TagContract Law

Liability of Personal Guarantors vis a vis their Rights under the IBC: A Legal Conundrum

[Pinak Parikh is an Associate at Singhi & Co, Ahmedabad, and is a B.A L.L.B (Corp Hons) graduate (2019) from the Institute of Law, Nirma University] In December 2019, ArcelorMittal India Private Limited (“AMIPL”) paid over Rs. 42,000 crores to the State Bank of India to complete the acquisition of Essar Steel India Private Limited (“Essar Steel”), in what has been one of the biggest...

Severability of Arbitration Clauses when the Underlying Agreement is Void Ab Initio

[Ankit Kapoor is a II Year, B.A. L.L.B (Hons.) student at the National Law School of India University, Bangalore] Earlier last year, in Samyak Projects Private Limited v. Ansal Housing & Construction, a single judge of the Delhi High Court invalidated an arbitration clause as the underlying agreement was void ab initio. This represents a departure from the general rule of severability of...

SEBI’s Denial of Relief to Pledgees in the Karvy Case

We had last month discussed the ex parte ad interim order passed by the Securities and Exchange Board of India (SEBI) wherein the regulator found that Karvy Stock Broking Limited (KSBL) had wrongfully pledged securities belonging to its clients to various lenders in exchange for funds borrowed. Since then, four lenders, (i) Bajaj Finance Limited, (ii) ICICI Bank Limited, (iii) HDFC Bank Limited...

Delhi High Court Upholds the Interests of Direct Sellers: A Ray of Hope?

[Deeksha Gabra is a chartered accountant and Shivam Gupta is a final-year law student at the Rajiv Gandhi National University of Law, Punjab] Direct selling (also known as network marketing or multi-level marketing), as the name suggests, refers to selling products directly to the consumer in a non-retail environment. The product moves from the manufacturer to a direct sales company, which are...

Computing Price Adjustment in Construction Contracts: The Limited Scope for Setting Aside an Arbitral Award

[Zacarias Kanjirath Joseph is a dispute resolution lawyer based in Bombay. He may be contacted at [email protected] The views expressed in this piece are personal] A division bench of the Supreme Court of India in its judgment dated 8 May 2019 in Ssangyong Engineering & Construction Co. Ltd. v. National Highways Authority of India set aside an award of an arbitral tribunal, which...

Claims in Quantum Meruit vis-à-vis Damages in Breach of Contract

[Pulkit Khare and Vaidehi Soni are 4th Year B.A., LL.B. (Hons.) students of the National University of Advanced Legal Studies, Kochi] The Supreme Court recently in Mahanagar Telephone Nigam Ltd. (MTNL) v. Tata Communications Ltd. raised a question whether quasi-contractual obligations can be imported into a contract which already stipulates a sum for its breach. The case was brought about to...

Double Claim by a Creditor

[Richa Saraf is a Legal Advisor at Vinod Kothari & Co.]  In Dr. Vishnu Kumar Agarwal v. Piramal Enterprises Ltd. (January 2019), the National Company Law Appellate Tribunal (NCLAT) held that multiple applications for initiation of corporate insolvency resolution process for the very same debt or claim is not permissible. Now, consider a situation where Company A (guarantor) has guaranteed the...

Corporate Insolvency and the Creditor-Guarantor Dilemma

[Akash Santosh Loya is a final year student of the 5-year B.A. LL.B. (Hons.) course at the National University of Advanced Legal Studies] Introduction There have been a number of decisions dealing with the rights of a creditor vis-à-vis guarantor under the Insolvency and Bankruptcy Code, 2016 (IBC). The adjudicating authorities have provided sufficient clarity on myriad issues ranging from...

Law of Best Efforts and Reasonable Efforts Obligations in Commercial Contracts

[Prabhakar Yadav is a third year B.A.LL.B. (Hons.) student at National Law School of India University, Bangalore] Introduction Commercial contracts impose absolute obligations on the parties to perform their part of the promise, the breach of which would result in contractual liabilities. However, in practice, the ability of the parties to deliver on their performance may be impacted due to...

Invocation of Unmatured Corporate Guarantee during Moratorium under Bankruptcy Law

[Himanshu Handa is an Associate with UKCA and Partners, a Law Firm in New Delhi] Introduction In Axis Bank Limited v Edu Smart Services Private Limited, the National Company Law Tribunal (“NCLT”), Delhi had rejected a plea from the financial creditor i.e. “Axis Bank” against the corporate guarantor i.e. Edu Smart in respect of its claim pertaining to a corporate guarantee in the insolvency...

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