Arbitration Act and FEMA

The judgments of the Delhi HC in Cruz City and SRM Exploration, discussed in Part 1, appears to ignore the earlier decision of the SC in Dropti Devi v Union of India[1], where the SC held (in the context of prosecution under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act) that the legislative objectives of FERA and FEMA are identical, namely, preservation of the foreign exchange resources of the country.

Continue Reading Legislative gap between the Arbitration Act and FEMA: Should Parliament step in? – Part II

Unending woes of realty sector - High Interest Rates

The real estate sector in the past few years has witnessed massive financial crisis with several real estate companies going bankrupt and many others undergoing corporate insolvency resolution process. While the reasons are manifold, one could see steady recovery despite inflation worries and expensive capital. The recent Supreme Court judgment in recalling its past orders delivered in the matter, relating to insolvency of Amrapali Group of Companies (“Amrapali Group”), have now posed a new challenge to the realty business in NOIDA and Greater NOIDA region. The Supreme Court has held that real estate developers in these regions will have to pay interest amount on outstanding lease premium and other dues to Noida and Greater Noida Authorities (“Authorities”) at rates that have been agreed upon under the contract entered into between them and the reduced interest rates will not be applicable to them. Continue Reading Unending woes of realty: ‘high interest rates on dues continue to apply’, says SC

Arbitration Act and FEMA

Background

India is one of the few countries that still has exchange controls and does not have full capital account convertibility.

The Foreign Exchange Management Act, 1999 (“FEMA”), empowers the Reserve Bank of India (“RBI”) to frame regulations, master directions and issue circulars for the enforcement of the FEMA (“FEMA Regulatory Regime”). The FEMA Regulatory Regime contemplates prior RBI approval for certain categories of capital account transactions between residents and non-residents.

The enforcement of international arbitration awards in India, where there is going to be a remittance of foreign exchange from a resident to a non-resident, would invariably have FEMA implications. FEMA implications may also arise in situations where the foreign award provides for transfer of shares between residents and non-residents. If the foreign award is not in conformity with the FEMA Regulatory Regime, in such a situation, can the court, where the enforcement action is filed, decline enforcement on the ground that the foreign award would be contrary to the country’s ‘public policy’.

Continue Reading Legislative gap between the Arbitration Act and FEMA: Should Parliament step in? – Part I

Data Protection Bill 2022

The Ministry of Electronics and Information Technology (“MEITY”) has released a draft of the Digital Personal Data Protection Bill, 2022 (“The Bill”) for public consultations along with an explanatory note for each provision and the underlying principles that guide the drafting[1]. The public consultations are open till December 17, 2022[2].  This is Part II of our analysis on the Bill.  Click here to read Part I of this post

Continue Reading The Digital Personal Data Protection Bill, 2022 – Part II

Data Protection Bill

The Ministry of Electronics and Information Technology (“MEITY”) has released a draft of the Digital Personal Data Protection Bill, 2022 (“The Bill”) for public consultations along with an explanatory note for each provision and the underlying principles that guide the drafting[1]. The public consultations are open till December 17, 2022[2].

Continue Reading The Digital Personal Data Protection Bill, 2022 – Part I

AIF

Introduction

To enhance the standardisation of the application process, SEBI, on November 3, 2022, published ‘FAQs for grant of registration as alternative investment fund[1] (“FAQs”). The FAQs are guidelines for submission of the application for seeking registration as an Alternative Investment Fund (“AIF”). In addition to the information, documents and undertakings mandated under the First Schedule of the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”), an applicant will now be required to submit information, documents and undertakings, as reproduced in this article. Thus, the application form will now constitute the following, (a) information as specified under the First Schedule of the AIF Regulations; and (b) other information as specified in the FAQs.

Continue Reading SEBI prescribes additional requirements for registering AIFs

Insider Trading Regime

Introduction

Across jurisdictions, the mischief of insider trading is sought to be curbed and punished by the market regulators since any securities market of repute would measure its success, among other variables, based on the integrity and fairness of transactions conducted on its platform. As such, the prohibition of insider trading stems from the moral imperative, which demands that there is no information asymmetry between insiders and other shareholders while dealing in listed securities. This effectively translates into restraint being exercised by insiders i.e. the persons who have access to the unpublished price sensitive information in relation to the listed securities in which they deal.

Continue Reading Winds of Change – The Recent Judicial and Legislative Developments in Insider Trading Regime

LODR Disclosure Regime

The Securities and Exchange Board of India (SEBI) has recently issued a consultation paper on review of the disclosure requirements as applicable to listed companies. Regulation 30 of the Listing Obligations and Disclosure Requirements (LODR) Regulations prescribe the material events or information that is to be duly disclosed by listed companies to the stock exchanges. It is divided into two parts – Para A contains events that are deemed material, and Para B contains items that are to be disclosed basis application of the materiality policy of the respective companies. SEBI has indicated several reasons for review of the current regime – including investor complaints on asymmetrical disclosure of information and company complaints on lack of uniform guidance.

Continue Reading SEBI’s recent proposal on tweaking the LODR Disclosure Regime – More Spill and Tell

SEBI

In October 2022, the Securities and Exchange Board of India (“SEBI”) introduced several amendments to various chapters of its Operational Circular for issue and listing of Non-convertible Securities, Securitised Debt Instruments, Security Receipts, Municipal Debt Securities and Commercial Paper, dated August 10, 2021 (“Operational Circular”), in response to certain representations received by it from various market participants. These modifications appear to be in line with SEBI’s continued efforts to improve the accessibility, fairness, and transparency of the debt securities market.

Continue Reading Changes to SEBI’s framework on non-convertible debt securities: A Snapshot

Digital India

In a progressive move, the Ministry of Electronics and Information Technology (MeitY) has notified[1] a modification to the Information Technology Act, 2000 (“IT Act”), which opens new doors for electronic execution of contracts.

Continue Reading Electronic Execution of Contracts – A step towards Digital India