Dispute resolution

The Companies Act, 2013 (“Act”) stands as a cornerstone of corporate regulation in India. It lays down a comprehensive compliance framework for body corporates as well as their officers to protect the rights and interests of shareholders and investors. In the first part of this two-part blog series, we seek to address the ambiguities pertaining to proactive rectifications of the non-compliances and contraventions under the Act. In the second blog, we will discuss the threshold for liability of “officers in default” under the Act.Continue Reading Ambiguities in Regulatory Thresholds for Rectifying Breaches under the Companies Act, 2013

Law Governing Arbitration Agreement: Which Way are Indian Courts Headed?

The process and outcome of arbitration is largely governed by the following laws: (a) law governing the contract referring to the substantive law that parties choose to govern the main contract and any disputes arising thereunder; (b) law governing the arbitration agreement referring to the law that parties choose to govern arbitration agreement (it governs issues like validity, arbitrability, etc.); (c) law governing conduct of arbitral proceedings and forum for related court proceedings (i.e. law of the seat) and (d) Institutional rules (if chosen), governing the form and procedure of arbitration.Continue Reading Law Governing Arbitration Agreement: Which Way are Indian Courts Headed?

Blacklisting – A Proportionate Sanction or a Corporate Exile?

The Supreme Court on August 7, 2024, in The Blue Dreamz Advertising Pvt. Ltd. & Anr. v. Kolkata Municipal Corporation & Ors.[1] rendered a significant judgment in assessing the validity of a debarment or a blacklisting order. The court reiterated its position that invoking debarment in ordinary cases of breach of contract where there is a bona fide dispute, is not permissible.Continue Reading Blacklisting – A Proportionate Sanction or a Corporate Exile?

Can damages be awarded based on a guess?

A division bench of the Delhi High Court in Cobra Instalaciones Y Servicios, S.A. & Shyam Indus Power Solution Pvt Ltd. v. Haryana Vidyut Prasaran Nigam Ltd. (“HVPNL”)[1] (“Cobra Case”)upheld the quantification of damages by an arbitrator through “honest guesswork” or a “rough and ready method” since it was difficult to quantify the precise amount of loss suffered by the party.

In this blog, we examine the rough and ready approach under Indian law for quantifying damages.Continue Reading Can damages be awarded based on a guess?

Arbitrability of Disputes: Indian Jurisprudence

[Continued from Part I]

The Vidya Drolia Case: Redefining Arbitrability

In 2019, aiming to solve the conundrum and marking a significant milestone in Indian arbitration, the Supreme Court’s ruling in Vidya Drolia and Ors v. Durga Trading Corporation,[1] (“Vidya Drolia”) laid down the contours of arbitrability. While analysing thearbitrability of Landlord-Tenant disputes governed by the Transfer of Property Act, 1882 (“TPA”), the Supreme Court elucidated that the mere existence of a special statute dealing with certain disputes does not ipso facto render them non-arbitrable, thereby widening the scope of arbitrability and increasing the access to arbitration in complex legal contexts. Continue Reading Arbitrability of Disputes: Indian Jurisprudence (Part 2)

Arbitrability of Disputes: Indian Jurisprudence [Part I]

Introduction

Arbitrability plays a pivotal role in dispute resolution, determining if a particular dispute can be resolved through arbitration. Several key factors, including, among other things, procedural/curial laws, governing law and actual text of the arbitral agreements, identity of the parties, etc., help establish arbitrability.[1] Continue Reading Arbitrability of Disputes: Indian Jurisprudence [Part I]

SEBI’s efforts to curtail front running: Increasing onus on Asset Management Companies

The Securities and Exchange Board of India (“SEBI”) in its 205th board meeting[1] held on April 30, 2024, has approved amendments to the SEBI (Mutual Funds) Regulations, 1996 (“MF Regulations”), to enhance the existing regulatory framework for Asset Management Companies (“AMCs”) for facilitating identification and deterrence of potential market abuse, including front running[2]. As part of the said decision, detailed in its press release dated April 30, 2024, AMCs would be required to put in place an appropriate institutional mechanism, consisting of enhanced surveillance systems, internal control procedures and escalation processes to identify, monitor and address various types of misconduct. Additionally, SEBI’s Board has approved amendments in the relevant regulations to enhance responsibility and accountability of the management of AMCs for the said institutional mechanism and also for AMCs to put in place a whistle-blower mechanism.Continue Reading SEBI’s efforts to curtail front running: Increasing onus on Asset Management Companies

ED cannot arrest accused once cognizance is taken by the Special Court under PMLA: Supreme Court

Introduction:

In Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office,[1] the bench comprising Justices Abhay S. Oka and Ujjal Bhuyan of the Supreme Court (“SC”) held on (i) the Enforcement Directorate’s (“ED”) powers of arrest under Section 19 of the Prevention of Money Laundering Act, 2002[2] (“PMLA”), once cognizance is taken of a PMLA complaint under Section 44(1)(b) of the PMLA,[3] and (ii) the applicability of the twin conditions of bail under Section 45 of the PMLA[4] in instances where the accused has furnished a bond in accordance with Section 88 of the Code of Criminal Procedure, 1973[5] (“CrPC”), for appearance in court following summons. In this significant decision, the SC essentially addresses the extent of the ED’s powers of arrest and applicability of the stringent twin conditions of bail under Section 45 of the PMLA once the Special Court has taken cognizance of a complaint under Section 44 of the PMLA.Continue Reading ED cannot arrest accused once cognizance is taken by the Special Court under PMLA: Supreme Court

Protection Laws for alleged deficiency in services

Introduction

An important question on whether advocates are liable for alleged deficiency in services under the Indian Consumer Protection Act has been put to rest by the Hon’ble Supreme Court of India. In a significant ruling, the Hon’ble Supreme Court, vide its recent judgment in Bar of Indian Lawyers v D.K. Gandhi PS National Institute of Communicable Diseases and Anr.[1],has held that advocates would not be covered under the ambit of Consumer Protection Act, 1986 (“CPA 1986”), as re-enacted by the Consumer Protection Act 2019 (“CPA 2019”) (‘collectively referred as Acts/ consumer law framework’). Until the said decision, there was no definite pronouncement on the concerned issue.Continue Reading Advocates no longer liable under Consumer Protection Laws for alleged deficiency in services

Earlier clause prevails over subsequent clause in case of repugnancy: Supreme Court

Introduction

The Hon’ble Supreme Court vide its recent judgment in Bharat Sher Singh Kalsia v. State of Bihar & Anr.[1] adjudicated inter alia upon repugnancy in clauses when construing/ interpreting a deed or a contract. It was categorically held that where the earlier and later clause of a deed cannot be reconciled, the earlier clause would prevail over the later clause in accordance with themaxim of ut res magis valeat quam pereat[2].Continue Reading Earlier clause prevails over subsequent clause in case of repugnancy: Supreme Court