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Call for Papers: The National Law School of India Review

[The following announcement is posted on behalf of the National Law School of India Review (NLSIR)] About NLSIR The National Law School of India Review (NLSIR) is now accepting submissions for its upcoming issue – Volume 30(1). The NLSIR is the flagship law review of the National Law School of India University, Bangalore, India. The NLSIR is a bi-annual, student edited, peer-reviewed law journal...

What Should the Insolvency and Bankruptcy Code for SMEs be Like?

[Guest post by Rishi A, who is a Legal Analyst at Spotdraft.com] The Insolvency and the Bankruptcy Code (“IBC”), 2016 was a much-needed legislation in India for hastening the process of bankruptcy filing and to provide for a framework that would incorporate globally recognised standards for both creditors as well as debtors. However, right from its inception, there has been some discussionabout...

SAT Affirms SEBI’s Power to Lift the Corporate Veil

In an order passed yesterday in Sahara Asset Management Company P. Ltd v. Securities and Exchange Board of India, the Securities Appellate Tribunal (“SAT”) considered an appeal from an order of the Securities and Exchange Board of India (“SEBI”) in which SEBI had found that Sahara India Financial Corporation Ltd. (“Sahara Sponsor”) is not a “fit and proper” person and hence the Sahara Mutual Fund...

Supreme Court on Settlement of Insolvency Proceedings

[Guest post by Aayush Mitruka, a lawyer based in Delhi] The Supreme Court in a decision this week in Lokhandwala Kataria Construction Limited v Nisus Finance And Investment Managers, LLP allowed a settlement by entering into consent terms by the parties after the insolvency proceedings under section 7 of the Insolvency and Bankruptcy Code, 2016 (the “Code”)  were admitted.  The Supreme...

Supreme Court on the Ineligibility to Nominate an Arbitrator: A Critique

[Guest post by Amitav Singh, 5th year student at the National University of Advanced Legal Studies (NUALS), Kochi] In the judgement of TRF Ltd. v. Energo Engineering Projects rendered earlier this month, the Supreme Court (“Court”) has decided that a person who was required by the contract to arbitrate (but for the ineligibility by the operation of law), also becomes ineligible to nominate some...

Update on Layering of Subsidiaries

[The following guest post is contributed by Siddharth Raja, Senior Partner & National Executive Director, Argus Partners, Solicitors & Advocates.  Monica Umesh and Divya Mirlay, Associates of the Firm, assisted in the preparation of the post.  Views are personal and do not reflect or incorporate the views or positions of the Firm. Comments are welcome.] This...

Companies (Amendment) Bill Resurrected in an Altered Shape

Readers will recall that early last year the Government introduced the Companies (Amendment) Bill, 2016 (the “Amendment Bill”) in Parliament. This was in response to the report of the Companies Law Committee (CLC) that sought to address some issues that arose in the implementation of the Companies Act, 2013 (the “Act”). The theme of the legislative effort and the recommendations of the CLC were...

Layering of Subsidiaries: The Phoenix Rises Again?

[The following guest post is contributed by Siddharth Raja, Senior Partner & National Executive Director, Argus Partners, Solicitors & Advocates.  Monica Umesh and Divya Mirlay, Associates of the Firm, assisted in the preparation of the “Note on Objections” referred to below.  Views are personal and do not reflect or incorporate the views or positions of the Firm. Comments are...

More on RBI’s Intervention in Matters of Corporate Insolvency

The Gujarat High Court judgment discussed in a post yesterday by a guest contributor, Saurav Roy, brings to the fore several tricky issues and questions relating to the extent to which the Reserve Bank of India (RBI) ought to be involved in matters relating to the resolution of corporate insolvency. While matters of insolvency are essentially within the purview of the National Company Law...

Gujarat High Court Rules on RBI’s Powers Relating to Corporate Insolvency

[Guest post by Saurav Roy, IV B.A.LL.B, ILS Law College, Pune.]  Introduction Last week, the Gujarat High Court ruled on some interesting issues under the Insolvency and Bankruptcy Code 2016 (“IB Code”) while adjudicating upon a writ petition filed by Essar Steel Ltd., (“Essar”) against the Reserve Bank of India’s (“RBI”) decision to initiate insolvency proceedings against Essar and 11 other...

Activism through Directors Elected by “Small Shareholders”

Recent news reports (here, here and here) have highlighted a shareholder proposal that has been initiated in preparation for the annual general meeting of Alembic Limited to be held on 28 July 2017. The shareholder in question is Unifi Capital Private Limited who is said (though not verified) to be holding 3% shares in Alembic. The proposal involves the election of a “small shareholder” director...

Insolvency & Bankruptcy Code: Arbitral Proceedings and Bona Fide Dispute

[Guest post by Puneet Dinesh, is a IV year student at the National Law University, Delhi. He can be reached at [email protected].] The Insolvency and Bankruptcy Code, 2016 (the ‘Code’) has given rise to some interesting legal questions. As previously discussed on this Blog (here and here), the interpretation of the term ‘dispute’ under section 5(6) of the Code has arisen multiple times...

Section 26 of the Arbitration and Conciliation (Amendment) Act 2015: A Case of Misinterpretation

[Guest post by Aishwarya Singh, IV Year B.A., LL.B. (Hons.), Jindal Global Law School] A recent post on this Blog had discussed the conundrum surrounding the applicability of the Arbitration and Conciliation (Amendment) Act, 2015 (“Amendment Act”). The post discussed the conflicting judgements of High Courts regarding the applicability of the amendment to applications filed under section 34 of...

Holding Period and Corporate Veil in a Takeover Offer

[Guest post by Vaneesa Agrawal, who is Partner, Suvan Law Advisors. She can be reached at [email protected].] Last week Supreme Court of India issued a significant judgement in the matter of Laurel Energetics Pvt. Ltd. v. SEBI, Civil Appeal No. 5675 of 2017 on the issue of the interpretation of Regulation 10 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011...

Reprimand or Warning Orders by NCLT

[Guest post by Rohit Sharma, Executive at Vinod Kothari & Co.] Background UW International Training & Education Centre for Health Private Limited voluntarily filed an application before the National Company Law Tribunal (‘NCLT’) with respect to a matter pertaining to section 56(2)(a) of the Companies Act, 2013 (the ‘Act’) for transfer and transmission of securities. In this regard...

Supreme Court on Hardship vis-à-vis Frustration and Force Majeure

[This is a guest post contributed by Rishabh Raheja, a third year student at NALSAR University of Law, Hyderabad.] The Supreme Court was presented with the perfect opportunity to clarify the relationship between frustration, force majeure and hardship or commercial impracticability in its decision in Energy Watchdog v. Central Electricity Regulatory Authority. While it has already been...

Bombay High Court on the Permissibility of Shareholder Representative Suits

Bar & Bench yesterday reported that the Bombay High Court denied leave to certain shareholders of various Tata group companies to bring a representative suit that made certain legal claims in the aftermath of the ouster of Mr. Cyrus Mistry from the board of Tata Sons as well as other Tata group companies. The order of the court in Pramod Premchand Shah v. Rata Tata is now available. Facts and...

A Misturning on section 12(5) of the Arbitration Act?

A few days ago we had highlighted a decision of the Bombay High Court in DBM Geotechnics v. BPCL where the High Court had drawn a distinction between the power to nominate an arbitrator and the choice of the nominee. The arbitration clause allowed an employee of a company to nominate another employee as an arbitrator. The Court held that the power to nominate continued to remain valid even if...

Non-Disposal Undertaking and its Reporting in the Indian Securities Market

[Guest post by Divyajyot Verma, a student at the Jindal Global Law School] Non-Disposal Undertakings (or agreements) (“NDUs”) are signed usually by the debtor in favour of the lender in relation to any loan obligation undertaken by the debtor. An NDU helps in ensuring that the debtor does not transfer the shares held by it in a company by way of outside arrangements such that the creditor is left...

Guest Post: The McDermott Perplexity – the Scope of Interference under Section 34 of the Arbitration Act

       [Guest post by Gursharan H Virk, who is an advocate practising in the Gujarat High Court.                    Views expressed are the author’s own.] There is a cleavage of opinion amongst various High Courts in relation to the scope and ambit of interference with an arbitral award under section 34 of the Arbitration...

Minimizing the Liability of Directors: SEBI’s Order in the Zylog Case

[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Liability of directors is a sensitive topic in India, particularly for foreign investors who propose to nominate directors to the boards of their Indian investee companies. That is why clauses are inserted in shareholders’ agreements to the effect that the investor’s nominee director will not be identified...

Consolidation of Promoter Holdings: Exemptions from Takeover Offer

The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”) provide for a series of exemptions involving consolidation of promoter shareholdings whereby acquirers of shares in such consolidation efforts need not make a mandatory takeover offer to acquire the shares of the remaining shareholders. Apart from specific promoter-oriented exemptions...

The amended Arbitration Act: The Power to Nominate and the Choice of the Nominee

The Bombay High Court in DBM Geotechnics v. Bharat Petroleum Corporation Ltd. recently decided a short but important point arising out of the recent Amendments to the Arbitration & Conciliation Act, 1996. In particular, the Court had to consider how the bar on a party’s employees serving as arbitrators had to be construed. The relevant arbitration clause between the parties...

Promoter Exits in India: Reined by the Market Watchdog?

[Guest post by Malek Shipchandler, who practices law with a firm in Mumbai. Views are personal and do not necessarily represent those of the firm.] It was reported last week that the Securities and Exchange Board of India (SEBI) is likely to relax rules pertaining to promoter reclassification in listed companies. An article co-authored by Gaurav Malhotra and I for the Oxford Business Law Blog in...

Frustration in Indian Law

On this blog, we had previously looked at the judgment of the Supreme Court of India in Energy Watchdog v. CERC and connected appeals. An earlier post had examined the decision, and had concluded that the Court “arguably misstated the law when it found that the mere existence of a force majeure clause would prevent the parties from bringing an alternative claim under section 56….” The...

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