We have discussed the judgment of the Supreme Court in Swastik Gases on the construction of jurisdiction clauses. Its conclusion there is no rule of law that a clause cannot confer exclusive jurisdiction unless it uses words of exclusion (“only”, “exclusive” etc) is plainly correct. But this gives rise to a further question: how should the courts actually decide whether a particular clause does...
Breach of Representations and Warranties in M&A: A Buyer’s Guide
[The following guest post is contributed by Goda A. Raghavan and Kirthi Srinivas G, who are advocates with HSB Partners, Chennai and can be contacted at [email protected] and [email protected] respectively. Views are personal and do not represent the views of the firm.] Purchase price in a mergers and acquisitions (M&A) transaction is normally fixed after factoring the risks and...
The Supreme Court on Penalties and Liquidated Damages
In its recent judgment in Kailash Nath Associates v DDA, the Supreme Court has considered some important questions relating to section 74 of the Indian Contract Act 1872. As its conclusions appear to depart from some well-known principles of contract law, the case warrants close attention. Section 74, of course, provides that the claimant in a breach of contract case is entitled to ‘reasonable...
A Novel Exception to Privity of Contract?
(The following guest post is contributed by Shivprasad Swaminathan, who is Associate Professor at the Jindal Global Law School) The Delhi High Court’s judgment Utair Aviation v Jagson Airlines formulates a novel ‘conduct, acknowledgement and admission’ exception to privity of contract. This post argues that neither is the exception doctrinally warranted, nor its invocation in the case...
2nd GNLU – ONGC International Essay Competition on International Contracts
[The following announcement is posted on behalf of the Gujarat National Law University (GNLU)] The 2nd edition of the GNLU – ONGC International Essay Competition on International Contracts is being organized for the year 2015 on the theme “Identifying and Comparing the trends in International Contract Laws and Probing the Critical Issues for Multinational Contracting Parties”. The essay...
Notice Clause: “On or as soon as reasonably practicable”
Although it is customary to use various expressions in modern commercial agreements, very few such agreements have been the subject matter of interpretation before Indian courts. Hence, it is essential to draw inspiration from jurisprudence being developed elsewhere. One such development relates to a decision rendered by the English High Court in December 2014 in Goldman Sachs International v...
The Bombay High Court on Implied Exclusion
The Bombay High Court has recently given an important judgment in Harkirat Singh v Rabobank. It has revisited the law on the implied exclusion of Part I of the Indian Arbitration and Conciliation Act, 1996, which we have considered this on a number of occasions on this Blog. The point remains of great practical importance even though Bhatia International has been overruled because it is a live...
The Bombay High Court on Mutual Mistake, Damages and Restitution
In Rolta v MIDC, the Bombay High Court has recently considered some important questions relating to the doctrine of mutual mistake, damages for breach of contract and restitution. It is worth examining the judgment closely as it appears to depart from some well-established principles of contract law. The case arose out of a Memorandum of Understanding (‘MoU’) which Rolta and MIDC entered into in...
Delaware Court Ruling on Deal Conditions in the Apollo-Cooper Merger
A recent Delaware court ruling deals with matters involving the “unraveling of the Agreement and Plan of Merger (the “Merger Agreement”) by which a large Indian tire manunfacturer—[Apollo]—was to buy a large American tire company—Cooper Tire & Rubber Company (“Cooper”).” Billed as among the largest overseas acquisitions by an Indian company, Apollo was to acquire all the shares of Cooper...
Revisiting penalty clauses in contract
Last year, the English Court of Appeal in Talal El Makdessi v Cavendish Square Holdings [2013] EWCA Civ 1539 considered the enforceability of penalty clauses under English contract law, and was one of the few decisions in recent times to have concluded that the clauses in question were penal and therefore unenforceable. The decision was notable for affirming that the English law rule against the...
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