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June 2017

Corporate Amicus: May 2017

Article-1

Dawn of future watchdog for foreign investment in India: -

With the announcement of phase-wise abolition of Foreign Investment Promotion Board (FIPB), and of further liberalization of the FDI policy, it is almost certain that a greater role would be given to the Reserve Bank of India or to the concerned Ministries. According to the authors of the article in this issue of Corporate Amicus, it may be difficult to entrust individual Ministries with the role of the FIPB, and the National Security Council may be considered for a greater role in considering the effect of FDI on national security. Further, considering certain issues which may arise due to the disbandment of the FIPB, authors here suggest certain options, including enactment of a law on foreign investment promotion, in order to safeguard the interests of the country and its economy…

 

Article-2

Cross-border merger provisions notified: -

Ministry of Corporate Affairs has notified Section 234 of Companies Act, 2013 dealing with cross-border mergers, i.e. merger or amalgamation of an Indian company with a foreign company and vice-versa. Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 have also been amended in this regard to lay down the scope of application of Section 234. Second article in this issue of Amicus overs various intricacies of the provisions, including the Draft Foreign Exchange Management (Cross Border Merger) Regulations, 2017 released by RBI. It is believed that extensive amendments by the legislature and various regulators including the Insurance Regulatory and Development Authority, the RBI, tax authorities, are also required on numerous jurisdictional issues involved in cross-border mergers…

 

Notifications & Circulars

  • Voluntary liquidation process of a corporate person - Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017 notified
  • IBBI (Information Utilities) Regulations, 2017 to deal with registration and regulation of information utilities responsible for storage of financial information to help scrutinise defaults and verify claims in a speedy manner, notified
  • Merger control exemptions - Scope of combinations under Sections 5 and 6 of Competition Act which are eligible for exemption from seeking CCI approval, expanded
  • Banks permitted to invest in schemes of REITs and InVITs

 

Ratio decidendi

  • Date of listing of target company crucial in determining exemption from open offer obligations under Takeover Regulation 10(1)(a)(ii) – Securities Appellate Tribunal
  • Existence of “dispute” in terms of Section 8(2)(a) of Insolvency and Bankruptcy Code bars initiation of insolvency process – NCLT
  • Territorial jurisdiction of Court when seat of arbitration determined – Supreme Court holds that designation of seat of arbitration is akin to the exclusive jurisdiction clause
  • Alleged FEMA violation not a valid defence against enforcement of foreign arbitral award – Delhi High Court

 

May, 2017/Issue-68 May, 2017/Issue-68

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