Welcome to the second edition of the “Namaste Korea” newsletter. This newsletter provides an overview of the latest business/trade news and developments in Indian law and practice which are relevant to Korean businesses and other organizations with India-related interests. The newsletter also includes sector-specific updates, including in telecom, electronics, semiconductors, automotive, financial services, gaming, and healthcare.
The Karnataka High Court (“Court”), in its judgement dated September 30, 2024 in Ms. X v. Internal Complaints Committee, ANI Technologies Private Limited and Ors., held that the relationship between ANI Technologies Private Limited (“OLA”) and its driver subscribers was an employer-employee relationship for purposes of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”) and such driver subscribers could not be considered as independent contractors.
The judgement, which closely scrutinizes OLA’s subscription agreements with its driver subscribers and customers, states that OLA cannot, on one hand, exercise complete control over the activities performed by the driver subscribers, while, on the other hand, onboard them as independent contractors to evade its responsibilities under relevant statutes. The judgment also analyzes the intent and objectives of the POSH Act and the wide ambit of the definitions of employer, employee and workplace under the POSH Act in furtherance of these objectives.
OLA has filed an appeal against the judgment before the Division Bench of the Court, which has issued an interim order staying its operation, stating that the issues raised in the judgement require further consideration. While the outcome of the appeal is awaited, the Court’s judgment of September 30, 2024, through its detailed reasoning, assumes significance in contributing to the discourse on the status of gig workers in the current labor economy and the responsibilities and liabilities of companies who engage such workers on a contract basis.
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.
“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.
Welcome to the first edition of the “Namaste Korea” newsletter. This newsletter provides an overview of the latest business/trade news and developments in Indian law and practice which are relevant to Korean businesses and other organizations with India-related interests.
The group of companies (“GoC”) doctrine allows group entities who did not sign an arbitration agreement to be reached through the GoC doctrine and consequently be amenable to the arbitral process and award. In the recent decision of the Constitution Bench of the Supreme Court of India in Cox and Kings v. SAP India (P) Ltd, the GoC doctrine has been affirmatively declared as part of Indian arbitration jurisprudence.
In its practical application, the doctrine could present conflicts with the separate legal personality afforded to companies under Indian law. As such, the GoC doctrine has potentially far-reaching consequences for entities within a group of companies, and its applicability should be examined while structuring contractual arrangements involving group entities, to avoid unexpected outcomes later in the arrangement.
Short selling in India has been in the spotlight as highlighted by the events triggered by the publication of a report by Hindenburg Research in 2023 (the “Hindenburg Report”). The Indian Supreme Court considered short selling pursuant to petitions filed following the publication of the Hindenburg Report. This was followed by SEBI reissuing its framework for short selling.
To encourage prompt payment of dues to micro and small enterprises (“MSEs”), the Government of India introduced clause (h) in Section 43B of the Income Tax Act, 1961 with effect from financial year 2023-24. As per clause (h) of Section 43B, if an assessee makes payment to MSE after the time specified under the Micro, Small and Medium Enterprises Development Act, 2006, then deduction for such payment will be allowed in the year of actual payment. In this note we examine the stipulations outlined in Section 43B(h) of the IT Act and delve into its implications on the taxpayers.
Nations across the globe have announced their net zero targets and other climate action commitments. Each country is pursuing its own pathway to achieve the net zero goal considering the resources available to it. In this background, in December 2023, the Government of India announced that it has initiated steps to substantially increase India’s nuclear power capacity.
This note provides an overview of the current legal framework for private/foreign investment in nuclear energy in India and the increased level of screening for foreign investment globally in the energy sector.
Semiconductors or ‘chips’ are the building blocks of electronic devices and are used in a variety of electronic devices from cars to drones as well as smartphones and computers and across various sectors, including the aerospace and defence, telecom and automotive sectors. Currently, a majority of the semiconductor manufacturing market is dominated by countries such as Taiwan, China, the United States, South Korea and Japan. India relies on semiconductor imports from these countries. While the semiconductor manufacturing industry is currently at a nascent stage in India, due to the worldwide shortage of semiconductors, over the last couple of years, India has taken active steps to tap this market.
This note outlines the key initiatives of the Government of India in relation to the semiconductor industry, regulatory framework for investment, setting up operations in India and recent developments/investments in the semiconductor industry in India.