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Invoking Arbitration Agreements in Unstamped Documents – Course Correction from the Garware Wall Ropes’ Judgment 

 

What happened in the Garware Wall Ropes’ Judgment?

In our earlier article,[1] we had discussed the decision of the Supreme Court in Garware Wall Ropes Ltd. v. Coastal Marine Construction & Engineering Ltd. (“Garware Judgment”).[2] We had remarked that much was left to be done to strike a balance between arbitration law, stamping law and the equitable rights of litigants. We had analysed how the Garware Judgment took a narrow view on invoking arbitration agreements in unstamped documents, in holding that an arbitration could not be invoked in case of an arbitration agreement forming a part of an unstamped document, until the defect of non-stamping was rectified. It held that before proceeding under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), the Court ought to impound the document and send it for collection of stamp duty dues. This also meant that neither the parties, nor the Court could appoint an arbitrator till the requisite stamp duty was paid. Continue Reading Invoking Arbitration Agreements in Unstamped Documents – Course Correction from the Garware Wall Ropes’ Judgment

The PMLA – is the net cast too wide

The Prevention of Money Laundering Act, 2002 (‘PMLA’) has undergone multiple amendments after it was brought into operation on July 1, 2005. Most recently, the PMLA was amended through the –

  • Finance Act, 2015 (‘2015 Amendment’)
  • Finance Act, 2018 (‘2018 Amendment’)
  • Finance Act, 2019 (‘2019 Amendment’)

These amendments aimed to plug loopholes in the operation of the PMLA – to strengthen the framework for tackling money laundering. In furtherance of this objective, the 2019 Amendment has clarified the definition of “proceeds of crime” under Section 2(1)(u). Amendments were also made to Section 45, following the Supreme Court’s decision in the Nikesh Tarachand Shah[1] case – which struck down the pre-conditions for bail prescribed under Section 45(1). Over the years, the list of “scheduled offences” under Schedule I of the PMLA has also been amended significantly. Another aspect that arises in many PMLA proceedings is the admissibility of statements made to investigating officers. Continue Reading The PMLA – is the net cast too wide?

WRITS AGAINST ORDERS PASSED BY ARBITRAL TRIBUNALS – THE SUPREME COURT REITERATES THE LAW SMM

 Introduction

Recently, a three-judge bench of the Supreme Court in Bhaven Construction v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd. and Anr[1] has observed that the High Courts’ power of interference under Articles 226[2] and 227[3] of the Constitution of India (“Constitution”), in the context of arbitral proceedings, may be exercised in ‘exceptional rarity’. Clarifying the term ‘exceptional rarity’, the Court pointed out that such interference would be warranted only in cases wherein a party is left remediless under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) or clear bad faith is shown by one of the parties. Continue Reading Writs Against Orders Passed by Arbitral Tribunals – The Supreme Court Reiterates the Law

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Time is of the essence for registration of a lease

INTRODUCTION

More often than not, the central procedural question on the minds of parties entering into a lease deed is whether the registration thereof is mandatory. This central query pervades the gamut of situations ranging from lease of residential to commercial properties, and from short-term to long-term leases.

The law governing registration of lease deeds is primarily contained in the Registration Act, 1908 (“Registration Act”) and the Transfer of Property Act, 1882 (“TOPA”). A lease of an immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised or of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms as defined in Section 105 of TOPA. According to the Registration Act, ‘lease includes a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease[1]’. Continue Reading Time is of the essence for registration of a lease

RBI’S REVISED REGULATORY FRAMEWORK FOR NBFCS

Introduction

In the backdrop of recent stress in the financial sector, especially in the speciality finance (i.e. NBFC) space, the Reserve Bank of India (“RBI”) has sought to address potential systemic risks by issuing a discussion paper on ‘Revised Regulatory Framework for NBFCs – A Scale-Based Approach’ (“Discussion Paper”) on January 22, 2021. The apex bank, through the Discussion Paper, has introduced a scale-based approach to the regulation of non-banking financial companies. Owing to their growing significance, linkages with the banking and capital markets sectors, and complexity in operations, the Discussion Paper proposes a four-tiered regulatory structure for NBFCs, based on proportionality of the NBFCs. Continue Reading FIG Papers (No. 2) : RBI’s Revised Regulatory Framework for NBFCs : Industry Implications

DECODING THE LAW ON ANTICIPATORY BAIL 

Introduction

“Under the law of nature, all men are born free, every one comes into the world with a right to his own person, which includes the liberty of moving and using it at his own will. This is what is called personal liberty and is given him by the author of nature, because necessary for his own sustenance.” – Thomas Jefferson

Personal liberty is a natural, vital and essential right of an individual, recognised as a fundamental right under Article 21[1] of the Constitution of India. This entitlement is a part of the inalienable basic structure of the Constitution of India. When an individual is suspected to have committed an offence (punishable under the law for the time being in force), the machinery of law is mandated to arrest them, bring them to trial and punish them if found guilty. Arrest deprives an individual of his personal liberty, and the act of securing bail usually sets him free. The concept of bail is inextricably linked to the right to personal liberty. The entitlement to secure bail flows from the provisions of Sections 436, 437 and 439 of the Code of Criminal Procedure, 1973 (“Code”), along with the facet of anticipatory bail, introduced thereto by the Law Commission’s 41st report. Continue Reading Decoding the Law on Anticipatory Bail

Supreme Court on the admissibility of electronic evidence under Section 65B of the Evidence Act.

The recent instances of leakage of Whatsapp chats obtained during the course of investigation and their admissibility as evidence in a criminal trial has brought the issue of electronic evidence to the forefront. These Whatsapp chats have been leaked in the public domain at the investigation stage itself, even before the commencement of the trial. Considering these recent developments, the legal framework for electronic evidence merits further scrutiny.

Under the Indian Evidence Act, 1872, Section 65B prescribes a distinct framework that governs the admissibility of electronic evidence. There have been multiple litigations over the scope and ambit of Section 65B, with divergent views taken by the Apex Court. Continue Reading Supreme Court on the admissibility of electronic evidence under Section 65B of the Evidence Act.

The Supreme Court Revisits the Consequences of Non-Payment of Stamp Duty on the Arbitration Agreement – Part I

In Part I of this post, we discussed the findings of the Court on the issue of separability of arbitration agreements from the underlying contract and the corresponding validity of arbitration agreements in unstamped agreements. In this part, we will analyse the findings of the Court with respect to arbitrability of disputes involving fraud; and issue of maintainability of writ petitions against orders passed under the Arbitration Act and provide our views on the Judgment.

Continue Reading The Supreme Court Revisits the Consequences of Non-Payment of Stamp Duty on the Arbitration Agreement – Part II

Takeover of Publicly Traded Companies - Flashback 2020

 India’s twin achievement of receiving the highest-ever FDI[1] and touching record highs at the bourses[2] occurred in the Financial Year 2020-2021. While the former came about in the first five months of the fiscal year (i.e. during the COVID-19 lockdown), the latter took place near the end of the calendar year 2020.

The year 2020 saw unprecedented business disruption due to the pandemic. Many Indian businesses were forced to reorganise and innovate to tackle the pandemic, which also resulted in revaluation of many firms by their acquirers. Cash rich and savvy investors took advantage of this unrivalled opportunity to make acquisitions and investments which is evident from the overall high deal activity in the calendar year 2020, especially in Q4. Continue Reading Takeover of Publicly Traded Companies: Flashback 2020

The Supreme Court Revisits the Consequences of Non-Payment of Stamp Duty on the Arbitration Agreement – Part I

Introduction

Recently, a three-judge bench of the Supreme Court in M/s N.N. Global Mercantile Pvt. Ltd. v. M/s Indo Unique Flame Ltd. & Others[1] has reiterated and clarified the law on the (i) doctrine of separability of arbitration agreements from the underlying contract; (ii) arbitrability of disputes involving fraud; and (iii) maintainability of a writ petition against orders passed under the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). Continue Reading The Supreme Court Revisits the Consequences of Non-Payment of Stamp Duty on the Arbitration Agreement – Part I