Section 34 of the Arbitration and Conciliation Act, 1996 (Act) sets out the grounds on which arbitral awards passed in domestic arbitrations and international commercial arbitrations seated in India can be set aside.  As regards foreign awards (i.e. arbitral awards passed in foreign seated arbitrations), whilst the same cannot be challenged in India, the enforcement of the same in India can be validly objected to by the award debtor on grounds that are set out in Section 48 of the Act. The grounds for setting aside arbitral awards passed in domestic arbitrations and international commercial arbitrations seated in India under Section 34 of the Act and the grounds for refusing enforcement of foreign awards in India under Section 48 of the Act are substantially identical. One such ground is if the arbitral award is found to be contrary to the “public policy of India”.

Continue Reading Supreme Court’s judgment in Vijay Karia v. Prysmian Cavi e Sistemi S.r.l.: Impact on challenges to awards passed in International Commercial Arbitrations conducted in India

 

Change is inevitable. Growth is optional.

– John Maxwell

Covid-19 has seen the legal landscape leapfrog into digital courts, electronic filings and asynchronous video hearings. The change has been fundamental and deep deliberations are currently underway for the systemic adoption of a new normal. Such a material shift often facilitates rapid adoption of other innovations that were hitherto stuck at the threshold of a conservative mindset. We believe that Third Party Funding of litigation is one such legal innovation that will now come of age in India.

Continue Reading Cash constrained and need to litigate? Third Party Funding may be the solution

Introduction

The growth and diversification of businesses have led to an increase in white collar crimes. The term ‘white collar crime’ was first defined by Edwin Hardin Sutherland as crimes committed by persons who hold high societal status and repute in their profession. As the complexity of such crimes has grown over the years and investigations have become refined, we have seen an increase in private professional services offering support to companies and their management in dealing with white collar crimes.

These support services extend from providing an in-depth analysis of the crime to the management, carrying out forensic investigations into the affairs of the company, including audit and forensic diligence reports and preparing the company for legal proceedings. The need for internal private investigations has also increased as a result of strengthening of laws on compliances and reporting of white collar crimes. The allegations may vary from offences under the Indian Penal Code (such as fraud, cheating, forgery, etc.) to offences under offences under special statutes (such as money laundering, insider trading, corruption, etc.).

Continue Reading For or Against Forensic diligence when facing a White-Collar Investigation: Evidentiary Value

The provisions of the Companies Act, 2013 (the Act), and the rules framed thereunder, mandate companies to file requisite documents, including annual returns and financial statements, with the concerned Registrar of Companies (RoC) of their jurisdiction. Non-adherence to such provisions and non-filing of the requisite documents is an offence, exposing non-complaint companies and its directors to severe penal consequences, including fines and prosecution.

However, the records of the Ministry of Corporate Affairs (MCA) and the National Company Law Tribunals (NCLT) would clearly reveal that a lot of companies have been non-compliant with their filings. This non-compliance has been a menace to all the stakeholders involved, including, inter alia, (i) the companies and directors who have to face penal consequences for such non-compliances; (ii) the MCA and its administration who are engaged in the process of updating the records; (iii) the public/ shareholders who do not get access to the records of the companies; and (iv) the NCLT and the office of Regional Directors, which are burdened with compounding cases.

Continue Reading A Fresh Start for Companies

 

On June 08, 2020, the Reserve Bank of India (RBI) released two draft frameworks — one for securitisation of standard assets (Draft Securitisation Framework) and the other on sale of loan exposures (Draft Sale Framework). In our previous article (available here), we had dealt with key revisions introduced by the RBI under the Draft Securitisation Framework. This article contains a brief summary of the Draft Sale Framework.

The Draft Sale Framework is addressed to the same constituents as the Draft Securitisation Framework and is expected to operate as an umbrella framework, which will govern all loan transfers (standard and stressed assets).

The Draft Sale Framework is broadly divided into three parts viz., (i) general conditions applicable to all loan transfers; (ii) provisions dealing with sale and purchase of standard assets; and (iii) provisions dealing with sale and transfer of stressed assets (including purchase by ARCs).

Continue Reading RBI’s move to revamp loan transfers in India

 

To battle the ongoing COVID-19 pandemic, the central government and the various state governments imposed a nationwide lockdown in India. Additionally, to arrest the spread of the pandemic, government authorities and corporates are promoting “work from home”, and wherever necessary to work with minimum work force. Acknowledging the difficulties faced by corporates on account of the threat posed by COVID-19, requiring social distancing in day-to-day functioning, governmental authorities have granted various exemptions and reliefs by issuing circulars and amending rules to ease compliance requirements to be complied by companies.

This blog analyses the recent reliefs and relaxations announced by the Ministry of Corporate Affairs, Government of India (MCA), and the Securities and Exchange Board of India (SEBI), which may have an impact on financing transactions.

Continue Reading Social Distancing while approving financing transactions: MCA, SEBI Relaxations

The Reserve Bank of India (RBI) issued guidelines on February 01, 2006, in relation to securitisation of standard assets by banks, All India Term-Lending and Refinancing Institutions and non-banking financial companies (NBFCs). Securitisation was defined as the process by which assets are sold to bankruptcy remote special purpose vehicle (SPV) in return for immediate cash flow, wherein the cash flows from the underlying pool of assets are used to service the securities issued by the SPV[1]. The criteria for ‘true sale’ as well as the policy on provision of credit enhancement facilities, liquidity facilities and accounting treatment of such transactions was also set out. The guidelines did not separately deal with direct assignment of assets.

Continue Reading A new regime for Securitisation

Indian Insolvency Law responds to the COVID-19 Pandemic- Part-II

Introduction

On June 5, 2020, the President of India promulgated the Insolvency and Bankruptcy (Amendment) Ordinance, 2020 (“Ordinance”), in furtherance to the economic measures announced by the Ministry of Finance[1] to support Indian businesses impacted by the outbreak of the Covid-19 pandemic. The Ordinance has introduced the following amendments to the Insolvency and Bankruptcy Code, 2016 (“IBC”) (effective immediately):

  • Section 10A has been inserted in the IBC, restricting filing of any application for initiation of the corporate insolvency resolution process (“CIRP”) of a corporate debtor (being a company or a limited liability partnership) for any default[2] arising after March 25, 2020, for a period of six months or such further period, not exceeding one year from March 25, 2020, as may be notified in this behalf (such period being “Specified Period”).[3]

Further, a proviso has been inserted in section 10A to specify that no application shall ever be filed for initiation of CIRP of a corporate debtor for the said default occurring during the Specified Period i.e. CIRP can never be initiated on the basis of a default during the Specified Period, even if the default is continuing after having occurred during the Specified Period.

  • A non-obstante clause has been inserted in to section 66 (Fraudulent trading or wrongful trading) of the IBC to give protection to the directors of a corporate debtor. Accordingly, no application can be filed by a resolution professional under sub-section 66(2), in respect of such defaults against which initiation of CIRP is suspended under Section 10A of the IBC.[4]

Continue Reading Indian Insolvency Law responds to the COVID-19 Pandemic- Part-II

The Epidemic Ordinance, 2020 - An ‘opportune’ armour for the protectors

The world is grappling with an unknown virus that has escalated to a global pandemic in no time. At the very forefront of this battle against the unknown, are the medical healthcare professionals who have been working relentlessly to treat the rising number of patients across the globe, sometimes even without adequate protective gear[1]. Therefore, it is disheartening when one comes across news regarding them being subject to unprovoked violence from the public[2] in this time of crisis. The need to protect these frontline healthcare professionals was felt strongly by the Indian government in order to ensure seamless treatment of patients during the current pandemic. With these objectives in mind, the President of India on April 22, 2020, promulgated the Epidemic Diseases Amendment Ordinance 2020 (“Amendment Ordinance”), to amend the Epidemic Diseases Act, 1897 (“Epidemic Act”). Continue Reading The Epidemic Ordinance, 2020: An ‘opportune’ armour for the protectors?

unfettered right to exclude or limit their liability for breach of contract Part 2

 

In Part I of this post, we had discussed the concept of exclusion or limitation of liability clauses and the position in India. In this part, we will examine the position of such clauses in England and provide our views on such clauses. 

Position in England 

The application of clauses excluding or limiting liability in England is more consistent. When faced with standard form contracts or contracts where there is inequality of bargaining power, English courts apply the test of fairness or reasonableness of clauses in such contracts and refuse to enforce provisions of contracts that are unconscionable or exploitative.[1] Continue Reading Do parties have an unfettered right to exclude or limit their liability for breach of contract? – Part II