TagFraud

Vidya Drolia Case: Final Chapter in the Arbitrability of Fraud Saga?

[Sumit Chatterjee and Rajashri Seal are students at the National Law School of India University, Bangalore] On 14 December 2020, the Indian Supreme Court delivered its judgement in Vidya Drolia v. Durga Trading Corporation (‘Vidya Drolia’), addressing a host of issues pertaining to the domestic arbitration framework in India. By laying down a definitive checklist to determine whether a particular...

Arbitrability of Fraud and the ‘Public Flavour’ Standard

[Karan Kamath is a 2020 B.A. LL.B. (Hons.) graduate from Symbiosis Law School, Pune.] On August 19, 2020, a Division Bench of the Supreme Court decided Avitel Post Studioz Ltd. v. HSBC PI Holdings (Mauritius) Ltd., wherein the central question related to arbitrability of fraud, in an appeal arising out of the Bombay High Court’s decision in a petition under section 9 of the Arbitration and...

Circumstances where Resolution Process can be Declared Void after Initiation

[Shreya Routh is an Executive at Vinod Kothari & Company] Gains through unjust fraud are never secured. The same goes for a company against which a process of corporate insolvency has been initiated. If the sole intent for initiation of a case is to defraud the creditors, there can be no possibility of revival of the company. The Insolvency and Bankruptcy Code, 2016 (the “Code”) comes with...

Arbitrability of Fraud: Is Every Fraud Arbitrable?

[The following guest post is contributed by Bhushan Shah & Jogan Punjabi from Mansukhlal Hiralal & Company. The views expressed in the post are personal] Arbitrability of fraud has been a highly contested issue in the field of alternative dispute resolution. The Supreme Court in N Radhakrishnan v Maestro Engineers and Ors  (“Radhakrishnan Case“) held that cases where...

Changes in the Fraud Reporting Mechanism Under the Companies (Amendment) Act, 2015

[The following guest post is contributed by Suprotik Das, a 4th year law student at the Jindal Global Law School, Sonepat, Haryana.] The Companies (Amendment) Act, 2015 is a harbinger of positive trends in the ease of doing business for Indian companies. This post is specifically with regard to Section 143 of the Companies Act, 2013 concerning the power and duties of auditors and its...

Guest Post: Corporate Law Reforms and Whistleblowing

[The following post is contributed by Suprotik Das, a 3rd year law student at the Jindal Global Law School, Sonepat, Haryana] Last year, with the advent of the Companies Act, 2013 (the Act), the thrust has been toward fraud protection and having an effective corporate vigil mechanism. Companies in India are now required to have an appropriate whistle blower protection policy in place. In this...

SEBI Order in the Satyam Case

Facts and Sanctions Yesterday, more than five years after the Satyam ex-chairman’s much talked about revelations, SEBI passed an order in the case against five individuals, being the ex-chairman, ex-managing director, ex-Chief Financial Officer, ex-Vice President Finance and ex-Head (Internal Audit). In the 65-page order, SEBI considers the various acts of these individuals in detail that include...

SEBI penalises front-running again, does not follow SAT’s order

There is yet another Order of SEBI on front running and SEBI holds that transactions in the nature of front running are violative of the PFUTP Regulations. This is close after SAT’s recent ruling (“the Patel Order”) holding that front running cannot be punished, as discussed by me here, and another later ruling by SAT (“the Karkera Order”) as discussed by Mr. V. Umakanth here. By an Order dated...

An Instance of Accounting Fraud

The New York Times analyzes an instance of possible accounting fraud at a Chinese company, Longtop Financial Technologies that has close similarities with India’s own Satyam scandal (i.e. improper confirmation of bank balances). While the Satyam scandal came into the public domain through a confession letter of the Chairman, in this case the auditor blew the whistle. Here is an extract: Deloitte...

Fraud and the amendment of a section 34 application

In an important fallout of the Satyam controversy, the Supreme Court, earlier this month, reiterated the law on the amendment of section 34 applications, and also clarified the kinds of fraud that would justify the setting aside of arbitral awards on grounds of public policy. After the fraud perpetrated Mr. Raju, Venture Global sought to amend its section 34 and bring the facts about the...

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