Author: cflrinsights

Ashutosh Choudhary & Gaurav Baheti are students at the National Law University, Odisha.

The nationwide lockdown enforced all over India due to the outbreak of Covid-19 pandemic is turning out to be a curse for the Indian economy. The uncertainty and distress created for corporate persons in businesses and the financial market of the Indian economy have severely disrupted the financial operations at large scales which may lead corporate entities into liquidation.[i] The Indian government has come up with several reforms to rescue corporate persons from economic distress in the current Covid-19 times from being pushed into insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 (“Code”) for such defaults owing to the current time which might lead them into liquidation.[ii]

Continue reading “IBC (Amendment) Ordinance, 2020: Hanging Sword On Personal Guarantors To Corporate Debtors”

By Shubham Dimri, Law Graduate, Gujarat National Law University, Gandhinagar

Introduction

The NSE IFSC and BSE’s INX have started offering rupee linked derivatives on their platforms after receiving the approval from the Reserve Bank of India(RBI) and the Securities and Exchange Board of India(SEBI) early this year. This expands the bouquet of financial products offered in IFSC along with allowing for hedging of currency rate risk to prospective participants. The process of developing IFSC into a place, where rupee derivatives are traded, received a boost after the Task Force on Offshore Rupee Markets recommended that to prevent exchange rate shocks, currency rupee derivatives are needed to be brought within the ambit of domestic regulators. This was necessitated by the fact that non-deliverable forwards contracts in Rupee traded in foreign exchanges had a higher value and volume turnover than domestic exchanges which impacted the domestic macro-economic scenario. Following this recommendation, RBI and SEBI have framed rules for the segment in GIFT IFSC to start the process of developing the currency derivative market.

Continue reading “Rupee Linked Derivatives in IFSC: A New Beginning”

Rahul Jajoo, Advocate, Supreme Court of India

Introduction

Forward markets pertaining to commodities in India have been recognized as a way to deal in derivative markets ^[1] since independence. It was however only in 1952 that the government of India decided to regulate the regime of forward markets and hence, the Forward Contracts Regulation Act, 1952 (“FCRA”) was enacted. The object and purpose of the FCRA was “An Act to provide for the regulation of certain matters relating to forward contracts, the prohibition of options in goods and for matters connected therewith.”

Continue reading “Forward Markets in India and the Saga of Electricity”

Divyansh Nayar, 4th year, National Law University, Odisha

Introduction

The industrial undertakings are in dire need of funds for various purposes during the period of this economic collapse at the heels of COVID- 19 Pandemic. In order to attenuate the capital adequacy requirement, the Securities and Exchange Board of India (‘SEBI’) allowed relaxations in the rights issue process that seem to ease out the stringent requirements that debilitate the facility of raising funds by companies. Through a series of circulars, SEBI streamlined the process in order to cater to the need of the market and promote the influx of capital in the market. This article lays down the scheme of relaxations proffered and emphasizes on the capital requirement of the market

Continue reading “Streamlining The “Rights Issue” Process: Temporary Relaxations Amid The Pandemic”

Tanuj Agarwal, Institue of Law, Nirma University

Introduction

Covid-19 pandemic has raised serious apprehensions surrounding health and safety causing a lockdown in India.  The pandemic has caused a worldwide recession and has spooked investors’ sentiment. Prior to the coronavirus outbreak, the Indian stock market was in full positive swing as Sensex and Nifty had reached their all-time intraday peak of 42,273.87 and 12,430.50 respectively in January, 2020. Even after attaining such progress, the Indian stock market is witnessing the most difficult period for the past few months. The stock market has observed lower circuit levels after 12 years on March 13, 2020. Afterward, the equity index discerning a continuous downfall. On March 19, 2020, Sensex crashed below 27,000 and Nifty breached the level of 7,900, thereby attained their five-year closing low levels. Consequently, an approximate downfall of 37% is evident in both the equity indices within a period of just 2 months. The stock market has seen a considerable collapse due to high market volatility. This downfall has degraded the financial market and faded the interest of investors and corporates. Thereby, the concern is whether such a market downturn can be controlled by restricting short-selling.

Continue reading “COVID-19 AND STOCK MARKET CRASH: SHOULD SEBI BAN SHORT-SELLING?”

Nitya Jain, 4th year law student, Nirma University

Introduction

The world position at a standstill, for an unforeseeable force disrupts lives across boundaries. Covid – 19 has emerged as a pandemic whose expiration is still a blurry vision. As a retort to the deadly virus, the governments of various nations have put strict travel restrictions with almost nil movements of goods and people, leading to severe disruptions in the supply chains all over the world. Consequently, various contracts are being assailed or tend to be violated because of late or no delivery. This article assembles and then, analyses the answers of various governments to the question – Whether Covid -19 pandemic can amount to a force majeure event, excusing parties of their contractual obligations for time being?

Continue reading “Is Covid-19 a Force Majeure Event? : A Global Scenario”

Urmil Shah, 3rd year law student, Auro University Surat

Introduction

There has been quite deliberations on distributed ledger technology and its application with smart contracts on utilizing it as a mode of dispute resolution, from a conflict management standpoint. Although, smart contracts provide endless potential to assist disputing management, particularly in the field of international arbitration due to its delocalized nature; however, the compliance of such contracts with the domestic legal regime of states is imperative to ascertain the validity, from legal certainty standpoint.

Continue reading “Enhancing Dispute Resolution Through DLT: A Case For Regulatory Framework Of “Smart” Contracts”

Shubham Gupta, 4th year law student, Nirma University

Introduction

With an unprecedented turn of events in the wake of COVID -19, the enforceability of contracts have become a major lookout. Giants such as Inox Leisure Ltd., PVR, Cinepolis are invoking the Force Majeure [“FM Clause”] in their contracts for subduing the rental obligations to their landlords.[1] COVID-19 has caused serious market disruptions and financial dislocations. The basic assumption is that there is a fundamental change in market circumstances due to the uncertainty of an outbreak, and there is a persisting problem until the extenuation of the disease.

Continue reading “Covid-19 and the Extent Of Contracts Enforceability: Impact on Commercial Contracts”