[Rupam Dubey is a 2nd year B.A.LLB student and Hrithik Merchant a 4th year B.A.LLB student, both at the National Law School of India University Bangalore] The traditional essence of private equity was rooted in the strategy of acquiring companies for the purpose of selling them, while remaining detached from the day-to-day operations of the portfolio company. However, the landscape of modern...
UKSC on Parent’s Liability for Environmental Violations of Foreign Subsidiaries
[Raghav Harini N is a final year student at ILS Law College, Pune] In a recent landmark decision in Okpabi v Royal Dutch Shell Plc, the Supreme Court of United Kingdom (UK) has permitted a jurisdiction appeal against a UK-domiciled parent company for the environmental violations of its Nigerian subsidiary. This judgment makes a significant contribution to the fields of human rights, environmental...
Doctrine of ‘Reverse’ Piercing and the Jurisprudence of Indian Courts
[Debarshi Chakraborty is a 3rd year B.A., LL.B. student at National Law University Odisha.] The doctrine of ‘reverse’ piercing, although relatively new, is a controversial area of corporate law. This doctrine could be problematic given the situations where a body corporate has multiple shareholders. Conversely, there have been times even in relation to companies with one shareholder where it has...
Compulsory Amalgamation: the Bombay High Court on the FTIL-NSEL case
In 63 Moons Technologies Ltd. v. Union of India (and connected petitions), the Bombay High Court considered important questions of law going to the heart of Indian corporate law. The case involved a challenge to an order of the Central Government under s. 396 of the Companies Act, 1956. Purporting to act under s. 396, the Central Government had amalgamated the National Spot Exchange Ltd. (“NSEL”)...
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...
Applicability of the Doctrine of Corporate Veil to Societies
[Post by Munmi Phukon and Sagar Batra of Vinod Kothari & Company] Meaning of Corporation or Body Corporate Pursuant to Section 2(11) of the Companies Act, 2013 (CA, 2013), “body corporate” or “corporation” includes a company incorporated outside India, but does not include— (i) a co-operative society registered under any law relating to co-operative...
Arbitration Agreement and Piercing the Corporate Veil
When a company is a party to an agreement that is subject to arbitration, can the arbitration award be passed against a significant shareholder of such company? That would generally be possible only if either the shareholder has expressly or impliedly consented to be bound by the arbitration agreement, or if the corporate veil of the company can be pierced to impose liability on the shareholder...
Supreme Court on Piercing the Corporate Veil in Public Interest
Background The separate legal personality of a company is a feature that has made that business form the most popular by a mile. However, the separate legal personality is not sacrosanct and is subject to limitations, as courts use the legal tool of piercing the corporate veil to disregard the separation between the company as a legal entity on the one hand and its shareholders and directors on...
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