2020

Domestic Arbitration receives booster shot from Supreme Court

  

Recently, the Supreme Court in Quippo Construction Equipment Limited V. Janardan Nirman Private Limited[1] held that if a party to an arbitration agreement chooses not to participate in arbitral proceedings, that party is deemed to have waived the right to raise objections regarding jurisdiction of the arbitral tribunal or the scope of its authority at a later stage. While dealing with objections to a domestic arbitral award, the Supreme Court also had occasion to comment on the perennial seat vs venue debate. In doing so, it inter alia observed that objections with respect to ‘place of arbitration’ may have significance in international commercial arbitrations (where the place of arbitration may determine which curial law would apply), but not so much in domestic arbitrations.
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Single Brand Retail Trading A tale to harmonise NDI Rules with the FDI Policy

In an attempt to liberalise retail trading in India, the Government of India (“GoI”) has introduced intermittent reforms in the past decade, with a view to make the sector investor friendly and to ensure that India remains an attractive investment destination from the Foreign Direct Investment (“FDI”) perspective. The measures introduced have enabled foreign players to set up brick and mortar stores and operate in the e-commerce space to facilitate the transformation of the retail landscape in India.
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Overriding the IBC’s over-rider

Insolvency resolution regimes, globally, function as an exception to otherwise accepted norms of commercial law.[1] The Indian Insolvency and Bankruptcy Code, 2016 (“Code”), is no exception: a mere glance at the Code will display how it has a liberal sprinkling of non-obstante clauses.[2] From a specific dispute resolution mechanism, to an overarching carve out for insolvency resolution mechanism, the legislature has inserted non-obstante clauses in the Code as guidance of its intent. One would imagine that this would have ensured sufficient clarity for all stakeholders, avoided disputes and ensured timely insolvency resolution. Yet, as market participants try to understand the scope and intent of non-obstante clauses in the Code, such clauses continue to generate legal debate and litigation[3]. Perhaps, the stakes are too high for the parties to resist litigating. And some would argue not without good legal reason: after all, the Hon’ble Supreme Court has over the years identified exceptions[4] to the Latin maxim ‘leges posteriores priores contraries abrogant’ i.e. in the event two special statutes contain non obstante clauses, the non-obstante clause in the chronologically later special statute shall prevail[5].
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Injunction against encashment or invocation of Bank Guarantees

 Introduction 

The restraining of the invocation of a bank guarantee has traditionally been one of the less ventured into areas of law. In India as well as in common law, Courts have laid down strict standards and thresholds for judicial intervention, and only in the rarest cases would Courts allow an injunction against invocation of a bank guarantee. This trend, however, is changing and evolving constantly.

A bank guarantee is a written tripartite contract given by a bank (say, A), on behalf of its customer (say, B) in relation to a particular commercial contract with a third-party (say, C). By issuing this guarantee, Bank A takes responsibility of paying a fixed sum of money in case of non-performance of contractual obligations by B towards C.
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Asset Classification - Be-hold

With the outbreak of the COVID-19 pandemic and the consequential countrywide lockdown, economic activities of almost all corporates, except those falling under essential services, have witnessed an unprecedented slowdown. As a result, cashflows and debt servicing capabilities of most borrowers have been seriously impacted, necessitating the Reserve Bank of India (“RBI”) to intervene and introduce a regulatory framework, enabling lenders to provide much needed relief to their borrowers.

This blog analyses the relaxation of the asset classification norms to be followed by a bank, with respect to a term loan[1] on account of the measures introduced by the RBI on March 27 and April 17, 2020 and related judicial pronouncements.
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COVID-19 Impact Responses by State Education Regulators

Background

To tackle the COVID-19 crisis, India has seen significant legislative and policy changes. The thrust of the new rule book has been aimed at softening the blow delivered by the crisis to various stakeholders in the society, including parents and students, and in certain cases, balancing this with the interests of the school management and staff.

Following in the footsteps of its global counterparts, the Ministry of Home Affairs (MHA) has announced three successive lockdowns till date – March 25, 2020, April 15, 2020 and May 1, 2020. The guidelines issued by the MHA pursuant to the lockdowns has prohibited operation of all educational, training, research and coaching institutes. However, the MHA and the state governments have encouraged education through online medium. Various state governments had taken similar steps even prior to the issuance of the MHA guidelines, and had also passed orders promoting all students till class VIII / IX to the next class without exams.

The interim shutdown of schools has come with its fair share of peculiar challenges, with fee collection drawing the most attention. While several states have taken measures in this regard, this post highlights the actions taken in six states – Delhi[1], Tamil Nadu, Telangana, Karnataka, West Bengal and Maharashtra.
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Validity of Operational Licenses In The Wake of Covid-19 – A Grey Area

In the wake of the pandemic Covid-19, many legal and regulatory modifications have been undertaken in the country to facilitate compliances by the business houses as well as ease of doing business.

Recently, the Ministry of Corporate Affairs, Securities and Exchange Board of India, Insolvency and Bankruptcy Board of India, Real Estate Regulatory Authority, to name a few, have issued various regulations as well as amended the existing ones to suitably modify timelines and processes needed for secretarial compliances, periodic reporting, disclosure requirements, tasks to be undertaken under liquidation process etc.
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COVID-19 - Its impact on the telecommunications sector in India

As the global economy continues to reel from the shock and the lasting impact of the novel coronavirus (COVID-19) outbreak, “work from home” and “social distancing” have become the buzzwords in today’s business landscape, with the telecom sector being the invisible hand driving this shift. Remote working, video conferencing, and telecommunications technology have quickly emerged as key enablers for business operations during this lockdown, and streaming services such as Netflix have become the go to source for entertainment, putting the telecom sector in the spotlight today.

The importance of having a strong telecommunications network during this lockdown has also been acknowledged by the government in the guidelines dated March 24, 2020, issued by the Ministry of Home Affairs (MHA)[1], which provides that “telecommunications, internet services, broadcasting and cable services, IT and IT-enabled services (ITeS) only (for essential services)” are the essential services and are exempt from the lockdown. This exemption was also provided in the MHA notification dated April 15, 2020 (which extended the lockdown until May 3, 2020)[2] and in the MHA notification dated May 1, 2020 (which further extended the lockdown for a further period of two weeks).
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100% FDI allowed in insurance intermediaries - No more ‘peekaboo’!

The Government of India notified the Foreign Exchange Management (Non-debt Instruments) (Second Amendment) Rules, 2020 (“Non-Debt Rules Second Amendment”) on April 27, 2020, amending the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019. With this amendment, foreigners can now look to acquire 100% stake in an insurance intermediary, subject to verification by the Insurance Regulatory and Development Authority of India (IRDAI). This amendment was much awaited by insurance intermediaries[1], which have in the past lobbied to be declassified from the same bracket as insurance companies, in so far as foreign investment was concerned.
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Extent of applicability of Code of Civil Procedure, 1908 to proceedings under the Consumer Protection Act, 1986

OVERVIEW

The Consumer Protection Act, 1986 (read with the rules and regulations framed thereunder) (hereinafter referred to as the “Act”) was enacted with the objective of providing better protecting the interests of consumers. Towards this end, the Act provides for the establishment of consumer councils and other authorities for settlement of consumer disputes and for matters connected therewith. The Act is a composite and complete code in itself, providing for exhaustive substantive and procedural provisions in relation to the redressal of consumer disputes. For speedy redressal of consumer disputes, the Act provides for setting up of quasi-judicial machinery at the District, State and Central Level (“Dispute Redressal Authorities”). These quasi-judicial authorities are creatures of the statute and have wide powers under the Act, to inter alia grant reliefs of a specific nature and to award, wherever appropriate, compensation to consumers.
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