[The following post is contributed by Supreme Waskar, who is a corporate lawyer in Mumbai] The Securities and Exchange Board of India (“SEBI”) has, by way of its order passed on July 28, 2017 (“Recent Order”), reversed its earlier view and held that the disclosure obligation under regulation 8(2) of the erstwhile takeover norms, i.e., Securities and Exchange Board of India (Substantial...
Call for Submissions: NLUJ Law Review
[The following is an announcement from National Law University, Jodhpur] About the Review The NLUJ Law Review is the flagship journal of National Law University, Jodhpur, established with the objective of promoting academic research and fostering debate on contemporary legal issues in India. It is a bi-annual, double-blind student reviewed and edited journal focusing on an inter-disciplinary...
SAT Order on “Shell” Companies
The issue of “shell” companies has captured the attention of the regulators over the last couple of years. There is a pervading sense of regulatory fear that, left unchecked, shell companies may be utilized for various illegal purposes, including money laundering. The Government has been taking steps at various levels to deal with what it visualizes as a menace of shell companies. One instance...
Arbitrability of Oppression and Mismanagement in India
[Guest post by Aishwarya Singh, 5th year student at Jindal Global Law School] Background Sections 241 and 242 of the Companies Act, 2013 (“CA, 2013”) provide the National Company Law Tribunal (“NCLT”) the present day authority to deal with the petitions pertaining to oppression and mismanagement. Under the previous Companies Act, 1956 (“CA, 1956”), this power was exercised by the Company Law...
Report on Regulation of Credit Rating Agencies in India
[Guest post by Shreya Prakash, who is a Research Fellow in the Corporate Law & Financial Regulation vertical at the Vidhi Centre for Legal Policy] Credit ratings are an opinion of a recognised entity on the relative creditworthiness of a debt instrument. Entities that form these opinions, i.e., credit rating agencies (‘CRAs’), are essential gatekeepers of the financial system. In fact...
Some Open Questions under the IBC: Debt Restructuring Schemes and Prepacks
[The following is a guest post contributed by Aparna Ravi, who is Counsel at Samvad Partners. The views expressed here are personal and comments are welcome.] In the high-profile insolvency case of Essar Steels Ltd., that was admitted by the Ahmedabad Bench of the National Company Law Tribunal (“NCLT”) last week, two objections raised by Essar against admission of the insolvency application were...
‘Antecedent’ Provisions in the Insolvency and Bankruptcy Code, 2016: An Improvement on its UK Counterpart?
[The following post is contributed by Deep Shah, 3rd Year and Rahul Sibal, 4th Year , students of NALSAR, Hyderabad. They can be contacted at [email protected] and [email protected]. In this post, they undertake a comparative analysis of provisions concerning antecedent transactions under the recently enacted Insolvency and Bankruptcy Code, 2016, vis-à-vis the Insolvency Act, 1986 of...
We’ve Moved! Launch of Our New Website
We are pleased to announce the launch of our new website: , which is now live. This is intended to improve the experience of readers. Do explore the navigation button on the top right hand side for more content. Given the tremendous increase in guest contributions, we will shortly be devising a Submissions Policy, which will be available on the website. I would like to thank all our contributors...
The Companies Amendment Bill, 2017: Proposed Changes to Section 185
[Guest post by Amitabh Robin Singh, who is a corporate lawyer practising in Mumbai] With the Companies Amendment Bill, 2017 (“Amendment“) being passed by the Lok Sabha and sent to the Rajya Sabha, it would be pertinent to discuss one of the major changes proposed by the Amendment. The Amendment proposes to completely replace Section 185 of the Companies Act, 2013 (“2013...
SEBI Requires Disclosure of Loan Defaults
Over the last couple of years, there has been a steady regulatory move to create some connections between the banking system and the capital markets in order to address cases of loan defaults by companies, especially those listed on the stock exchanges. Take the case of wilful defaulters, who are effectively now kept out of the capital markets (as discussed here on this Blog). Another mechanism...
NCLT Order Admitting Essar Steel Insolvency
In one of the first high profile cases under the Insolvency and Bankruptcy Code, 2016 (the “Code”), the Ahmedabad Bench of the National Company Law Tribunal (“NCLT”) yesterday issued its order admitting the insolvency petition brought by the State Bank of India (“SBI”) and Standard Chartered Bank (“SCB”) as financial creditors of Essar Steel Limited. The insolvency of Essar Steel had earlier...
Supreme Court’s Centrotrade Judgement: An Uncertain Celebration?
[Guest post by Shashank Chaddha, IV Year | B.A.LL.B (Hons.) student at the National Law Institute University, Bhopal] Last year, with the Supreme Court of India upholding the validity of a two-tier arbitration clause in Centrotrade Minerals & Metal Inc. v. Hindustan Copper Ltd., 2017 (2) SCC 228 (the ‘Centrotrade’), there has been much celebration about India’s recent ‘pro-arbitration’ stance...
Call for Papers: Indian Competition Law Review
[The following announcement is posted on behalf of the Indian Competition Law Review] The Indian Competition Law Review (“ICLR”) is the flagship annual journal of the Centre for Competition Law & Policy (CCLP), published under the aegis of National Law University Jodhpur, (India). ICLR strives to achieve scholarly excellence with the aid of an eminent advisory board and an institution known...
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...
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