The Ministry of Finance (“MoF”) and Reserve Bank of India (“RBI”) notified the new overseas investment (“OI”) regime on August 22, 2022 (“New Regime”).
The New Regime inter alia comprises the OI Rules, 2022[1] notified by the MoF (“Rules”), the OI Regulations, 2022[2] notified by the RBI and the Master Directions issued by the RBI to authorised persons. It supersedes FEMA 120[3] and the circulars and directions issued thereunder (“Old Regime”).
India has a vast coastline and easy access to shipping routes, yet India contributes only 1% in global trade.[1] Many major shipowners and operators have chosen key international maritime centres such as Singapore, Hong Kong, and Dubai as their base for operations.
To create a stimulating ecosystem that can help Indian entities compete with global marine hubs by accelerating and boosting their presence internationally, IFSCA has constituted a Committee on Development of Avenues for Ship Acquisition, Financing and Leasing Activities (“SAFAL Committee”) to obtain a complete overview and assessment of the existing legal and regulatory regime in IFSC in India for ship acquisition, financing and leasing.
On September 21, 2022, the Department of Telecommunications (“DoT”) at the Ministry of Communications, Government of India (“Government”), proposed to replace the existing legislation governing telecommunications in India, namely, Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950 (collectively, “Telegraph Laws”), with the draft Indian Telecommunication Bill, 2022 (“Draft Bill”).[1]
Continue Reading The Draft Indian Telecommunication Bill, 2022: A Work in Progress
Since the Covid-19 pandemic, people’s perception of healthcare has undergone a change. While the top 10 causes of death in India continue to be non-communicable diseases like diabetes, cardiac diseases, and respiratory diseases, these are easily preventable/ manageable if addressed at an early stage through vital screening and consultation at regular intervals. Furthermore, routine testing might reduce the severity of rare disorders, including auto-immune deficiencies, and also help lower cancer-induced mortality.
The appointment of the same individual on the Board of Directors (“Board”) of both an insurer and an insurance intermediary (brokers, corporate agents and web aggregators) (“Common Director”) is currently prohibited under Section 48A[1] of the Insurance Act, 1938 (“Act”). However, the Insurance Regulatory and Development Authority of India (“IRDAI”) is empowered to permit an intermediary to be a director on the Board of an insurance company subject to the conditions and restrictions as may be imposed by the IRDAI. Therefore, if an insurer were to appoint Common Directors on its Board, a prior IRDAI approval is a critical requirement.
Pursuant to the Report of the Reserve Bank of India (“RBI”) Working Group on Digital Lending, issued on November 18, 2021, and the RBI Press Release on ‘Recommendations of the Working Group on Digital Lending – Implementation’, dated August 10, 2022 (“August Press Release”), the RBI released the Guidelines on Digital Lending on September 2, 2022 (“Guidelines”). Our Alert examines the key changes introduced and industry implications.
The Supreme Court in Oil and Natural Gas Corporation Limited (“ONGC”) Afcons Gunanusa JV (“Afcons”),[1] while deciding on four cases, inter alia held that:
(i) arbitrators cannot unilaterally decide their own fees but can exercise discretion to apportion the costs, demand deposit, and exercise lien over the delivery of the arbitral award if payments to it remain outstanding;
(ii) the fees of the arbitrator must be fixed at the inception to avoid unnecessary litigation and conflicts between parties at a later stage;
(iii) the term ‘sum in dispute’, which is the header of the first column of the Fourth Schedule to the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”), refers to the sum in dispute in a claim and counter-claim separately and not cumulatively. Consequently, arbitrators are entitled to charge separate fees for the claim and the counter-claim in an ad hoc arbitration proceeding;
(iv) the highest fee payable in an arbitration proceeding governed by the Fourth Schedule is INR 30,00,000, which is a ceiling applicable on a per-arbitrator basis and subject to a sole arbitrator’s entitlement of an additional amount of 25% on the fee payable as per the Fourth Schedule;
(v) the Fourth Schedule is to have a mandatory effect on the stipulation of fees by arbitrators appointed by arbitral institutions designated for such purpose in terms of Section 11 of the Arbitration Act in the absence of an arbitration agreement governing the fee structure; and
(vi) as regards court-appointed arbitrators, the Supreme Court held that the Fourth Schedule is by itself not mandatory in the absence of rules framed by the High Court concerned, and issued directives for fixing of fees in ad hoc arbitrations where arbitrators are appointed by courts.
Continue Reading Reinstating Party Autonomy in Ad Hoc Arbitrations
The Insurance Regulatory and Development Authority of India (“IRDAI”) permits insurance companies and intermediaries to appoint individuals (i.e. natural persons) as Point of Sales Persons (“PoSPs”). PoSPs are essentially individuals who are permitted to carry out activities pertaining to solicitation and marketing of insurance policy products and act as distribution channels for insurers or intermediaries. In accordance with the provisions of the Insurance Act, 1938, sale and solicitation of insurance products can only be carried out by entities licenced by the IRDAI, i.e. either insurers or intermediaries. PoSPs, despite not being “licenced persons”, are “qualified persons” (as discussed below) and carry on the activity of sale and solicitation of insurance products. They are sponsored by insurers or intermediaries to carry on sale and solicitation activities.
Continue Reading Point of Sales Persons: An Alternate Distribution Channel for Insurers
The journey to a new general data protection law in India is more than a decade long and has seen several milestones ranging from the reports of Committees headed by Justice A.P. Shah[1], Justice B.N. Srikrishna[2], and a Joint Parliamentary Committee (“JPC”) to draft legislation in 2018[3], 2019 (“PDP Bill”)[4] and 2021 (“DPB”)[5].
While the recent withdrawal of the PDP Bill[6] is seen as a sign of a long and twisted road ahead, regulators in sectors such as banking, financial services and insurance have not had the luxury of taking the scenic route.
Continue Reading The RBI’s Digital Lending Recommendations: A Sign of the Road Ahead?
Insurance linked securities (ILS) is an umbrella term covering instruments that are designed to transfer insurance risks to the financial market. The performance of ILS is typically also linked to the possible occurrence of such insurance risks. ILS, in global financial markets, is not a novel concept and the earliest known issuance of ILS by reinsurance companies was in the US in 1992, in the aftermath of Hurricane Andrew. In fact, ILS has been used multiple times by reinsurance companies in the US when their capacities were severely affected by the occurrence of natural disasters like earthquakes and hurricanes and even man-made disasters like the World Trade Center bombing.
Continue Reading Insurance Linked Securities – A Viable Alternative to Reinsurance?