In its recent judgment in BNP Paribas v UB Holdings, a Division Bench of the Karnataka High Court has considered an important question of insolvency law. The case has been widely reported in the press, of course, for it set aside a sale of shares to Diageo and made some observations about parallel transactions. But it is important to note that all of the High Court’s comments on the merits of the...
Damodaran Committee Report: Impact on Impulsive Law Making
[In yesterday’s post, we had briefly discussed the publication of the Damodaran Committee on Reforming the Regulatory Environment for Doing Business in India, and its broad impact. In this post, Nidhi Bothra at Vinod Kothari & Co discusses the report in greater detail. Nidhi can be contacted at [email protected]] The Damodaran Committee was set up by the Ministry of Corporate Affairs to...
A Review and Analysis of the CDR Mechanism
The out-of-court approach for corporate debt restructuring (CDR) was instituted by the Reserve Bank of India (RBI) over a decade ago. While it has been successful in several cases, there have also been significant shortcomings with the CDR mechanism. In a recent speech, a Deputy Governor of the RBI undertakes a review of the CDR mechanism. A number of issues are examined in the speech, including...
Substance vs. Form Conflict in True Sale | Hong Kong Court Goes by the Language Used by the Parties
(The following post is contributed by Soma Bagaria, who is a Legal Advisor at Vinod Kothari & Company in Kolkata. She can be reached at [email protected]) In every assignment transaction, there has been a constant conflict of whether the substance or form shall dominate while determining the nature of a transaction. There are two schools of thought on this: one which gives dominance to...
The Romalpa Clause and Bankruptcy Protection
To a supplier or, more generally, to any commercial entity involved in the initial stages of a supply chain, protecting itself in the event of the bankruptcy or change in constitution of its principal buyers is a matter of great importance. It is therefore commonplace to find clauses in a contract creating, for example, a unilateral right to terminate in the event of change of control. Similarly...
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