On September 14, 2010, the European Court of Justice (ECJ) issued its judgment in the case of Akzo Nobel and Akcros Chemicals on the question whether communication with in-house lawyers is protected by legal professional privilege. The case involved an investigation by European Commission authorities of possible anti-competitive practices wherein officials took copies of a number of documents...
Confidentiality = Non-compete?
In India, there is a fair amount of debate regarding the enforceability of non-compete agreements given Section 27 of the Contract Act that invalidates contracts in restraint of trade. Recent developments in California may throw some further light on the issue. Oracle’s appointment of former HP-CEO Mark Hurd has given rise to litigation by HP. This report in the Wall Street Journal notes that...
Nomination of Directors by Shareholders
Earlier this week, the U.S. Securities and Exchange Commission (SEC) adopted the much anticipated proxy access rule which allows shareholders to nominate candidates for directorship. The essence of the new rules is as follows: The new rules require companies to include the nominees of significant, long-term shareholders in their proxy materials, alongside the nominees of management. This...
The United States Supreme Court on the ‘Principal Place of Business’
Two earlier posts had discussed the issue and the oral arguments before the United States Supreme Court in Hertz Corp. v. Friend. Earlier this year, the Court delivered a unanimous verdict, holding that the ‘principal place of business’ of a corporation is its ‘nerve centre’, i.e. the headquarters of the corporation. As discussed earlier, the issue came before the Court as part of a class action...
Extra-Territoriality of U.S. Securities Laws
Given the robust nature of the class action mechanism in the U.S., it is hardly surprising that plaintiffs rush to initiate legal actions before the U.S. courts even in relation to foreign companies that have issued securities listed on non-U.S. stock exchanges. U.S. courts have been left to combat with what are known as “foreign-cubed” or “f-cubed” class action law suits, defined broadly as law...
Trends in Private Equity Investment Structures
1. A report in the Mint demonstrates the popularity of convertible instruments over plain-vanilla equity when it comes to investments by private equity firms. 2. A post on New York Times’ Deal Professor Blog discusses trends in contractual structures for private equity investments from a broader perspective in the wake of the financial crisis. Most of those structures, however, are in the context...
UK: Consultation Paper on Takeover Bids
While the SEBI Takeover Regulations in India are a subject-matter of detailed review, elsewhere in the U.K. there are proposals for amending certain aspects of the City Code on Takeovers and Mergers. These changes have been necessitated on account of the widespread debate that followed the takeover of Cadbury plc by Kraft Foods Inc. early this year. Towards that end, the Code Committee of the...
Encapsulating the Investor-State Dispute Settlement (ISDS) Regime of 2009
(The following post is contributed by Rohan Bagai, who is a corporate lawyer at one of the leading law firms in India. He holds a Master of Laws (LL.M.) degree from New York University School of Law (NYU), New York with a specialization in corporate laws) The American Society of International Law (ASIL) recently posted “The United Nations Conference on Trade and Development (UNCTAD) report on the...
Substance over Form in Taxation: The Recent English Approach
We have at several times on this blog discussed issues around the legality of tax avoidance. In debates around avoidance/evasion distinction, reference is often made to the classic English cases – Duke of Westminster, Ramsay, Furniss, Macniven and others. In this background, it might be useful to consider the latest approach of the English Courts to tax planning activities. The latest...
SEC’s Restrictions on Short Selling in Melting Scrip
(The following post has been contributed by Ravichandra S. Hegde of J. Sagar Associates) The Securities and Exchange Commission (“SEC”) in February 2010 has amended Rule 201 of the SHO Regulations[1] framed under the Securities Exchange Act of 1934 (“Act”) restricting abusive short sale in the falling scrip thereby retaining investor confidence. The amendment effected to Rule 201 is primarily...
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