The influence of the principle of ‘severability’ of arbitration agreements, some may think, has extended far beyond the core problem it was intended to deal with: allowing an arbitral Tribunal to determine the existence or validity of the contract that contains the arbitration clause. Nor is it necessarily confined to arbitration agreements: the underlying principle is that a defendant who denies...
The Date of Accrual of the Cause of Action in Negligence Claims
Under article 113 of Schedule I to the Limitation Act, 1963 (the residuary provision), a suit must be filed within three years of the date of the accrual of the “right to sue”. It is well-known that a court has no power to condone delay in the institution of a suit (as opposed to an appeal or application) and it is therefore important to be able to ascertain precisely when the cause of action...
The Enforceability of Guarantees in Contravention of Indian Foreign Exchange Law
The choice of a law to govern a contract and a court to resolve disputes arising out of it is—naturally—fundamental in many ways. One of these is that a defence otherwise available may be lost, if one law does not contain it and the conflicts rules of the forum lead to the application of that law in preference to the law that does. Another is that different jurisdictions take different views...
Supreme Court on Jurisdiction Clauses
A recent decision of the Supreme Court, Swastik Gases v. Indian Oil Corp. (Civil Appeal 5086 of 2013, decision dated July, 3, 2013), examines the position of Indian law dealing with exclusive jurisdiction clauses. The Court was concerned with a case where an agreement was executed in Kolkata, while all the other elements of the cause of action had taken place in Jaipur. The agreement...
Preparatory activities and the commencement of a partnership
Section 3 of the Partnership Act, 1932 defines a partnership as the relationship between “persons who have agreed to share the profit of a business carried on by all or any of them acting for all”. This formulation shows that mere agreement is not enough: there must be a business which is carried on. The English Act of 1890 defines a partnership as the relationship that subsists between persons...
Interpreting Reps and Warranties in M&A Deals
Although clauses such as representations and warranties have become quite ubiquitous in M&A transactions involving sale and purchase of assets, business or shares, there has hardly been any litigation in India involving the technicalities of such representations and warranties. The reps and warranties also constitute some of the major sticking points in negotiations that take up a substantial...
Agreements to Agree
As we have noted on this blog, the common law generally imposes no duty on a contracting party to negotiate in good faith. This is so even when parties ‘agree’ to agree, that is, purport to conclude a contract leaving certain (sometimes essential) terms to be agreed in the future. The House of Lords held in the well-known case of Walford v Miles [1992] AC 128 that such an agreement imposes no...
Competition Law Risks: Non-Compete Clauses in M&A Transactions – Part 2
[The following post is contributed by Soumya Hariharan, who is a Foreign Lawyer at Rodyk & Davidson LLP’s Corporate & Competition Law Practice in Singapore. Soumya obtained her BSL.LLB degree from ILS Law College and has an LL.M degree (Corporate & Financial Services Law) from the National University of Singapore. She can be reached at [email protected]. These views are...
Competition Law Risks: Non-Compete Clauses in M&A Transactions – Part 1
[The following post is contributed by Soumya Hariharan, who is a Foreign Lawyer in Rodyk & Davidson LLP’s Corporate and Competition Law Practice in Singapore. Soumya obtained her BSL.LL.B degree from ILS Law College and has an LL.M degree (Corporate & Financial Services Law) from the National University of Singapore. These views are personal. In this first part, Soumya provides a broad...
The Scope of the Jurisdiction to Grant Relief against a Penalty Clause
In Andrews v Australia and New Zealand Banking Group, the High Court of Australia has considered an important question of contract law: is the jurisdiction to grant relief against a penalty clause confined to a sanction triggered by an event that can be characterised as a breach of contract, or does it extend to a sanction triggered by other events? The Supreme Court of India had occasion to...
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