[Guest Post by Swastika Chakravarti, a 5th year law student at National Law University Odisha] The Indian judiciary created a unique mechanism for the enforcement of interim orders passed by an arbitral tribunal by holding that a party that does not comply with such orders can be held liable for contempt of court. The Supreme Court in the judgment of Alka Chandewar v. Shamshul Ishrar Khan (July...
Implied Exclusion or Express Exclusion of Section 9 (Interim measures): Post Amendment of Section 2(2)
[Guest post by RV Prabhat, who is a practising advocate before the Delhi High Court. He can be contacted at [email protected]] The question of applicability of the provisions of Part I of the Arbitration and Conciliation Act 1996 (hereinafter referred as 1996 Act) to the Foreign Seated Arbitrations has time and again come up before the Supreme Court of India (“Supreme Court”) and...
Conflicts and Gaps in Regulatory Aspects of Schemes of Arrangement
[Guest post by Purvi Khanna, a 4th year student at NALSAR University of Law, Hyderabad.] The Ministry of Corporate Affairs’ recent notifications formalise an overhaul in the procedure for Schemes of Arrangements (“SoA”). . This post attempts to shed light on certain commercial aspects, and the inconsistencies and overlaps in the provisions of the Companies Act 2013 (the “Act”), the...
Supreme Court’s Stay Order in the Jaypee Insolvency Case
It was only last week that the Insolvency and Bankruptcy Code, 2016 (the “Code”) and the insolvency proceedings initiated thereunder received a fillip from the Supreme Court in Innoventive Industries Limited v. ICICI Bank (discussed here). Within a matter of a few days, a contrary result emerged from the Supreme Court in Chitra Sharma v. Union of India which has struck a temporary blow to the...
SEBI’s Policy on Self-Trades
[Guest post by Jitesh Maheshwari, Associate at Mindspright Legal in Mumbai] Introduction Self-trades are trades executed on the stock market in which the same entity is both buyer and seller. These trades do not represent a real change in beneficial ownership of the security. Earlier, the position on self-trades was that they create artificial or fictitious volume in the market, and give a false...
The Tata Corporate Governance Episode: The ‘India-Specific’ Issues and Concerns
[Guest post by Priya Garg, a 4th year law-student at West Bengal National University of Juridical Sciences (WBNUJS)] Introduction The recent turf battle within the Tata Group is likely to become a subject matter of study for various disciplines, including the subject of corporate law and governance.[1] The Tata-Mistry dispute giving rise to corporate governance issues needs to be considered...
The Costs and Benefits of Creditor Control under Insolvency Law
[Guest post by Enakshi Jha, who is a graduate from NALSAR University of Law and is currently working at a corporate law firm in Mumbai] The principal benefit of a creditor controlled insolvency law is the efficiency it brings to the market and the advantages it holds for entrepreneurship. First, as a model spearheaded by the persons whose money is at stake (section 6 of the Insolvency and...
Supreme Court Affirms Creditor-Friendly Nature of Insolvency Law
Background The Supreme Court yesterday delivered its first substantive ruling under the Insolvency and Bankruptcy Code, 2016 (the “Code”) in Innoventive Industries Limited v. ICICI Bank. Incidentally, this relates to the first corporate insolvency case to be admitted by the National Company Law Tribunal (“NCLT”) after the Code came into effect in December 2016. The Supreme Court rejected a...
Supreme Court on Prosecuting a Company for Cheque Dishonour
The Supreme Court in N. Harihara Krishnan v. J. Thomas ruled yesterday on certain procedural aspects relating to the offence under section 138 of the Negotiable Instruments Act, 1881 (“NI Act”) of dishonour of a cheque issued by a company. It held that any failure to include the company as an accused in the complaint at the outset (i.e. within the limitation period) would be fatal to the...
Call For Papers: NLUD Student Law Journal, Volume 5
The NLUD Student Law Journal is National Law University, Delhi’s flagship journal. It is an annual student edited, peer-reviewed law journal, which seeks to provide a forum for engaging in discussions on varied issues of contemporary importance in domestic and international law and policy. The aim of the journal is to provide a platform for discussion of matters relating to crucial developments...
SEBI Informal Guidance on Profit Sharing Arrangements
Last year, the Securities and Exchange Board of India (“SEBI”) clamped down on upside sharing arrangements between promoters or senior management of listed companies on the one hand and private equity investors on the other. Accordingly, the securities regulator amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the “LODR Regulations”) to introduce regulation...
The ITAT Ruling in the NDTV Case: Some Thoughts and Questions
[Post by Shreya Rao] The ruling of the Delhi Income Tax Appellate Tribunal (ITAT) in the case of NDTV presents a poor picture of all actors. NDTV’s transactions fail to pass the smell test. The framing of the revenue’s position fails to convince you that NDTV’s smelly transactions should trigger a tax under law. The ruling itself is a 385-page tome written in the stream of consciousness style. It...
Applicability of the Limitation Act to Insolvency Proceedings
[Guest post by Ashish Virmani & Tanisha Khaitan, both lawyers based in New Delhi and graduates of National Law University Jodhpur] The National Company Law Appellate Tribunal (“NCLAT”) in a recent judgement dated 11 August, 2017 in Neelkanth Township vs. Urban Infrastructure held that the Limitation Act, 1963 is not applicable to proceedings under the Insolvency and Bankruptcy Code, 2016 (the...
Corporate Insolvency Resolution Process and Implications on Securities Laws: Recent Changes
[Guest post by Yogesh Chande, Partner, Shardul Amarchand Mangaldas. View of the author are personal] SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”) The newly inserted provision in regulation 10 of the Takeover Regulations, notified on 14 August 2017, exempts an acquisition pursuant to a resolution plan approved under section 31 of...
Supreme Court Settlement Orders in Insolvency Cases: Opening of Pandora’s Box?
[Guest post by Anupam Choudhary, who is an Associate at Agram Legal Consultants, a law firm based in Mumbai. The views and opinions expressed are those of the author and do not reflect the view of his firm nor do they constitute legal opinion.] The Supreme Court has recently, in two orders, allowed settlement to be recorded between the parties even when the insolvency application had already been...
An Analysis of the First Insolvency Resolution Scheme Under the Insolvency and Bankruptcy Code
[Guest post by Enakshi Jha, who is a graduate from NALSAR University of Law and is currently working at a corporate law firm in Mumbai] Factual Matrix In the present case, Synergies-Dooray Automotive Limited (“SDAL”) was the corporate debtor. Ms. Mamta Binani was appointed as the Resolution Professional and is the applicant in the present dispute and had filed an application against all the...
A Guide for Filing Form C by Flat Buyers in the Jaypee Infratech Insolvency Matter
[Guest post by Abhishek Dubey, a corporate lawyer based out of Delhi NCR. This document is merely a guidance for fellow flat buyers of Jaypee Wishtown and not legal advice. Flat buyers may consult their own legal counsel before taking any action. Views are personal. Some of the background to the legal issues arising in this post are available here.] Thousands of flat buyers stuck in the Jaypee...
Amendment Creates a Third Class of Creditor Under the Insolvency and Bankruptcy Code, 2016
[Guest post by Aayush Mitruka, a lawyer based in Delhi] The Insolvency and Bankruptcy Board of India (“IBBI”) on 16 August, 2017 amended the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and the Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) Regulations, 2017 and...
Winding-up under Section 271(a) of the Companies Act and its Impact on the Insolvency and Bankruptcy Code
[Guest post by Anirudh Gotety, who is a 4th year student pursuing B.B.A., LL.B. (Business Law Honours) at National Law University, Jodhpur] Before the introduction of the Insolvency and Bankruptcy Code, 2016 (the ‘Code’), the winding up of a company took place solely under the Companies Act, 1956 (the ‘1956 Act’). The 1956 Act allowed companies to be wound up voluntarily (Chapter III of Part...
Proprietary Remedies in Indian Law
We had earlier considered the question of whether there exist proprietary remedies for breaches of directors’ duties. The question of whether a remedy is proprietary or personal makes a difference most importantly in the context of insolvency. If a remedy against the fiduciary is merely personal, the beneficiary will only be able to claim along with other unsecured creditors. If the remedy is...
Object Clause under the Companies (Amendment) Bill: A Flip-Flop
[Guest post by Naman Kamdar, a 5th year BA LLB student at National Law University Odisha] The Companies (Amendment) Bill, 2017 was introduced in Parliament to usher in more changes to the recently amended Companies Act, 2013 (the “Act of 2013”). The Bill seeks to make substantial changes in the pattern of trade and commerce in the country by liberalizing the procedures and requirements for...
Additional Concerns Raised by TRF v. Energo
[Guest post by Agnish Aditya, who is a 4th Year B.B.A LL.B student at NLU Odisha] The Supreme Court ruling in TRF v Energo Engineering Projects (“Energo”) has been covered in this blog twice (here and here). Mr. Naniwadekar’s post gave an overview of the judgment and Amitav’s post raised pertinent concerns regarding the Court’s jurisdiction under Section 11 of the Arbitration and Conciliation...
McDonald’s Case: NCLT Decision on Oppression
[Guest post by Enakshi Jha, who is a graduate from NALSAR University of Law and is currently working at a corporate law firm in Mumbai] McDonalds India has recently been in the news for shutting down 43 of its 55 Delhi outlets. The bone of contention leading to this event is the ongoing dispute between Mr. Vikram Bakshi and McDonalds India Private Limited (“MIPL”). This case has clarified that...
SAT Rejects Appeals in the United Spirits Case
We had earlier this year discussed SEBI’s ad-interim ex parte order in the United Spirits Limited (USL) case by which several persons (including Mr. Vijay Mallya) were prohibited from buying, selling or otherwise dealing in any securities, with some of them being restrained from holding positions as directors or key managerial personnel of any listed company. Against this, some of the persons...
Analysis of the Material Adverse Change Clause in the Indian Context
[Guest post by Tushit Mishra, who is a Third Year Student at NALSAR University of Law] Introduction The economic viability of an agreement in securities transactions is subject to a wide range of factors, due to which agreements concerning mergers and acquisitions (M&A) are constantly under a cloud of uncertainty. The past realization of such uncertainty with regards to risk mitigation and...
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