[Jitesh Maheshwari is an associate at Mindspright Legal and Rakshita Poddar is a lawyer based in Mumbai] Introduction The Supreme Court of India in its recent landmark judgement of SEBI v. Rakhi Trading Pvt. Ltd., delivered by Justice Kurian and Justice Banumathi, has overruled several orders of the Securities Appellate Tribunal which had held that synchronised trades are illegal only when they...
Implications of Granting Infrastructure Status to the Logistics Sector
[Harini Sutaria is a final year student at ILS Law College, Pune] Introduction In a bid to boost the logistics sector in the country, the Government has granted it an infrastructure status. This grant of status is a positive move by the Government and is an acknowledgement of the growing dependency of the success of other industries on logistics. A notification was issued by the Department of...
Why SEBI is Failing at Regulating Insider Trading in India
[Bhavya Bhandari is currently pursuing an LLM. in Corporation Law at NYU School of Law. She can be reached at [email protected]. The Indian securities market regulator has been criticized in the last two decades for its failure to investigate and prosecute perpetrators of insider trading. Even when the perpetrators are caught and punished, the penalty is often so low that the regulations have lost...
Crossholding in Credit Rating Agencies: An Insight into the SEBI Consultation Paper
[Kashish Jain is a 4th year B.B.A L.L.B (Hons.) student at Jindal Global Law School in Sonipat, Haryana] A credit rating agency (CRA) is a service provider that assesses the creditworthiness of an entity (issuer) or a debt instrument (e.g., asset-backed securities). Typically, it expresses an opinion that is based on processing information and conducting research. CRAs seek to reduce the...
Market Dominance: The Inadequacy of Section 4 of the Competition Act, 2002
[Gokul Plaha is a 4th year B.A., LL.B. (Hons.) student at the National Law University, Delhi] Introduction Section 4 of the Competition Act, 2002 prohibits the abuse of a “dominant position” in the market but does not penalise “dominance” per se. This means that any firm or enterprise is well within its right to acquire a dominating position in the market, even by way of indulging in anti...
Assignment of Debts under the Insolvency and Bankruptcy Code
[Aayush Mitruka is a lawyer based in Delhi] Synergies Dooray Automotive, the first corporate entity to be resolved under the new Insolvency and Bankruptcy Code (Code) posed a few very interesting questions and highlighted some grey areas in Code. In the present post I intend to discuss one important issue that came up in the context of assignment of debts. To put things in perspective, the Code...
Latecomers in Liquidation – Entitlements and Penalties
[Sikha Bansal is an Associate at Vinod Kothari & Company and can be reached at [email protected]] The Insolvency and Bankruptcy Code (the “Code”) provides for corporate insolvency resolution in respect of corporate debtors, and then liquidation where the insolvency proceedings fail. In case of liquidation of insolvent entities, the competing stakeholders stake their claims on...
Analysis of the Strike-Off Provisions under the Companies Act, 2013
[Utsav Mitra is a 3rd year B.A. L.L.B student from The National Law Institute University, Bhopal] Strike Off is a method prescribed under sections 248-252 of the Companies Act, 2013 (the “Act”). These provisions have been notified by the Ministry of Corporate Affairs by way of a notification dated 26 December 2016. They provide an opportunity for defunct companies to get their names removed from...
Union Budget: Tax Policy Concerns for Capital Gains and Dividend Distribution on Mutual Funds
[Hardeep Singh Chawla is 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]] “The only difference between death and taxes is that death doesn’t get worse every time Congress meets” – Will Rogers Recently the Finance Minister tabled the Finance Bill, 2018 (‘Bill’)...
Supreme Court on Delay in Filing Appeal from Orders of the NCLT
[Maneck Mulla is the Proprietor of M Mulla Associates, Mumbai] In Bengal Chemists and Druggist Association Vs Kalyan Chowdhury, the Supreme Court discussed the provisions of section 421 of the Companies Act, 2013 (the Act) which provides for filing of an appeal from orders of the National Company Law Tribunal (NCLT) within a period of 45 days with a further grace period of 45 days, (i.e. 90...
Application of the Single Economic Entity Doctrine to Anticompetitive Agreements
[Oorvi Mehta is a III Year student of B.A. LL.B. (Hons.) at the NALSAR University of Law, Hyderabad] Section 3 of the Competition Act 2002 applies to cases of anti-competitive agreements between two or more enterprises. The usual route to examine an infringement of this provision was to determine firstly, whether there was an agreement between two or more enterprises, fulfilling which, secondly...
Resolving the Issues Arising from Emergency Arbitration
[Aanchal Jain is a 4th year B.A.L.L.B. (Hons.) student at Dr. Ram Manohar Lohiya National Law University, Lucknow, India] Introduction Foremost among the new developments in the field of arbitration stands the concept of emergency arbitration. Although emergency arbitration is a relatively new phenomenon, it has gained significant traction. This is reflected in both the number of institutional...
Impact of Assignment and Novation on Arbitration Agreements
[Kunal Kumar is 4th Year B.A., LL.B. student at National Law University, Jodhpur] Introduction In light of the judgment delivered by the Supreme Court in BALCO, Part I of the Indian Arbitration and Conciliation Act, 1996 (the “Act”) has no applicability to foreign-seated arbitration (except in case of agreements concluded prior to the judgment), and the parties shall be referred to arbitration...
Legality of Cryptocurrency in India
[Sannat Chandna is a 5th year B.A., LL.B. (Hons.) student at Amity Law School, Delhi] The year 2017 witnessed a tremendous growth in the stature and worth of cryptocurrencies. Such an increase has never earlier been witnessed in relation to trading in any currency or commodity of such a volatile nature. India’s finance minister, while presenting the budget 2018, expressly stated that the...
Briefing on Stakeholder Responsibility of Corporate Boards
The NSE Centre for Excellence in Corporate Governance (CECG) has issued its most recent quarterly briefing titled Stakeholder Responsibility of Corporate Boards, which has been authored by Mihir Naniwadekar and myself. The executive summary is as follows: – The interests of stakeholders (besides shareholders) have become quite prominent to necessitate their recognition by corporate boards;...
SEBI’s Order against PwC: A Questionable Approach towards Mens Rea
[Sanchit Varma is a 4th year BA.LL.B (Hons) student at NALSAR University of Law, Hyderabad] The nearly decade-old Satyam controversy has left a lasting impact on the Indian corporate sphere, raising dormant issues of corporate governance and the need for stricter regulatory control over listed entities. The fallout from the scam especially affected Satyam’s auditors, who were hauled up in equal...
Finance Bill 2018: Amendment to Securities Laws
[Sumit Agrawal is a regulatory lawyer and ex-SEBI official. Views are his own. Twitter: @sumit12agrawal] During his Budget Speech 2018, the Finance Minister spoke about amending the Securities and Exchange Board of India Act 1992 (“SEBI Act”), the Securities Contracts (Regulation) Act 1956 (“SCRA”), and the Depositories Act 1996, to streamline adjudication procedures and to provide for penalties...
The “May” and “Shall” Conundrum under the Insolvency and Bankruptcy Code
[Aayush Mitruka is a lawyer based in Delhi] The enactment of the Insolvency and Bankruptcy Code, 2016 (Code) was one of the most significant legal reforms in India in the recent past, aimed at solving the burgeoning problem of non-performing assets and bringing the insolvency law in tune with global standards. The Code incorporated recommendations made by various committees and went through a...
Incorporation of Arbitration Clause by Reference
[Anshuman Chowdhury is a 5th year BBA, LL.B.(Hons.) Student of National Law University Odisha] In a recent judgment in Inox Wind Ltd v Thermocables Ltd (“Inox Wind”) judgement, the Supreme Court held that “a general reference to a standard form of contract of one party will be enough for incorporation of arbitration clause”. This was apparently an expansion of the scope of reference for...
Press Note 1 of 2018: Revision of the FDI Regime
[Amitabh Robin Singh is a corporate lawyer practising in Mumbai] The Department of Industrial Policy and Promotion has issued Press Note 1 of 2018 dated January 23, 2018 (“PN 1”), which liberalizes the foreign direct investment (“FDI”) regime across various sectors. However, I would like to open this post by not discussing a particular sector, but with the language that concludes PN 1. There has...
A Curious Case of ‘Public Interest’ in Indian Corporate Law
[Abhijeet Singh Rawaley is a Bar Council of India Trust Scholar and a III Year B.A., LL.B. (Hons.) Candidate at NALSAR, Hyderabad With inputs from Shreenath A. Khemka, a King’s Law Scholar pursuing an LLM at the University of Cambridge] This post comments on section 396 of the [Indian] Companies Act, 1956 (carried forward as section 237 in the Companies Act, 2013). The comment critiques the...
Harmonization of Insider Trading Norms and the Companies Act
[Ankit Handa and Arunima Vijay are 3rd year (VI Semester) B.A., LL.B. (Hons.) students at National Law University in Jodhpur] The Companies Amendment Act 2017 (“CAA ‘17”) has been notified by the Ministry of Corporate Affairs (“MCA”) on 3 January 2018. One of the major aims of harmonisation with the Securities and Exchange Board of India Act 1992 (“SEBI Act”) and regulations made thereunder is...
NCLAT on Public Interest in an Amalgamation Scheme
[Jai Bajpai is a 3rd year student at School of Legal Studies, University of Petroleum and Energy Studies, Dehradun] Introduction The element of public interest in amalgamation schemes has remained a fairly unexplored territory in the Indian corporate law regime. In essence, an amalgamation scheme ought to be beneficial to each and every class of shareholders and creditors and also in public...
Interpretation of Essential Goods and Services under the Insolvency and Bankruptcy Code 2016
[Archis Choudhary is a 4th year B.A., LL.B. (Hons.) student at Hidayatullah National Law University in Raipur] Section 14(2) of the Insolvency and Bankruptcy Code 2016 (Code) restricts the termination of supply of essential goods or services to the corporate debtor during moratorium period. In the case of Innoventive Industries Limited v. ICICI Bank Limited (2017), the Supreme Court observed that...
Companies (Amendment) Act, 2017: Loans to Directors
[Utsav Mitra is a 3rd year, B.A. LLB Hons student at The National Law Institute University, Bhopal] The granting of loans to, and security and guarantees provided on behalf of, directors and other interested parties of the directors is governed by section 185 of the Companies Act, 2013. However, this is a widely criticised section, being too prohibitive in nature as compared to the corresponding...
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