01 January 0001

Corporate Amicus: January 2019

Diagnosing the issues of E-pharmacies
by Ahalya Chalasanil

At present, sale of drugs in India is regulated by Drugs and Cosmetics Act, 1940 & Drugs and Cosmetics Rules, 1945 which governs the offline sale of drugs but do not prescribe any specific regulations for online sale. The latest judgments of Delhi and Madras High Courts, imposing a ban on E-pharmacies, are due to the imminent risks posed by such pharmacies in the absence of proper regulation. There are challenges such as difficulty to monitor the number of times drugs are ordered through a single prescription. Further, minors and children can also order drugs online. Based on the recommendations of the Sub-Committee constituted by the Drugs Consultative Committee, the Draft E-pharmacy Rules, 2018 were notified by the Ministry of Health and Family Welfare recently. The first article in this newsletter hence analyses the various issues associated with E-pharmacies while giving an overview of Draft E-pharmacy Rules, 2018. It draws parallel between India, Europe and United States of America in relation to E-pharmacy regulations…

Liquidated damages in share purchase agreements
by Anurag Pareek

The second article in this issue of Amicus deals with the Liquidated Damages (LDs) which are pre-estimated sum to be paid as compensation in the event of breach of contract under Section 74 of the Indian Contract Act, 1872. Any amount which is extravagantly and excessively high, greater than the possible amount of LDs that could be foreseen at the time of drafting of the contract, is taken to be a penalty clause. While there is no precise formula to distinguish penalty from LDs, the court upon taking into consideration the terms of the contract and the reasonability of the stipulated sum claimed as damages may make subjective awards. When such computation or proof of the precise damage is impossible for the court, the amount stipulated in the contract, if it is not unreasonable or penal in nature can be awarded by the court. LD provisions, therefore, act as a sort of limited insurance for the parties to a Share Purchase Agreement (SPA)…

Notifications and Circulars

  • SEBI issues clarification on clubbing of investment limits of Foreign Portfolio Investors: SEBI lays down norms for transfer of securities in physical mode
  • Disclosure of significant beneficial ownership in the shareholding pattern of listed entities
  • Insolvency Professionals to act as Interim Resolution Professionals, and Liquidators (Recommendation) (Second) Guidelines, 2018
  • Fund raising by issuance of debt securities by large entities

Ratio decidendi

  • CCI not required to seek assistance from experts or affected parties before giving instructions to DG to carry out investigation in any matter

News Nuggets

  • Arbitration – Rajasthan High Court clarifies on arbitrator’s defacto inability to perform
  • Insolvency proceedings can be initiated against ‘corporate guarantor’
  • Illegality of deed leading to default not to be challenged under I&B Code
  • Arbitration – 5th Schedule restricts only present employees for arbitrator
  • Competition - Director can be proceeded against on violation of Sections 3 & 4

January, 2019/Issue-88 January, 2019/Issue-88

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