Even after the ‘right to property’ was abolished as a fundamental right by the 44th Amendment to our Constitution[1], it has continued as a ‘constitutional right’ by virtue of Article 300-A, which provides that – “No person shall be deprived of his property save by authority of law”.Continue Reading Disenfranchising Majority Shareholders – Is it Constitutionally Valid?
The legal position with respect to enforceability of put option clauses has not been a glorious chapter in the history of India’s securities law. The genesis of this vexed issue lies in – (i) the erstwhile Section 20 of the Securities Contracts (Regulation) Act, 1956 (“SCRA”) which had provided that all options in securities shall be illegal[1]; and (ii) a notification issued by the Ministry of Finance in 1969, which inter alia provided that any contract for sale or purchase of securities, other than such spot delivery contract or contract for cash or hand delivery or special delivery in any securities shall be prohibited[2] (“1969 Notification”).Continue Reading Enforceability of Put Options under SCRA – Bombay HC’s latest judgment finally clears the air!
SEBI[1] has recently revised the materiality threshold for obtaining shareholder approval for related party transactions (“RPTs”) under Regulation 23(1) of the SEBI (LODR) Regulations, 2015 (“LODR”), to cover RPTs that exceed INR 1000 crore or 10% of a listed entity’s annual consolidated turnover (as per the last audited financial statements), whichever is lower.
The revised materiality threshold has come into effect on April 1, 2022, and this change assumes significance, as prior to April 1, 2022, there was no absolute numerical threshold for RPTs that require shareholders’ approval.
This also raises the question as to whether an absolute numerical threshold of INR 1000 crore could potentially be considered as violative of Article 14 of the Indian Constitution.
In this post, the authors aim to probe deeper into this constitutional aspect and examine some of the arguments that can be made from both sides of the spectrum.Continue Reading Revised threshold of Rs. 1000 Crore for ‘material’ RPTs under LODR – Does it pass the Article 14 test?
One of the quintessential features of an arbitration friendly jurisdiction is a robust award enforcement mechanism. Often such enforcement mechanisms are determined by the interpretation of ‘public policy’ of each jurisdiction. In India, the trajectory of public policy has witnessed dramatic advancements, resulting in a much narrower scope and ambit of interpretation. Consequently, Indian courts have adopted a pro-enforcement stance and this pattern can be observed even in the arbitral awards that have been passed in disputes relating to exchange control laws and securities regulations.Continue Reading Enforcement of a Foreign Arbitral Award: Calcutta High Court Contextualises Fundamental Policy of Indian Law