement – Rakesh Malhotra & After
[Deepanshi Ahlawat is a 5th year B.A., L.L.B. (Hons.) student at National Law School of India University in Bangalore. Earlier posts on the topic are available here, here and here] Introduction Oppression and mismanagement (“O&M”) disputes in India are governed by sections 241 & 242 of the Companies Act, 2013 (“2013 Act”) [analogous to sections 397, 398 & 402 of the Companies Act...
Of Harmony and Interference: Delhi High Court Sets Aside Award for Arbitrator’s Erroneous Interpretation of Contract
[Ritvik M. Kulkarni is an associate with Wadia Ghandy & Co., Mumbai. Views are strictly personal] In Altus Group India Pvt. Ltd. v. Darrameks Hotels and Developers Pvt. Ltd., the Delhi High Court has set aside an arbitral award (the Award) after finding folly in the arbitrator’s interpretation of the termination clause contained in a ‘Professional Service Agreement for the appointment of a...
Uber v. Waymo and Lessons for Trade Secret Protection for Companies
[Swrang Varma is a 4th Year BB.A. LL.B. (Hons.) student at the University School of Law & Legal Studies, Guru Gobind Singh Indraprastha University] Introduction More than a century has elapsed since the establishment of the theory of the separate juristic personality of a corporation. Be that as it may, a corporation still functions through human innovation. The unique competitive edge that...
Papers on Comparative Corporate Law and Governance in Asia
Hostile Takeover Regimes in Asia: A Comparative Approach, which I have co-authored with Wai Yee Wan. The abstract is as follows: “The market for corporate control (operating through hostile takeovers) acts as a key corporate governance mechanism to discipline corporate managers. However, the process and substance of regulating hostile takeovers differs remarkably among various jurisdictions...
The Silences of Section 26 of the Arbitration (Amendment) Act, 2015: Has the Supreme Court Answered?
[Anirudh Lekhi is an associate at a law firm in New Delhi, having graduated from National University of Juridical Sciences in 2017] The Arbitration and Conciliation (Amendment) Act, 2015 (Amendment) brought about several much awaited amendments to the Arbitration and Conciliation Act, 1996 (Act). However, section 26 of the Amendment, which delineates its temporal scope, has been the source of...
Home Buyers as Financial Creditors: Desperate Improvisation and its Ramifications
[Rishabh Sant Tiwari is a 4th year B.A. LL.B. (Business Law Honours) student at National Law University, Jodhpur, India] The recently released Report of the Insolvency Law Committee (“Committee Report”) has brought about seminal changes in the Insolvency and Bankruptcy Code, 2016 (“IBC”). The most remarkable highlight of the Committee Report is its recommendation to treat home buyers of under...
Exchange of Information under Double Taxation Avoidance Agreements
[Dheeresh Kumar Dwivedi is a lawyer at APJ SLG Law Offices New Delhi] With globalization, India has been entering into various double taxation avoidance agreements (“DTAAs”) with the countries across the globe. This is because of the inherent advantages that DTAAs provide insofar as avoidance of double taxation, facilitation of international trade and business, and curbing the menace of tax...
Being Facebook ‘friends’/’likes’ on each other’s photos deemed sufficient by SEBI to allege ‘connection’ for insider trading
In an earlier post, I had written about how being connected as ‘friends’ on Facebook was deemed by SEBI to be significant enough to allege that the parties were ‘connected’ for purposes of insider trading. In that case, however, there was other alleged connection too. SEBI has yet again examined Facebook profiles for to pass a similar interim order. It found that a businessman and his...
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