[Anshita Dave and Abhyudaya Yadav are 5th year B.A., LL.B. (Hons.) students at Dharmashastra National Law University, Jabalpur] Recently, the Supreme Court in IFB Agro Industries Limited v. SICGIL India Limited held that the National Company Law Tribunal (“NCLT”) cannot exercise its rectificatory jurisdiction under section 59 of the Companies Act, 2013 (“the Act”) to...
The Singapore Court of Appeal on Arbitrability and the Proper Law of Arbitration Agreements
In its recent judgment Mittal v Westbridge Ventures, the Singapore Court of Appeal has considered a number of important questions of arbitration law concerning the proper law of arbitration agreements and the identification of the law which determines whether a particular dispute is arbitrable. The case is likely to be of particular interest to Indian practitioners because it illustrates why in...
IFSCA Report on the Design of Variable Capital Companies
The choice of business form available in any jurisdiction is critical to the establishment of a vibrant fund industry. While several markets have historically relied on organisational structures such as the limited partnership, the age-old private trust formulation has constituted the mainstay of the fund industry in India. Most fund structures (including mutual funds and alternative investment...
SAT on the Non-Liability of a Company Secretary for Incorrect Disclosures
On 1 November 2022, the Securities Appellate Tribunal (SAT) in V. Shankar v. Securities and Exchange Board of India exonerated the company secretary of Deccan Chronicle Holdings Limited (DCHL) from liability for certain misstatements and incorrect disclosures made by the company. Background and Decision The Securities and Exchange Board of India (SEBI) had conducted investigation for certain...
Enforcement of Security Interest Against Borrower is Non-Arbitrable
[Suradhish Vats is an Associate at OliveLaw] In the recent case of Bell Finvest India Limited v. AU Small Finance Bank Limited, the Delhi High Court had the opportunity to resolve and clarify the position concerning section 11 of the Arbitration and Conciliation Act, 1996 (‘A&C Act’) and section 11 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security...
Enhanced Minimum Amount of Default under IBC – Retrospective or Prospective?
[Ashwin Bala Someshwerar is an LL.M. Student at TNNLU, Tiruchirappalli, Tamil Nadu.] The Ministry of Corporate Affairs (MCA) issued a notification on 24 March 2020 (hereafter, ‘the notification’) enhancing the minimum amount of default under the proviso to section 4 of the Insolvency and Bankruptcy Code, 2016 (IBC) from one lakh rupees to one crore rupees. The notification does not mention the...
NCLAT Clarifies the Degree of Intervention in a Scheme of Reduction of Capital
[Aastha Bhandari is a fourth-year student at Jindal Global Law School] On 28 July, 2022 the National Company Law Appellate Tribunal (“NCLAT”) passed its judgement in Precious Energy Services Limited v. Regional Director, holding that the negative financials of a company vis-à-vis its net worth and book value per share do not hold any relevance in determining whether the company possesses...
Cox and Kings Judgment: Revisiting the Group of Companies Doctrine
[Natasha Matange and Dharmvir Brahmbhatt are 4th and 5th year students at Gujarat National Law University, Gandhinagar] Arbitration has been growing as a method of dispute resolution in recent years both in India and abroad. It is more formal than mediation, yet has certain procedural similarities to litigation. The essence of arbitration is rightly considered to be consent. It is recognised by...
Analyzing the Business Judgement Doctrine in the Indian Context
[Dhvani Shah is a penultimate year student at Gujarat National Law University] In January 2022, the Rajasthan High Court stayed trial court proceedings against Mr. Pratip Chaudhuri, ex-SBI Chairman, for an alleged bank loan scam. Mr. Chaudhuri was arbitrarily arrested for discrepancy in the sale of a non-performing asset (NPA) of the bank, i.e., the “Garh Rajwada hotel” to the Alchemist Asset...
Ratification of Director’s Breach of Duty: Opportunity to Evade Liability?
[Arjun Tyagi is a fourth year B.A., LL.B. (Hons.) student at National Law University Odisha.] Directors of companies owe fiduciary and ‘statutory’ (section 166 of the Companies Act 2013) duties to the company, its employees and the shareholders. Common law principles provide ratification of breach of duty by directors, if the shareholders pass a resolution agreeing to absolve directors from...
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