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July 2019

Corporate Amicus: May 2019


Supreme Court restates law vis-à-vis an arbitrator’s power to grant interest
by Ankit Parhar

The Supreme Court has recently restated the law vis-à-vis an Arbitrator’s power to grant interest under the Arbitration and Conciliation Act, 1996 in a case where the contract contained clauses barring interest. Relying upon various judgments, the Supreme Court restated the position that under the 1996 Act, an Arbitrator would be within his jurisdiction to award pre-reference or pendente lite interest unless there is an agreement to the contrary. The Supreme Court held that the Arbitrators erred in relying upon the judgment in Board of Trustees for the Port of Calcutta which was under the 1940 Act. This judgment is the latest judgment in the line of judgments on an Arbitrator’s power to award interest. Though the position under the 1996 Act has been largely settled, the question of how a particular clause will be interpreted by an Arbitrator or Courts would still remain...


Issuance of shares with differential voting rights
by Tanushree Pande

DVRS are those shares in which equity shares are allotted to the shareholders, however the 1 (one) voting right per share rule is deviated. Deliberating on conditions for the issuance of DVRS in India, the second article in this issue of Corporate Amicus for the month of May 2019 states that DVRS if given a comprehensive glance, seems to be a perfect device for passive investors as it is an ideal investment strategy for those who want to earn more dividends without much painstaking. It is believed that absence of formal guidelines earlier was the biggest impediment on popularity of DVRS, but the Companies Act 2013 has cleared this confusion to a great extent. According to the author, the only remaining aspect for further strengthening these instruments is to carry out corresponding amendments to the provisions of the Companies Act, SEBI ICDR Regulations, Securities Contract (Regulation) Rules, SEBI Takeover Code, SEBI Buy Back Regulations and SEBI Delisting Regulations and other related regulations pursuant to clarity received from SEBI...

Notifications and Circulars

  • Manufacturing activities by Limited Liability Partnership – MCA removes restriction on LLPs to engage in manufacturing and allied activities
  • Determination of allotment and trading lot size for Real Estate Investment Trusts and Infrastructure Investment Trusts
  • Opening of foreign currency accounts by re-insurance and composite insurance brokers

Ratio Decidendi

  • Court cannot appoint arbitrator when the contract containing arbitration clause is insufficiently stamped – Supreme Court
  • Shareholders can file application to approve settlement with creditors even after appointment of Official Liquidator – NCLAT

News Nuggets

  • Last date for filing form ACTIVE postponed till 15-6-2019
  • Foreign Portfolio Investors allowed investment in municipal bonds
  • IBC – Trade Union can be considered as an operational creditor
  • High Court can appoint arbitrator as per Articles 4 and 6 of UNICTRAL Rules
  • Person ineligible to act as arbitrator cannot appoint another arbitrator
  • Certain provisions of Competition Act held unconstitutional – Court directs CCI to formulate regulations
  • RBI Circular triggering IBC on debtors in general, declared ultra vires

May, 2019/Issue-92 May, 2019/Issue-92

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