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Startup

Introduction

With nearly 82,000 start-ups and 107 unicorns, India is a significant player in the start-up ecosystem, putting it on the third spot globally.[1] In recognition of the value such start-ups add to a nation’s economy in terms of capital formation and employment opportunities, the Government of India (“GoI”) has launched multiple schemes such as Fund of Funds for Start-ups[2], Start-up India Seed Fund Scheme[3], etc. The GoI has committed funds to the extent of INR 7,385 crore for the start-ups at various stages under these schemes.

Continue Reading Incentives for Start-Ups in Gujarat

 

Corporate Defamation: A Perspective on Analyst Reports

In 2008, Bank Atlantic, a Florida based bank, sued a prominent Wall Street analyst over a report on potential bank failures titled “Who’s Next?” The Bank stated that the analyst had defamed the bank by suggesting that it might fail. Bank Atlantic had previously sued ABC over a news report in 1991. In 2009, Hertz Global Holdings Inc., sued an analyst for defamation over a report that Hertz claimed, suggests that the world’s largest car rental company could go bankrupt.

Continue Reading Corporate Defamation: A Perspective on Analyst Reports

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Enforcement of Arbitration Awards via Insolvency Proceedings - A Contrary Perspective

As the Insolvency regime in India builds its new course under the Insolvency and Bankruptcy Code, 2016 (‘Insolvency Code’), numerous issues of application have arisen and will continue to grapple the corridors of the insolvency courts. One of the concerns is the interaction between debt enforcement/ execution procedures and the Insolvency Code. Insolvency Code allows operational creditors to initiate insolvency proceedings against a debtor, with a valid proof of undisputed claim. Form 5 of the IBBI (Application to Adjudication Authority) Rules, 2016, under which an Operational Creditor makes an application for initiation of insolvency process, considers a court decree or an arbitration award adjudicating on the default as a valid evidence of default to support insolvency commencement. The all-encompassing term ‘Arbitration Award’ includes both domestic awards and foreign awards. While the domestic awards are per se enforceable before the civil courts, unless stayed in a challenge before the court, and no distinct process for enforcement needs to be complied with under the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’), foreign awards must follow a procedure of recognition, prior to being considered as enforceable before Indian courts. The Rules, however, shed no light on issues such as, at what stage the arbitration awards are eligible to be presented before the insolvency courts for insolvency commencement. Continue Reading Enforcement of Arbitration Awards via Insolvency Proceedings: A Contrary Perspective

Rights of Suspended Board - Vijay Kumar Jain v. Standard Chartered Bank

 

Upon commencement of the resolution process under the Insolvency and Bankruptcy Code, 2016 (Code), powers of the Board of Directors of the company stand suspended and are vested in and exercised by the resolution professional. While the directors are entitled to attend the meetings of the committee of creditors (COC) formed for the company, such directors have no voting rights.

A question arose over whether the directors should be given copies of the resolution plans and other confidential documents that the COC considers during the meetings. Sharing of such documents could be seen as in direct conflict with the obligations of the resolution professional to maintain confidentiality under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and other related regulations. More importantly, it could create positions of conflict between the suspended Board, who often submit resolution plans or are applicants under Section 12A, and the other participants. The Hon’ble Supreme Court in its recent judgment in Vijay Kumar Jain v. Standard Chartered Bank and Others[1] has, with great respect, left some questions unanswered. Continue Reading Supreme Court on the Rights of Suspended Board in Vijay Kumar Jain v. Standard Chartered Bank: Some Implications