India | 01 July 2013

In the recent case of State of Orissav M/s Mesco Steels Ltd (decided on 6 March 2013), the Supreme Court examined the question of whether a writ petition (initiated under Article 226 of the Constitution of India) filed by the respondent company against the state government of Orissa was premature, inasmuch as the same was filed against an interdepartmental communication that did not finally determine any right or obligation inter 
se the parties. 
 [Continue Reading]

India | 01 June 2013

‘The dangers of life are infinite, and among them is safety’ – Goethe.

The Securities and Exchange Board of India (SEBI) issued a discussion paper on the ‘mandatory safety net mechanism’ in September 2012 (the SEBI discussion paper), inviting public comments. Briefly, this contemplates a mechanism wherein, in the event of a fall in share price within a specified period subsequent to listing, retail investors are able to tender back their shares purchased in an initial public offering (IPO), at the issue price, to the designated safety net provider. [Continue Reading]

India | 01 May 2013

In the case of JP Vishnu Kumar v Canara Bank PN Road, Tiruppur & ors [2013], the Honourable Supreme Court of India had recently held that powers of the High Court under Article 2261 of the Constitution of India cannot be invoked in the matter of recovery of dues under the Recovery of Debts Due to Banks and Financial Institutions Act 1993 (the 1993 Act) unless there is any statutory violation resulting in prejudice to the party or where proceedings under the Act are wholly arbitrary, unreasonable and unfair. [Continue Reading]

India | 01 April 2013

Arbitration, because of its nearly unfettered right of party autonomy, has become the agreed mode of dispute resolution between parties involved in commercial transactions. In India, arbitration laws underwent a marked change with the enactment of the Arbitration and Conciliation Act 1996 (the 1996 Act) that strove to bring speed, efficacy, informality and party autonomy into dispute resolution by way of arbitration.
 [Continue Reading]

India | 01 March 2013

The non-banking financial sector in India is regulated by the Reserve Bank of India (RBI). The RBI had set up a working group under the chairmanship of Usha Thorat, to review the regulatory framework for non-banking financial companies (NBFCs). The working group submitted its report in August 2011, suggesting certain amendments to the regulatory framework governing NBFCs. The RBI released the new draft guidelines for NBFCs based on the Usha Thorat Committee report on 12 December 2012 and has sought public comments on them.
 [Continue Reading]

India | 26 February 2013

The concept of an incorporated company having a separate existence and the law recognising it as a legal person separate and distinct from its members/shareholders was first recognised in the case of Saloman v Saloman & Co Ltd [1897]. Consequently, the legal framework pertaining to a company’s operations and obligations acknowledges separate legal existence as a key feature of the company structure. Lifting or piercing the veil of corporate personality means that the company is no longer viewed as a distinct entity. On the other hand, the company is seen as being no different from the persons who own the shareholding of the company. Simply stated, by applying the doctrine of ‘piercing the corporate veil’, courts disregard the separate corporate existence of the company and fix liability on the directors or other officers of the company as the case may be.
 [Continue Reading]

Insurance | 01 December 2012

In 2005, India was the ‘go to’ destination for conducting clinical trials. However, recent articles indicate that, since then, the growth trajectory of the clinical trials industry 
in India has suffered due to the lack of clarity in the regulatory framework governing these trials.

In order to resolve the ambiguity under the current regime and to meet the increasing demand of the industry for monitoring of clinical trials, the government of India is in the process of reforming the regulatory procedures on clinical trials.
 [Continue Reading]

Corporate & Commercial | 01 November 2012

Bharat Aluminum Company v Kaiser Aluminum Technical Services, Inc [2005] (the Balco judgment) concluding that the Indian courts would not have jurisdiction with respect to arbitrations with ‘seat outside India’, either for the purposes of granting interim relief or with respect to entertaining a challenge to foreign arbitral awards in India.

With this decision, the Supreme Court of India has revisited the permissible extent of judicial intervention in foreign arbitrations and reinforced the fundamental principles of territoriality and party autonomy. Moreover, it has given credence to the Statement of Objects and Reasons of the Arbitration and Conciliation Act 1996 (the 1996 Act), one of the objectives of which is ‘to minimise the supervisory role of courts in the arbitral process’.
 [Continue Reading]

Corporate & Commercial | 01 October 2012

The Indian central bank – the Reserve Bank of India (RBI) – is committed to implementing the Basel III norms in a phased manner in India, commencing from 1 January 2013, with Indian banks being required to comply fully with the new capital adequacy norms by 31 March 2018. Like elsewhere across the globe, banks in India will face several challenges in complying with these new norms, with the principal one being the raising of additional capital. In its annual report published on 23 August 2012, the RBI disclosed its estimate of the additional capital that is likely to be required.

The numbers are staggering – the public sector banks alone would require equity capital of about 1.4-1.5 trillion rupees on top of internal accruals, in addition to 2.65-2.75 trillion rupees in the form of non-equity capital. For major private sector banks the estimated requirement is new equity capital to the tune of 200-250bn rupees on top of internal accruals, in addition to 500-600bn rupees of non-equity capital. 
 [Continue Reading]