Under company law, shareholders (particularly the minority) can resort to various remedies prescribed thereunder, such as oppression, prejudice and mismanagement. While Indian company law has incorporated versions of shareholder remedies since the mid-20th century, the design of the remedies as they currently operate finds place in sections 241 and 242 of the Companies Act, 2013 (the “2013 Act”)...
Implications of the Amendments to the Specific Relief Act, 1963
[Grishma Shah is a student of Government Law College, Mumbai presently studying in the 3rd Year of the 3-year law course. Earlier posts on specific aspects of the topic covered by this post are available here and here] Introduction On December 15, 2017, the Union Cabinet approved the recommended changes to the Specific Relief Act, 1963 (“Act”) after 54 years, with a view to facilitating simple...
The Specific Relief (Amendment) Bill, 2018: Shattering the Supremacy of Damages
[Aayush Mitruka is a lawyer based in New Delhi. An earlier post on the topic is available here] In the wake of India’s poor ranking in terms of enforcing contracts and ease of doing business, the Government decided to amend the 54 year old Specific Relief Act, 1963 (the “Act”). As a result, the Government constituted a six-member expert committee to examine the Act and suggest necessary changes...
Effects of The Specific Relief (Amendment) Bill, 2017 on the Law of Remedies for Breach of Contract
[Radhika Indapurkar is a lawyer based in Mumbai] Section 10 of the Specific Relief Act, 1963 (the “Act”) provides the courts with a discretion to enforce specific performance of contracts (a) in which there exist no standards to ascertain the actual damage caused by non-performance of such contracts, or (b) wherein the act agreed to be done is such that monetary compensation for non-performance...
Revisiting Arbitrability of Claims of Oppression and Mismanagement: A Singapore Perspective
[Aishwarya Singh is a 4th year student at Jindal Global Law School] The Bombay High Court (HC) in the case of Rakesh Malhotra v. Rajinder Kumar Malhotra (2014) had held that oppression and mismanagement claims are not arbitrable because the arbitral tribunal does not have the power to grant all the statutory reliefs available in a minority oppression claim. On the other hand, the Singapore Court...
Proprietary Remedies in Indian Law
We had earlier considered the question of whether there exist proprietary remedies for breaches of directors’ duties. The question of whether a remedy is proprietary or personal makes a difference most importantly in the context of insolvency. If a remedy against the fiduciary is merely personal, the beneficiary will only be able to claim along with other unsecured creditors. If the remedy is...
Delhi High Court on Directors’ Duties and Derivative Actions
It is not very often that we witness cases in India relating to intrinsic company law issues such as breaches of directors’ duties and shareholder remedies through derivative actions. However, questions of directors’ duties have been brought to the fore following the Companies Act, 2013 as they have been codified in the legislation. Derivative action, however, still remains within the realm of...
Remedies against Directors’ Undue Gains: Personal or Proprietary?
What is the appropriate remedy against a director who makes secret profits? Should the remedy be merely a personal one, or should it be a proprietary one? This issue is one of great importance and several jurisdictions have been debating the issue for years now. The rules against conflict and profit are at the core of a director’s duties; and it is essential for a legal system to provide a...
Double Derivative Actions Revisited
In an earlier post, we had discussed the concept of multiple derivative actions, and the decision of the Hong Kong Court of Final Appeal in Waddington, which held that double derivative actions (shareholder of a holding company bringing a derivative action complaining of wrongs done to the subsidiary company) were maintainable. In the comments, it was pointed out that the Bombay High...
Rescission and Repudiatory Breach
When C and R enter into a contract which is breached by R, C can either claim specific performance of the contract, or elect for the breach to have discharged the contract and claim damages. However, in cases where the latter option is chosen, it has been recognized since Johnson v Agnew that the contract continues to remain valid until the date of the repudiatory breach and is discharged only...
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