Line of Difference: Letter of Comfort and Contract of Guarantee

Yash Tripathi, Associate at Pioneer Legal, Mumbai


In an event of default in repayment of the debt, invoking a guarantee is always the priority of the lenders. However, it should also be looked thoroughly whether a document serves as a contract of guarantee or not. In the recent decision of Yes Bank Ltd. v. Zee Entertainment Enterprises Ltd. &Ors.[1], Bombay HC draws the line of difference between a letter of comfort (“LOC”) and a contract of guarantee.

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Extension of suspension of CIRP for another three months: Death Blow to Insolvency Regime

Priyanka Jaiswal, a final year student at NUSRL Ranchi


After the announcement of the nation-wide lockdown, an ordinance was promulgated which stated that no insolvency proceedings can be initiated by either the corporate debtor or any of its financial creditors for defaults arising during the six months beginning on March 25. The six months’ timeline for the suspension came to an end on September 25 and it is noteworthy to note that the Insolvency and Bankruptcy Code (Second Amendment) Act, 2020 was passed from both the houses and received Presidential assent on September 23, 2020. In exercise of the powers conferred by section 10A of the amended code, the Central Government extended the suspension and curtailed the operation of Section 7, 9, and 10 of the Code for all defaults occurring on or after 25th March 2020 for a period of six months plus three months now. Though these changes have been introduced with the motive to give companies breathing time to recover from the distress and to keep them as a going concern but there are some material shortcomings which may worsen the situation even further.

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Enforcement of Foreign Awards: “Pro Enforcement Bias”, Need of the Hour

Tariq khan and Aastha Agarwalla

The Indian arbitration law regime has seen many developments since the last decade; predominantly the alignment of ‘enforcement of foreign awards’ framework with the principles of United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 1958 (New York Convention). Despite the calibrated efforts, India is still perceived as a hostile jurisdiction to enforce foreign awards, precisely due to the repulsive recourse adopted by the Indian courts. In particular, the Supreme Court of India (SC) and the High Courts, in its decisional practice by various judgments, inter-alia, NAFED vs. Alimenta S.A. (NAFED Judgment), Venture Global Engineering LLC vs. Tech Mahindra, is testament to this fact.

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“Stamping Out” Double Taxation in Mergers &Acquisitions (M&As)

Pranav Bafna and CA Priyanshi Chokshi


The Covid-19 pandemic has hemorrhaged balance sheets of business organizations across the board. As money continues to bleed out, limiting the cash outflow is essential to ensure that businesses continue to survive. Alas, a surgical operation on the wounded balance sheet is a must. In this regard, Corporate Restructuring is one of the best tools in the hands of financial doctors to revive a struggling entity.

Undoubtedly, with Corporate Restructuring at the forefront of this battle, M&A’s could be a knight in the shining armor. In this regard, the knight’s armory does have a few chinks, which could stall its progression – Yes, we are referring to “Taxes”.

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Akshaya Kamalnath, Lecturer, Auckland University of Technology

The current focus on the monitoring role of the board has come under much criticism. Independent directors play a significant role in this model. However, their ability to truly function independently has been rightly questioned in the last decade. Independent directors are impeded by two main problems: lack of access to relevant information, for which they are reliant on management; and the high likelihood of being captured (to varying degrees) by management. There have been various suggestions to fix these problems, ranging from enhancing board diversity to drastically reforming the current model of corporate boards.


Government Resolutions to regulate Chinese Markets in India

Ayushi Choudhary and Pushpam Raj Pandey, law students, Dr. Ram Manohar Lohiya National Law University


With the outbreak of COVID-19, the Indian Government adopted certain protectionist measures to save the Indian industries from predatory capital investments. As seen in the past, the agenda behind amendments in the Foreign Direct Investment Policy (“FDI Policy”) has been to promote the ease of doing business by liberalizing the policies and making India “an investor-friendly nation”. However, amidst these unprecedented times, the Government opted for a bold move and released a press note on April 17, 2020(“Press Note 3”) to amend the consolidated FDI Policy of 2017. This came into effect on April 23, 2020 via a press release with the aim of regulating the opportunistic takeover of the Indian companies from astute business organizations.

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Khushi Mishra & Rajeev Dadhich  , Institute of Law, Nirma University.


The approach of the Indian courts in dealing with the anti-arbitration injunction has been disjunctive and imbalanced. On 12th Aug 2020, the Calcutta High court in Balasore Alloys Limited v. Medima LLC attempted to clarify the position of the Indian courts to grant an anti-arbitration injunction in a foreign seated arbitration. It held that the Indian courts have inherent power to grant anti-arbitration injunction, subject to a higher degree of the threshold. Anti-arbitration injunctions are often viewed as a challenge to the arbitral tribunals’ power to determine its own jurisdictions, generally regarded as the Kompetenz- kompetenz principle, which is perceived to be the pillar of the arbitration framework.


Restructuring and Anti- Takeover Restructuring Measures to Protect MSME Sector: One Step Forward?

Shatakshi Tripathi, Symbiosis Law School, Pune

As India’s GDP contracts by 23.9% in the first fiscal of this financial year, it does not come as a surprise that businesses continue to suffer the collateral damage of the COVID pandemic. With crumbling market conditions, active measures have been adopted by the Governments, across the globe, to pacify the increasing distress in the economy. The Indian Government also adopted various measures to mitigate the impact of the COVID crisis, especially on the Micro, Small and Medium Enterprise (“MSME”). Amongst other fiscal measures, the struggling MSME sector gained its first sigh of relief through the Confederation of Indian Industry’s (“CII”) idea to set-up a COVID Rehabilitation and Relief Fund to provide direct monetary assistance to the MSMEs. Along with this, the CII also recommended various measures, inter alia, an extension of bank loans, a special fund, steps regarding the filing of GST and improving the welfare of workers etc. that were necessary to tide in MSME’s through the pandemic. In this article, the author analyzes the measures adopted to protect the MSME sector, with a special focus on the debt restructuring measures and safeguards against opportunistic takeovers.

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Minority Squeeze Out: Dissecting the Conundrum over Multiple Takeover Routes

Priyanshu Agrawal and Vaishnavi Vyas, NMIMS KPM School of Law, Mumbai


In India, squeeze-outs have become an area of increasing interest and scrutiny. The extant legal framework provides for several methods through which squeeze-outs can be effected in Indian companies. On February 03, 2020, a newly notified provision, Section 230(11) of the Companies Act, 2013 (the “Act”) has been introduced to enable minority squeeze-outs in unlisted companies. The new rule enables a majority shareholder holding more than 75% of the stake in a company to make a takeover offer to acquire the minority stake. However, the amendment is a half-baked remedy and provides minimal protection to the minority shareholders. Having said that, the new rules do not envisage any clarity on the existing provisions but merely are an additional tool reflecting hostile takeover in unlisted companies.

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Restrictions on Cross Border Data Exchange in India: A Good Move?

Nitya Jain, Institute of Law Nirma University


The unprecedented surge in the global digital market has made data a valuable asset for individuals, corporations and Governments. Cross-border data flows have shrunk the world, allowing people across the globe to have the same user experience on the Internet. However, the explosion in the volume of data has generated as much a threat to its misuse as it created opportunities for companies. Today few global big shot organizations dominate the digital economy and their model is centered around data. Greater access to data provides a greater digital capital to a corporation, granting it an advantage over its competitors. Owing to this disadvantage faced by the domestic and small scale organizations, most jurisdictions impose conditions on when and how data can be transferred, and consequently some resort to physical data localization requirements. A study by Mckinsey Global Institute found that in 2014 the direct impact of cross-border data flows had raised world GDP by 3 percent (worth about $2.2 trillion in 2014), which exceeded the contribution of trade in traditional goods in that year.

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