[The following guest post is contributed by Suprotik Das, a 5th year law student at the Jindal Global Law School, Sonepat, Haryana.] On April 11, 2017, the Delhi High Court rendered a judgement in the case of Cruz City 1 Mauritius Holdings v. Unitech Limited. As mentioned in this blog earlier, this case dealt with enforcement proceedings of a foreign arbitral award. Unitech Ltd. (the...
Antecedent Transactions: An Anomaly in the Insolvency and Bankruptcy Code, 2016
[The following post is contributed by Rahul Sibal, 3rd Year, and Deep Shah, 2nd Year, students of NALSAR, Hyderabad. They can be contacted at [email protected] and [email protected]. In this post, they analyze certain anomalies with respect to provisions concerning antecedent transactions under the recently enacted Insolvency and Bankruptcy Code, 2016.] The Insolvency and...
Legal Claims: The Convergence of Law and Accounting
[Guest post by Pramod Rao, General Counsel at Citibank India] Many aspects of law and the accounting world coincide and converge especially in commercial enterprises. These are of immense relevance to the enterprise, the general counsel, the chief financial officer, the external/statutory auditors and business units or to control or support functions of the enterprise. Among the aspects...
The Contents and Discontents of the National Civil Aviation Policy
[Guest post by Pratiek Sparsh Samantara, who is a 5th year BA, LLB (Hons) student at NALSAR Hyderabad] The National Civil Aviation Policy (NCAP) was released on 15 of June 2016 with a view to making travel by air more accessible, and the related infrastructure more efficient. This is the first time an integrated aviation policy has ever been released, and it was long overdue. It has been forecast...
Companies Act, 2013: Cross-Border Merger Provisions Notified
Under the previous Companies, Act, 1956 (sections 391-394) it was possible for a foreign company to merge with an Indian company, but an Indian company could not be merged with a foreign company. This was intended to ensure that the company that continues after the merger is an Indian company over which the Indian regulatory authorities continue to exercise control. This position was also...
The MCA’s Drive Against Non-Operative Companies
[Guest post by Dheeraj Kumar Sharma, who is an Associate at Vinod Kothari & Co.] Introduction The discussion on the existence of non-operative companies is garnering the attention of the corporate sector with special emphasis from various regulatory arms in addressing issues pertaining to such companies. The Government had clearly indicated that actions will be initiated against companies...
Ascertaining Legal Ramifications of Compensation Agreements- Part II (Statutory Approach)
[The following post, the second in a series, is contributed by Rahul Sibal, a third year student of NALSAR Hyderabad. In the series, he analyzes possible liabilities that may arise with respect to compensation agreements from different perspectives. He can be contacted at [email protected]. In this second post, he attempts to ascertain the liability of directors that have entered into...
Ascertaining Legal Ramifications of Compensation Agreements – Part I (Common Law Approach)
[The following post, the first in a series, is contributed by Rahul Sibal, a third year student of NALSAR Hyderabad. He analyzes possible liabilities that may arise with respect to compensation agreements from different perspectives. He can be contacted at [email protected]. In the following post, he attempts to ascertain the liability of directors, who have entered into compensation...
Calls for Socially Responsible Investing
The concept of socially responsible investing (SRI) suggests that investors would invest in companies that are acting in socially and environmentally responsible ways, and that such investors would exit from investments in businesses that do not comport with environmental, social and governance (ESG) criteria. Such investors maintain a balance between financial sustainability and social impact...
NCLT Ruling under Section 8 of the Insolvency and Bankruptcy Code, 2016
[Guest post by Shayonee Dasgupta, who is a project finance lawyer with a leading law firm in India] As the Insolvency and Bankruptcy Code, 2016 (IBC) is in the process of being implemented, the provisions relating to the initiation of insolvency resolution process by an operational creditor were recently examined by the Mumbai bench of the National Company Law Tribunal (NCLT) by way of an order...
Stewardship Code for Insurance Companies
Historically, the passivity of institutional investors in India has led to less than significant monitoring of managements and controlling shareholders of companies. However, as I had noted in an earlier paper, the Indian markets began witnessing greater levels of shareholder activism in more recent years. Among the regulatory efforts that have engendered activism, one relates to a 2010 circular...
Delhi High Court on Put Options and Guarantees under FEMA
The issue of whether put options, exits at assured returns and guarantee arrangements between Indian and foreign parties are enforceable under the provisions of the Foreign Exchange Management Act, 1999 (FEMA) has received much regulatory and judicial attention lately. The dispute between Tata Sons and NTT Docomo heard by the Delhi High Court was being watched very closely until the case was...
Supreme Court on Force Majeure Clauses in Power Purchase Agreements
[Other posts related to this topic are available here and here.] In 2013, we had discussed an order of the Central Electricity Regulatory Commission (CERC) in a matter involving Adani Power. The brief facts of the case, as discussed therein, are as follows: Adani Power had entered into separate PPAs with Gujarat Urja Vikas Nigam Limited and two Haryana utilities under which Adani Power had agreed...
The Supreme Court on the SAT’s jurisdiction over SEBI Circulars
[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] Last month, the Supreme Court of India (“SC“) in the case of National Securities Depository Limited v. Securities and Exchange Board of India ruled that the administrative and legislative orders made by the Securities and Exchange Board of India (“SEBI“) are not assailable before the...
Has SEBI Altered Its Position on the Question of “Control”?
The issue of what amounts to “control” for purposes of the SEBI Takeover Regulations has been a vexed one, and has eluded any form of resolution for nearly 15 years. In a paper titled “The Nature of the Market for Corporate Control in India”, I have sought to summarize the present position (footnotes omitted): Under Indian takeover regulation, it is possible to trigger the [mandatory bid rule...
SAT on Holding Period for Inter Se Promoter Transfers
Mandatory takeover offer requirements are subject to certain exemptions. One such exemption is when there is an inter se transfer of shares among promoters of a company, so long as certain conditions are satisfied. One such condition, stipulated in regulation 10(1)(a)(ii) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (the “Takeover Regulations”), is that the...
Incorrect Prefixes to Company Names
A longstanding misconception is finally sought to be rectified by the Bombay High Court in a Circular issued on 3 April 2017 (via LiveLaw), the extracts of which are as follows: IT IS OBSERVED by the Hon’ble Shri Justice G. S. Patel while hearing Chamber Summons No. 89 of 2017 in Execution Application (L) No. 198 of 2017 in Arbitration Case No. 1 of 2014, on 8th March, 2017, that for...
Finance Act Amendments to the SEBI Act and the SCRA: Parliament Settles the Roofit Question
[Guest post by Shashank Prabhakar, who is a lawyer with Finsec Law Advisors] The Finance Bill, 2017, which has been passed by both the houses of Parliament and which was assented to by the President of India on 3 April 2017, has amended certain provisions of the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Securities Contracts (Regulation) Act, 1956 (“SCRA”). The most...
MCA’s Notification for Enhanced Exemptions Under the Merger Control Regime
[Guest post by Varun Thakur, BA.LL.B fourth year student at National Law University, Jodhpur.] In a notification dated 27 March, 2017, the Central Government, exercising its powers under the Competition Act, 2002 (‘the Act’), has issued a notification containing certain clarifications for easing compliance under the merger control regime. These interpretations are aimed at ensuring the...
Supreme Court on Vicarious Liability of Corporate Officers
[Guest post by Rahul Bajaj, a final year law student at the University of Nagpur and a SpicyIP fellow] The issue of corporate criminal liability has always been a vexed one, raising as it does profound jurisprudential questions that go to the heart of the separate legal status enjoyed by companies. As Professor Varottil noted in his analysis of the Sunil Bharti Mittal judgment on this Blog that...
Debt Restructuring Through Scheme of Arrangement
I have posted a working paper titled “The Scheme of Arrangement as a Debt Restructuring Tool in India: Problems and Prospects” on SSRN, the abstract of which is as follows: The goal of this paper is to analyse the scheme of arrangement as a debt restructuring tool in India and the extent to which it has been utilised. It finds that the scheme has been used sparingly for debt restructuring in...
Can trustees contract out of fiduciary liabilities?
[The following post is contributed by Shreya Rao and Vakasha Sachdev at Rao Law Chambers] Trust law in India has not kept up with the times. The last few years have seen an increase in the incidence of sophisticated trust structures, particularly in the private wealth and fund industries. However, changes to the law governing trusts have substantially been introduced in ad hoc form by tax...
Supreme Court on DRT’s Jurisdiction for Small Debts
[Guest post by Yudhvir Dalal, 5th Year B.A.LL.B. (Hons.), The National University of Advanced Legal Studies (NUALS), Kochi.] The Supreme Court late last year in State Bank of Patiala v. Mukesh Jain[i] held that under section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’) a Debt Recovery Tribunal (‘DRT’) is entitled...
Hush of the Whistleblower
[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.] The ongoing controversy at one of India’s most celebrated companies, built on high standards of corporate governance, raises some interesting issues for consideration from a whistleblower perspective. It was earlier reported that the Indian...
SAT on Interest Payment Obligations under the SEBI Act
Readers may recall that the securities law were amended in 2013 in order to confer significant enforcement powers on SEBI. This was done initially by the Securities Laws (Amendment) Ordinance, 2013 that was promulgated with effect from 18 July 2013. The Ordinance had to be re-promulgated before the amendments finally took shape by way of the Securities Laws (Amendment) Act, 2014. Among the...
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