Insights Archives - Page 2 of 19

Climate Change and ESG Considerations in India’s AI-Driven Future

Insights | August 14, 2024 | Practice Area: Clean Energy, Corporate Governance and ESG, Regulatory, Technology; Media and Telecommunications

As AI continues to transform industries in crucial ways, the training of large AI models remains highly energy- and resource-intensive, resulting in significant emissions and waste.
For countries and companies which have ambitious net-zero goals, balancing AI ambitions with existing decarbonization strategies is important. As India accelerates its journey towards becoming a global economic powerhouse, it may want to address the environmental implications of increased AI deployment, including by regulating AI with the aim of making increased adoption sustainable. Where companies are concerned, investing in ‘green AI’ will not only benefit the environment but may also enhance their ESG profiles. Going forward, the integration of climate considerations into AI policy is likely to become an important element of responsible AI development.

Related Party Transactions: Recent SEBI Scrutiny

Insights | August 13, 2024 | Practice Area: Anti-corruption; Fraud and Investigations, Capital Markets, Regulatory

The Securities and Exchange Board of India (“SEBI”) has been continuously calibrating the disclosure requirements applicable to Indian listed companies to increase transparency and accessibility of information to investors. Provisions regulating related party transactions (“RPTs”), and appropriate disclosure of such transactions, are a step in that direction. This note discusses two recent SEBI actions against listed companies related to RPTs and highlights the need for listed companies to have a comprehensive policy on RPTs that suitably addresses any perceived gaps or ambiguities.

Direct Tax Vivad se Vishwas Scheme, 2024

Insights | August 12, 2024 | Practice Area: Tax

The pendency of litigation under the Income-tax Act, 1961 has been rising due to two key factors: increasing number of appeals and slow disposal of such appeals. To address this growing backlog and to build on the success of the previous Vivad se Vishwas Scheme, 2020, the government has proposed the Direct Tax Vivad se Vishwas Scheme, 2024 (“VSV Scheme, 2024”). This note provides an overview of the VSV Scheme 2024.

Regulatory Spotlight on Disclosure of Key Performance Indicators

Insights | August 8, 2024 | Practice Area: Capital Markets, Regulatory

The Securities and Exchange Board of India (“SEBI”) has increased its scrutiny of key performance indicators (“KPIs”) included in offer documents. Its focus is aimed at enhancing the transparency of pricing and the disclosure of performance, allowing IPO investors to obtain a clearer understanding of an issuer and its business. Given the focus on KPI disclosures, IPO-bound companies (regardless of the industry) must devote sufficient attention to identifying KPIs relevant to their business and understanding regulatory expectations in this regard.
This note provides an overview of the SEBI framework for disclosure of KPIs in offer documents.

Safeguarding Biodiversity or Mitigating the Impact of Climate Change: A Novel Dilemma

Insights | July 29, 2024 | Practice Area: Clean Energy, Corporate Governance and ESG, Projects; Infrastructure and Energy

In a landmark judgement delivered in March 2024, in MK Ranjitsingh & Others vs. Union of India & Others, the Supreme Court of India sought to balance two goals which it considered “equally crucial” – the conservation of a “critically endangered species”, the Great Indian Bustard, and the conservation of the environment.
The Supreme Court has proposed a way ahead to address the dilemma presented to it. Balanced and prompt follow up action will be critical to approach both biodiversity and climate goals in a meaningful way.

Investing in AI in India (Part 1): Key Considerations

Insights | July 23, 2024 | Practice Area: Data, Intellectual Property, Mergers and Acquisitions, Private Equity, Regulatory, Technology; Media and Telecommunications

While investments in the AI sector in India present significant opportunities, they also present a unique set of risks within an evolving legal and regulatory landscape.
Before making an investment decision, investors should consider IP issues, data-related rights and compliance, any industry-specific concerns, the then-applicable regulatory framework as well as potential developments in AI regulation. In addition, investors should evaluate operational and contractual arrangements, undertake a technical due diligence, and assess potential liabilities and risks. Such risks include product and professional liability, algorithmic bias and discrimination, cybersecurity and data breaches, market and reputational risks, along with concerns related to transparency and explainability.

How to Correctly Incorporate an Arbitration Clause by Reference: NBCC v. Zillion Infra

Insights | July 19, 2024 | Practice Area: General Corporate, Litigation and Arbitration

A robust arbitration clause is necessary to ensure an enforceable framework for dispute resolution in any contract. The recent decision of the Hon’ble Supreme Court of India in NBCC (India) Limited v. Zillion Infra Projects Pvt. Ltd. has clarified the critical difference between ‘reference to an arbitration clause’ and ‘incorporation of an arbitration clause’. The Supreme Court held that a mere reference to an arbitration clause does not bind the parties to arbitrate in case of a dispute. To bind the parties to arbitration, the reference should be such that the arbitration clause is incorporated in the agreement. Thus, it is crucial to understand how to correctly incorporate an arbitration clause by reference.
In this note, we analyze the aforesaid Supreme Court’s decision and set forth principles that emerge as best practices for incorporating an arbitration clause by reference.

Smooth Transitions: Navigating Succession in Business Transfers on Slump Sale Basis!

Insights | July 11, 2024 | Practice Area: Mergers and Acquisitions, Tax

Succession of a business, in simple words, implies a change in ownership of a business from one person (“the predecessor”) to another (“the successor”). Section 170 of the Act deals with the provisions relating to income tax liability in the case of succession of business pursuant to any business restructuring – transfer of business, amalgamation, demerger, etc. This note discusses the tax implications that may arise pursuant to succession of a business by way of slump sale.

Decoding Front Running Trades

Insights | July 10, 2024 | Practice Area: Anti-corruption; Fraud and Investigations, Capital Markets, Regulatory

Front running trades are trades where an investor has placed an order in a stock while in possession of “non-public information” of “a substantial impending transaction” in that stock. Such trades not only distort the level playing field in the securities market by taking advantage of unequal information acquired through unfair means but also affect market integrity. This note tracks the evolution of jurisprudence related to front running in India and highlights the interpretational challenges and evidentiary issues relating to front running trades.

Can Controlling Shareholders Influence the Votes of Public Shareholders? An Analysis of ‘Coerced Voting’ in an Indian Context

Insights | July 8, 2024 | Practice Area: Corporate Governance and ESG, General Corporate, Mergers and Acquisitions

“Coerced voting” as understood in the US context, refers to situations where controlling shareholders compel other public shareholders to vote in a predetermined manner in relation to a specific matter. This may potentially involve instances of bribing, offering incentives, or entry into arrangements to make them vote in a certain way. Such voting mechanisms inherently involve a level of influence exerted by the controlling shareholder.
This note considers “coerced voting” in an Indian context and reflects on the jurisprudence of Delaware courts in this regard.