By Sinhani Prem, Student at Jindal Global Law School, and Sukriti Bhagat, Associate at IndusLaw
With an objective of aligning and addressing the on-going issue of promoter/promoter group and requirements in an IPO, Securities and Exchange Board of India’s (SEBI) floated a new consultation paper dated 11 May 2021 and proposed four main changes— (1) Reduction in IPO lock-in periods, (2) Definition of the term ‘promoter group’, (3) Streamlining disclosure requirements of ‘group companies’ under the SEBI Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018, (4) replacing the term ‘promoter’ with ‘person in control’. While the replacement of the term ‘promoter’ with ‘persons in control’ seems to receive extensive scrutiny on account of the fundamental implications it may have on boilerplate corporate law principles in the one-tier structure of corporate governance in India, we believe it is also important to delve into the three other proposals within this consultation paper.
Continue reading “SEBI’s Consultation Paper: Streamlining ‘Promoters’ and ‘Promoter Group’ Definition”
By Khyati Tuli and Daksh Mehta, Students at Amity Law School, Delhi
Insolvency and International Commercial Arbitration (“ICA”) are two parallel regimes which tend to converge at various instances. The tribunals, across the world have taken different approaches in relation to continuance of ICA when a parallel insolvency proceeding has commenced in the native state of the entity.
Continue reading “Insolvency and International Commercial Arbitration: Two Distinct Approaches”
By Ashish Kumar and Trishit Kumar Satpati, Students at NMIMS School of Law, Bangalore
The apex court in the case of Government of India vs M/s Borse Brothers Engineers & Contractors Pvt Ltd (“Borse”) held that the delay in the filing of an appeal under section 37 of the Arbitration and Conciliation Act,1996 (“Act”) can be condoned if a sufficient cause is being provided. The earlier limitation of 120 days for filing an appeal was overruled but if a party exceeds the 90 days, then it must give sufficient reasons for such delay in accordance with section 5 of the Limitation Act(“LA”).
Continue reading “Condonation of Delay under Arbitration and Conciliation Act and Commercial Courts Act”
By Mr. Nishant Shankar, Senior Associate at Chambers of MS Kalra (Gurgaon), and Mr. Vishal Singhal, Advocate at Supreme Court of India
In today’s globalizing world, money laundering has become a catchphrase and a common area of concern for both developing as well as developed economies. Consequentially, the U.N. General Assembly has condemned the practice of money laundering in any form, urging all States to implement provisions against such crimes.
Continue reading “Predicate Offence Under PMLA Proceedings: A Myth or Reality?”
By Rishi Raj, Student at MNLU Aurangabad
The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”) serves two purposes: (i) saves the business that is viable; and (ii) facilitates the exit of those that are not viable. The rescue mechanism is achieved through a Corporate Insolvency Resolution Process (CIRP) under Part II of the Code, and the exit mechanism is dealt through a liquidation process under Part III of the Code.
Continue reading “Interplay Between the Companies Act and IBC: A Positive or Negative Impact on Liquidation Process?”
By Aryan Sharma and Sakshi Agarwal, Students at Institute of Law (Nirma University)
The Reflective loss rule bars or disables the claim brought by shareholders for any personal loss suffered by him due to diminution in the market value of his shares or diminution in dividend because of “loss” in the company, or diminution in value of net assets of the company, and such claim is barred because the “loss” is merely “reflective” of the loss suffered by the company. The origin of this rule can be traced to the case of Foss v. Harbottle, wherein the UK Court of Chancery held that whenever an actionable wrong is done to the company, then only the company can bring a claim as a “proper plaintiff”.
Continue reading “Tracking the Reflective Loss Rule and Its Implications in Various Jurisdictions”
By Nilanjan Kumar, CSL Finance Ltd.
A regulatory sandbox mechanism refers to a legislation-based test bed through which the concerned government regulators test new products and services introduced by financial institutions and body corporates (hereinafter referred to as “Entities”) in a controlled environment to study their market feasibility. In this ‘controlled environment’ the regulators permit certain regulatory relaxations for the purpose of testing while simultaneously studying the potential risks associated with the innovation. This in turn allows the Entities a breathing space to launch their innovations.
Continue reading “IRDAI Sandbox Regulations 2019 and India’s Startup Ecosystem: A Brief Legislative and Comparative Analysis”
By CS Anisha Raheja
The pandemic of Coronavirus (Covid-19) has affected, directly or indirectly, the lives and operations of human beings and entities alike. On one hand, Covid-19 has endangered the life and health of people; on the other hand, it has given rise to unprecedented challenges for business leaders worldwide. The restrictions imposed by governments of many countries, for curbing the spread of the Covid-19, has confronted the business leaders with significant challenges for carrying out the business activities. At the same time, the landscape of corporate governance has evolved with various changes in rules and regulations or relaxations introduced on account of the Covid-19 pandemic. The effects of the Covid-19 on governance would be different in countries across the globe.
Continue reading “Time to Pause – Rethink – Restart Corporate Governance Practices”
By Anushka Rungta, Student at Maharashtra National Law University Mumbai, and Pratik Irpatgire, Alumnus of Maharashtra National Law University Mumbai and Advocate
Powers of NCLT to refer the dispute to Arbitration
The Indian legal position with respect to adjudication of Insolvency by arbitration tribunal has always been under paradox due to availability of alternative remedies as prescribed under IBC Laws. §8 and 45 of the Arbitration Act endows the judicial authority to refer the dispute to the arbitration tribunal as prescribed by the arbitration clause. However, the Supreme Court in its several earlier attempts has particularly ruled out the powers of the NCLT or Company Law Board with respect to the adjudication of application under Insolvency or Winding up of the company.
Continue reading “The Conundrum of Arbitrability of Insolvency Disputes: Need for a legal framework and proactive role of appropriate forum [Part II]”