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.

Continue reading “Predicate Offence Under PMLA Proceedings: A Myth or Reality?”

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.

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

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.

Continue reading “Arbitration in Islamic Finance: A Favorable Alternative or a Fashionable Trend?”

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”.

Continue reading “Tracking the Reflective Loss Rule and Its Implications in Various Jurisdictions”

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.

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

Time to Pause – Rethink – Restart Corporate Governance Practices

By CS Anisha Raheja

Introduction

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”

The Conundrum of Arbitrability of Insolvency Disputes: Need for a legal framework and proactive role of appropriate forum [Part II]

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]”

The Status of Homebuyers as Financial Creditors: Is the Law Clear?

By Ayushi Bhutra, Student at National Law University, Nagpur

The rights of homebuyers under insolvency proceedings have been under the scanner for a while. Earlier, the homebuyers were under the head ‘other creditors’ and they did not fall under the category of ‘financial’ or ‘operational creditor’. However, the legislature through the Insolvency and Bankruptcy Code (Second Amendment) Act of 2018 has brought the allottees as per RERA under the category of Financial Creditors. This was constitutionally challenged before the Supreme Court of India in the case of Pioneer Urban Land & Infrastructure v. Union of India. However, the Supreme Court has upheld the validity of the amendment and stated that there is nothing wrong in this classification. Through this article, I argue in disagreement with the Supreme Court judgment and will also lay down the reasons of such disagreement.

Continue reading “The Status of Homebuyers as Financial Creditors: Is the Law Clear?”

The Conundrum of Arbitrability of Insolvency Disputes: Need for a legal framework and proactive role of appropriate forum [Part I]

By Anushka Rungta, Student at Maharashtra National Law University Mumbai, and Pratik Irpatgire, Alumnus of Maharashtra National Law University Mumbai and Advocate

Introduction

At the outset, the unprecedented times in lieu of COVID-19 has casted a lot of skeptical approaches in the backdrop especially during the adjudication of insolvency proceedings, thus placing it notably and inevitably upon the adjudicatory authorities to preclude inadvertent interpretation of statutory remedies.    

Continue reading “The Conundrum of Arbitrability of Insolvency Disputes: Need for a legal framework and proactive role of appropriate forum [Part I]”

Commercial Disputes and a Limited Right to Appeal

By Priyanshu Agarwal and Soumit Ganguli, Students at Faculty of Law, Jamia Millia Islamia, New Delhi

The Commercial Courts Act, 2015 (Act) is undoubtedly one of the most crucial pieces of legislations enacted in the last few years. It was rolled out with the intention of providing more efficient and expeditious remedies in deciding cases of commercial disputes in order to promote trade and commerce in the country. While India continues to fare well in the World Bank’s Doing Business Report, the ever-growing pendency of commercial disputes continues to be a concern for the nation’s business environment. In order to ‘ease’ this situation, commercial courts were established to reduce delays and dispose of commercial disputes in a more streamlined manner. The essence of the Act lies in deciding specifically commercial disputes by the “[C]onstitution of Commercial Courts, Commercial Division and Commercial Appellate Division in the High Courts for adjudicating commercial disputes of specified value and matters connected therewith or incidental thereto”. Hence, the object of the Act, as a part of India’s Ease of Doing Business initiative, is to develop India’s image as a viable business destination which shall lead to incentivise Foreign Direct Investments (FDI) in the country and, thus, providing a much-needed impetus to the Indian economy.

Continue reading “Commercial Disputes and a Limited Right to Appeal”