Can Two Indian Parties choose foreign law to govern their arbitration agreement - The Delhi High Court answers in the Affirmative

Introduction:

Recognising that an arbitration agreement between parties is an agreement independent of the substantive contract, the Delhi High Court in Dholi Spintex Pvt. Ltd. v. Louis Dreyfus Company India Pvt. Ltd.[1] has held that two Indian parties can choose a foreign law as the law governing the arbitration between them. The Court has also reiterated the legal position on limited interference by Courts in international arbitrations. Continue Reading Can Two Indian Parties choose foreign law to govern their arbitration agreement? The Delhi High Court answers in the Affirmative

RERA or Consumer Fora – Homebuyers can make the choice!

Can allottees approach Consumer Forum under the Consumer Protection Act, 1986[1] (the “CP Act”), despite the remedies available under the Real Estate (Regulation and Development) Act, 2016 (the “RERA”), if they don’t want to take a recourse under the latter? This question was long debated and the Supreme Court of India (“Supreme Court”) finally answered it in the case of Imperial Structures Limited v. Surinder Anil Patni and Another[2]. The Supreme Court held that the RERA does not bar the jurisdiction of the CP Act to deal with the complaints filed by consumers who are homebuyers or allottees of real estate projects registered under RERA. While this finding may create more challenges and complexities, such as parallel litigations and claims initiated under both RERA and CP Act, we will analyse the rationale behind this judgment. Continue Reading RERA or Consumer Fora?  – Homebuyers can make the choice!

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Anti-Arbitration Injunctions - Judicial trends and finding the middle path

An Anti-Arbitration Injunction (“AAI”) is an injunction granted by courts to restrain parties or an arbitral tribunal from either commencing or continuing with arbitration proceedings.[1]  An AAI is generally sought before an arbitration commences or in the course of the arbitration hearing or after the conclusion of substantive hearing but before the rendering of final award.

Continue Reading Anti-Arbitration Injunctions: Judicial trends and finding the middle path

Emergency Awards passed in Foreign-seated Arbitration - Enforceable or not

A recent award passed by an Emergency Arbitrator at the instance of Amazon.com NV Investment Holdings in relation to Reliance Retail Ventures Limited’s (RRVL) ongoing acquisition of Future Group’s retail, wholesale, logistics, and warehousing arm, has once again brought into sharp focus a gap in India’s aspirations to improve Ease of Doing Business in the country and create a conducive environment for enforcement of awards passed in foreign seated arbitrations.

Although the said Emergency Award directed Future Group to maintain status quo with regard to the transaction[1], recent news reports have confirmed that Future Group has already approached the Hon’ble Delhi High Court by way of a suit seeking to restrain Amazon from preventing the ₹24,713 crore deal from going through.[2] Continue Reading Emergency Awards passed in Foreign-seated Arbitration: Enforceable or not ?

Lenders as Promoters under RERA regime - Analysing Haryana Real Estate Regulation Authority’s recent Order in Supertech Hues case

Introduction

The Haryana Real Estate Regulation Authority (“HRERA”) has recently delivered an unprecedented order in the matter of Deepak Chowdhary Vs PNB Housing Finance Ltd. & Ors. (“Supertech Hues case/ Order”)[1]. This Order will have implications on banks and other financial institutions, which provide credit to real estate companies, while also bringing into focus, the conflict between the rights of such banks and financial institutions vis-à-vis the rights of allottees of such projects. Despite the Real Estate (Regulation and Development) Act, 2016 (“RERA/Act”), contemplating mortgage loans to be the “first funders” of a real estate project[2], the HRERA has passed an order, which may have implications on secured lenders when it comes to exercising their rights to enforce their security. Continue Reading Lenders as Promoters under RERA regime: Analysing Haryana Real Estate Regulation Authority’s recent Order in Supertech Hues case

GOI Notification of 12th November on Digital Media - The Beginning of the Regulatory Journey for the Digital Space?

On November 09, 2020, the President of India issued a notification under Article 77(3) of the Constitution amending the Govt of India (Allocation of Business) Rules, 1961, according to which the Information & Broadcasting  Ministry (“I&B Ministry”) will now have the power to regulate and formulate policies, issue orders, instructions, notifications etc., pertaining to online news portals and content on Over the Top (“OTT”) platforms such as Netflix, Amazon Prime Video, Hotstar and many more (“Notification”). Continue Reading GOI Notification of 9th November on Digital Media – The Beginning of the Regulatory Journey for the Digital Space?

Vicarious Liability of Non-Executive Directors - A Case for Reform of Law

Context:

The vicarious liability provisions have been evolving ever since the evolution of law of torts. “Offence by companies” is a standard vicarious liability provision in most statutes, which is often used to fasten the liability on directors for the acts and omissions of the company. These vicarious liability provisions are borrowed from colonial-era laws and incorporated in our domestic legislations. As a rule, there is no concept of vicarious liability in criminal law. Such provisions imposing liability on directors for acts/ omissions of the company are present in most statutes.

The vicarious liability provisions have a standard language providing that the person-in-charge of and responsible for the conduct of the business of the company at the time of the commission of the offence, as well as other officers are liable for that offence. However, those provisions do not make a distinction between Managing Directors (“MDs”)/ Executive Directors (“EDs”) and Non-Executive Directors (“NEDs”)/ Independent Directors (“IDs”). Continue Reading Vicarious Liability of Non-Executive Directors: A Case for Reform of Law

Arm’s Length Pricing -Navigational Tools for the Audit Committee

India has one of the most detailed set of laws and regulations governing disclosures and approvals of related party transactions (RPT) regulating both listed and unlisted companies. The provisions of Section 188 of the Companies Act, 2013 (the Act) are applicable if:

  1. a company enters into a transaction with a ‘related party’ as defined under Section 2(76) of the Act;
  2. such transaction falls under any of the categories specified under sub-clause (a) to (g) of Section 188(1) of the Act, an approval of the board of directors will be required prior to entering into such transaction; and
  3. such transaction exceeds the monetary thresholds prescribed under Rule 15(3) of the Companies (Meeting of Board and its Powers) Rules, 2014, prior approval of the shareholders will also be required by way of an ordinary resolution.

Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR) provides that all material RPTs require shareholder approval through an ordinary resolution and no related party entity shall vote to approve such resolutions whether the entity is a related party to the particular transaction or not. However, all RPTs, whether material or not, require approval of the audit committee. Continue Reading Arm’s Length Pricing -Navigational Tools for the Audit Committee

Does an Arbitration Clause survive Novation of an Agreement 

Introduction:

Recently in Sanjiv Prakash v. Seema Kukreja & Ors.[1], the Delhi High Court has reiterated that novation of an agreement would necessarily result in destruction of the arbitration clause contained therein. In this regard, it was observed that an arbitration agreement being a creation of an agreement may be destroyed by agreement.

Facts of the case:

Respondent No. 3 had incorporated a company in 1971, under the name of Asian Films Laboratories Private Limited, which was subsequently renamed as ANI Media Private Limited in 1997 (“Company”). The shareholders of the said Company were Respondent No. 3’s son (“Petitioner”) and his daughter and wife (“Respondent No. 1” and “Respondent No. 2” respectively) (Petitioner and Respondents together hereinafter referred to as the “Family”). The Petitioner was the Managing Director of the Company. In 1996, Thomson Reuters Corporation Pte. Limited (“Reuters”) approached the Petitioner for a long-term equity investment in the Company on the condition that the Petitioner would play an active role in the management of the Company. Continue Reading Does an Arbitration Clause survive Novation of an Agreement?

Bureaucratic delay - No more a ground for seeking condonation of delay by State and public bodies

“… if the Government machinery is so inefficient and incapable of filing appeals/ petitions in time, the solution may lie in requesting the Legislature to expand the time period for filing limitation for Government authorities because of their gross incompetence. That is not so. Till the Statute subsists, the appeals/petitions have to be filed as per the Statues prescribed.”[1]

The recent pronouncement of the Supreme Court, a bench comprising of Hon’ble Mr. Justice Sanjay Kishan Kaul and Hon’ble Mr. Justice Dinesh Maheshwari, in State of Madhya Pradesh v. Bherulal, [2] has come straight from the shoulder. The Court has unequivocally reiterated that the government departments are under a special obligation to ensure that they perform their duties with diligence and commitment. Condoning delay is an exception and should not be used as an anticipated benefit for government departments. The Supreme Court has emphasised that the law shelters everyone under the same light and should not be swirled for the benefit of a few. Continue Reading Bureaucratic delay: No more a ground for seeking condonation of delay by State and public bodies?