SEBI’s Consultation Paper: Streamlining ‘Promoters’ and ‘Promoter Group’ Definition

By Sinhani Prem, Student at Jindal Global Law School, and Sukriti Bhagat, Associate at IndusLaw

Introduction

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.

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Insolvency and International Commercial Arbitration: Two Distinct Approaches

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.

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Condonation of Delay under Arbitration and Conciliation Act and Commercial Courts Act

By Ashish Kumar and Trishit Kumar Satpati, Students at NMIMS School of Law, Bangalore

Introduction

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”).

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Predicate Offence Under PMLA Proceedings: A Myth or Reality?

By Mr. Nishant Shankar, Senior Associate at Chambers of MS Kalra (Gurgaon), and Mr. Vishal Singhal, Advocate at Supreme Court of India

Introduction

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.

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Interplay Between the Companies Act and IBC: A Positive or Negative Impact on Liquidation Process?

By Rishi Raj, Student at MNLU Aurangabad

Introduction

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.

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Arbitration in Islamic Finance: A Favorable Alternative or a Fashionable Trend?

By Pooja Unnikrishnan, Student at Alliance School of Law, Alliance University, Bengaluru

An Overview of Islamic Finance 

In recent years, financial activities conducted under the banner of “Islamic finance” have grown significantly in volume and scope, attracting significant attention worldwide. The Islamic finance industry came about in the 1970’s and since then, it has steadily expanded with the demand for Sharia laws compliant products and services. The industry’s total assets have reached US $ 2.5 trillion globally in 2019.

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Tracking the Reflective Loss Rule and Its Implications in Various Jurisdictions

By Aryan Sharma and Sakshi Agarwal, Students at Institute of Law (Nirma University)

Introduction

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”.

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IRDAI Sandbox Regulations 2019 and India’s Startup Ecosystem: A Brief Legislative and Comparative Analysis

By Nilanjan Kumar, CSL Finance Ltd.

Introduction

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.

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