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July 2018

Corporate Amicus: May 2018

by Akshita Alok

Making specific performance the rule; not the exception

Specific Reliefs (Amendment) Bill, 2017 proposing to amend several provisions of the Specific Reliefs Act, 1963 has been passed by the Lok Sabha. The Bill seeks to allow damages only as an exceptional remedy in the event of a breach of contract. Considering the various proposed amendments, it is felt that the Bill is yet another change towards increasing “ease of doing business” in India by taking away the discretionary power of courts in enforcing specific remedies and limiting the circumstances in which damages may be awarded to the aggrieved party. Further, once the Bill becomes effective, commonly sought remedy of injunction may only be sparingly awarded by the courts in case of an infrastructure project. The Bill is a welcome change and can be expected to take up India’s contract enforceability position a few notches higher, however, it remains to be seen how the litigators and courts react to the same, once the amendments come into force...

 

Cross-border Mergers – Analysis of FEMA provisions

RBI recently notified Foreign Exchange Management (Cross Border Merger) Regulations, 2018 for mergers, amalgamation and arrangement between Indian and foreign companies. Defining “inbound merger” and “outbound merger”, the new provisions lay down procedures for such cross-border mergers. The Regulations are a welcome step in providing clarity to the extant regulatory regime and enabling corporate houses abroad to plan their businesses more effectively thereby giving an impetus to the M&A activity in the country. However, it may be noted that definition of a “Foreign Company” in these Regulations acts as a double-edged sword resulting in dual applicability of permitted jurisdictions under Rule 25A of the Compromises Rules as well as these Regulations...

 

Notifications and Circulars

  • Companies (Share Capital and Debentures) Amendment Rules, 2018 notified to remove inconsistencies between Section 46 of Companies Act and Rule 5(3) of Companies (Share Capital and Debentures) Rules, 2014
  • SEBI (Infrastructure Investment Trusts) (Amendment) Regulations, 2018 issued in order to encourage more investment opportunities in infrastructure investment trusts (“InvITs”).
  • SEBI (Real Estate Investment Trusts) (Amendment) Regulations, 2018 issued in order to encourage more investment opportunities in real estate investment trusts (“REITs”).
  • Performance disclosure post consolidation/ Merger of Schemes – SEBI clarifies

 

Ratio decidendi

  • Resolution plan not materialised within time frame – NCLT, Allahabad allows liquidation of corporate debtor
  • Application for initiation of CIRP not maintainable when winding up proceedings initiated by High Court – NCLAT

 

May, 2018/Issue-80 May, 2018/Issue-80

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