Suits Against Foreign State Corporations – Is Sovereign Immunity Commercially Viable?

Background

In India, the concept of sovereign immunity or crown immunity as available to foreign states/rulers, is governed by Section 86 of the Code of Civil Procedure, 1908 (“CPC”). The legal doctrine essentially states that the sovereign or a foreign state cannot commit a legal wrong and is immune from a civil suit or criminal prosecution.

The doctrine is based on the legal maxim rex non potest peccare which means the king can do no wrong and is based on a common law governed by British jurisprudence. India also follows another principle which states, par in parem non habet imperium, which means one sovereign state is not subject to jurisdiction of another state.

Even while Indian law affords such protection to foreign state actors, Indian courts, in order to not let genuine claims be defeated, have been narrowing the scope of sovereign immunity, and have restricted the same. The principle of sovereign immunity covers the entire judicial process, from the institution of proceedings up to the stage of orders and decisions passed by a court as well as their execution. Continue Reading Suits Against Foreign State Corporations – Is Sovereign Immunity Commercially Viable?

COVID-19 - Impact on Real Estate

With a lot of disruption and backlog due to coronavirus, all industries, along with the real estate sector, have taken a massive hit. The year 2019 was not such a progressive year and everyone was counting on 2020 to recover and improve from last year’s lows. However, the real estate sector is in a deep standstill on the back of the global economic crisis, coupled with the COVID-19 situation.

This scenario calls for anyone to take precautions and due to restrictive movement because of the travel ban and the stock market crash, developers for one are not looking to take any chance in blocking their money in launching any new projects. At this point, one of the challenges being faced by them is the impact on contracts/agreements due to COVID-19, which are currently in motion/existence. The question being raised is whether the COVID-19 pandemic calls for a force majeure consideration in the existing contracts. Force majeure clause acts as a protection to parties wherein due to any unforeseen circumstances, either of the parties are unable to fulfil their commitment as per the agreed terms and conditions of the contract. To put it simply, due to any acts of god such as fire, flood, war, etc., parties are unable to perform their part as it is not reasonably within the control. Continue Reading COVID-19: Impact on Real Estate

Tax implications on INVITs, REITs and its Unitholders under Finance Act 2020

As you are aware, the Finance Minister, Ms. Nirmala Sitharaman, presented the Union Budget 2020-2021 on February 1, 2020 and consequently, introduced the Finance Bill, 2020 (“Bill”) in the Lok Sabha. The Bill comprised the financial proposals, including taxation related proposals, to amend the provisions of the Income-tax Act, 1961 (“Income-tax Act”) for the financial year 2021. Subsequently, the Finance Minister and her team had several discussions with various stakeholders, who we understand made many representations, seeking changes in some of the proposals. Pursuant to this, amendments to the Bill were presented and the Bill, incorporating the amendments was passed by the parliament on March 26, 2020 and received the assent of the President of India on March 27, 2020. It has now been enacted as the Finance Act, 2020 (“Finance Act”). Continue Reading UPDATE:  Tax implications on INVITs, REITs and its Unitholders under Finance Act 2020

Epidemic Diseases Act 1897

In times of  Covid-19 pandemic, which has halted not just commercial transactions but also lifestyles[1], the Indian Government took relevant  steps to avoid mass spread of the virus, read out the preamble of the Epidemic Diseases Act and got to work.

The colonial era act, all of 123 years old, has once again come to our rescue. The Epidemic Diseases Act of 1897 (the “Act”) was put in place due to the mass spread of the bubonic plague outbreak in Mumbai (then Bombay)[2]. The plague, said to have spread through rats,[3] killed hundreds of people per week in Mumbai.

Albeit the British colonial Government was said to have cleverly used the Act to imprison freedom fighters, the Indian Government is using the Act as a weapon to fight the novel virus and rightly so. While the Central Government’s powers are limited under the Act, it is the unity of various states in the country that has brought the Act in the forefront. Among other states, Karnataka[4], Maharashtra[5], Delhi[6] and Kerala[7] have issued advisories on management and brought into place ‘Covid-19 Regulations, 2020’ (“Regulations”). Vide these Regulations, states have exercised their powers under the Act to force employees of private establishments/ industries/factories/shops etc. to stay at home in the present times, to treat them as ‘on duty’; to stop all construction work immediately; to shut night clubs and weekly bazaars etc. Continue Reading Epidemic Diseases Act 1897 – Dusting an Old Cloak

Takeover regulations Companies Act

Background 

The Central Government recently notified Sections 230(11) and 230(12) of the Companies Act, 2013 (“Act”), which deal with takeover offers in unlisted companies. Section 230 of the Act provides for arrangements between a company and its creditors or members or any class of them, specifying the procedure to be followed to make such a compromise or arrangement. The newly-notified Section 230(11) states that in the case of unlisted companies any compromise or arrangement may include a takeover offer made in the prescribed manner, while Section 230(12) permits a party aggrieved by the takeover offer to make an application, bringing its grievance before the National Company Law Tribunal (“NCLT”). The Ministry of Corporate Affairs has also amended the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“CAA Rules”) and the NCLT Rules, 2016, corresponding to the above provisions. Sub-rules 5 and 6 have been added to Rule 3 of the CAA Rules, and Rule 80A has been inserted in the NCLT Rules, detailing the manner in which the applications may be made under Sections 230(11) and 230(12), respectively. However, these rules are not applicable to any transfer or transmission of shares through a contract, arrangement or succession, as the case may be, or any transfer made in pursuance of any statutory or regulatory requirement. Continue Reading Takeover Rules for Unlisted Companies: Minority Squeeze Outs Under Section 230(11) of the Companies Act, 2013

Short And Long-Term Impact Of Current Market Conditions - Part I

 Overview of current markets

During the morning trading session on March 23, 2020, the S&P BSE Sensex crashed 2,991.85 points (10%) to hit 26,924.11, while the Nifty 50 fell 842.45 points (9.63%) to slip to 7,903.00, triggering a circuit breaker and suspension of trading for 45 minutes, for the second time this month.

Market indices across the globe have fallen at record rates following the World Health Organization’s declaration of the COVID-19 outbreak as an international public health emergency on January 30, 2020, and then as a global pandemic on March 11, 2020. Add to that the collapse of Yes Bank earlier this month, with a moratorium crippling liquidity, along with the sharp decline in oil and crude prices, and the Indian market indices have taken an unprecedented hit. Continue Reading Short And Long-Term Impact Of Current Market Conditions – Part I

COVID-19 - A lot done, more needs to be done

With the World Health Organization (WHO) declaring Coronavirus or COVID-19 a pandemic, it is now essential that countries and organisations that have the ability to find solutions come together, share information as much as possible and work together across borders. Already, experts are worried that the impact of Covid-19 may surpass that of the 2008 global downturn. Till date, globally, nearly 4,71,417 people have tested positive and approximately 21,295 have lost their lives to the deadly virus. On the date of drafting this article, the number of COVID-19 positive cases in India had crossed 700 (seven hundred), with 14 (fourteen) people succumbing to the disease. India is now under a full government ordered 21-day lockdown. A cure remains elusive till date. But in the words of famous author Louisa May Alcott, ‘Be comforted, dear soul! There is always light behind the clouds’. And it is this light that India needs to focus on in order to secure a future that survives the present. Continue Reading COVID-19: A lot done, more needs to be done  

How did a virus extend limitation?

 Introduction

The ongoing COVID-19 pandemic has forced unprecedented measures on the movement of people across the country, thereby also bringing the functioning of courts and tribunals to a grinding halt. Considering the present scenario, where courts have become physically inaccessible, the Supreme Court of India (“Supreme Court”) on March 23, 2020 took suo-moto cognizance of a petition for extension of limitation and passed an order (“Order”)[1] extending the limitation prescribed either under general law or special laws, whether condonable or not, for filing any petitions, applications, suits, appeals and all other proceedings in all courts and tribunals from March 15, 2020, until passing of further orders.

The Supreme Court reasoned that the Order was being passed to “obviate such difficulties and to ensure that lawyers/litigants do not have to come physically to file such proceedings in respective Courts/Tribunals across the country”. Continue Reading How did a virus extend limitation?

Indian Insolvency Law responds to the COVID-19 Pandemic

With more than three lakh confirmed cases and 14 thousand deaths across 190 countries, the Coronavirus disease (COVID-19) pandemic has caused (and continues to cause) unprecedented disruptions in the global political, social and economic environment. India has not remained untouched from this. With almost 500 confirmed cases and the country in lock-down mode to prevent further outbreak, social and economic activities have come to a grinding halt.

The pandemic has forced governments across the world to impose restrictions on working and travel conditions as well as human movement. The severity of the situation requires quick and decisive action from the Government and all sections of the economy to prevent ‘deepening’ of the crisis. Continue Reading Indian Insolvency Law responds to the COVID-19 Pandemic

COVID-19 at the movies

The year 2019 had been a groundbreaking year for the Indian film industry, which saw some of its best box office performances in the past decade. As content took center stage, many films of various budgets witnessed success at the box-office. However, the year 2020 seems to be a completely different story.

The outbreak of COVID-19 in December 2019 has left the global economy in a state of mayhem. While, the true impact of COVID-19 was not truly experienced in India until early March, the country knew it was a matter of ‘when,’ and not ‘if’. By March 15, 2020 we saw the Central and State Governments introducing policies to limit social interaction, ordering shut down of establishments and taking precautionary measure to implement ‘social distancing’. The limitation on movement and a fear of contracting COVID-19 steered a large number of people away from cinema halls and into their homes, impacting the movie business within India and around the world. Continue Reading COVID-19: At the Movies