Tag: Litigation and Arbitration

RERA

Forfeiture of Advance Payments by Developers

Insights & Updates | October 4, 2024 | Practice Area: ,

Section 19(6) of The Real Estate (Regulation and Development) Act 2016 (“Act/RERA”) casts an obligation on an allottee to make timely payment of instalments as per the payment schedule mentioned in the registered agreement for sale. What happens when an allottee fails to comply with this obligation?
This note scrutinizes the order passed by Maharashtra Real Estate Appellate Tribunal and talks about the remedies available to a developer in case an allottee defaults in making timely payment of the sale consideration. It also analyzes the position pre and post RERA regime and dives into the concept of earnest money and liquidated damages in terms of the agreement for sale.

summons in a criminal case

Summons to an Accused in a Criminal Case not to be Issued in a Mechanical Manner

Insights & Updates | September 30, 2024 | Practice Area: ,

The Supreme Court of India in its recent decision in Delhi Race Club (1940) Ltd. and Others v. State of Uttar Pradesh and Another has acknowledged that calling a person to appear in a criminal court as an accused is a matter affecting one’s dignity, self-respect and image in society and should not be used as a weapon of harassment. Summoning an accused in a criminal case is a serious matter. Criminal law cannot be set into motion as a matter of course. A magistrate is not required to act on a complaint simply because such complaint is filed before him. Before summons are issued to any accused, a magistrate is required to scrutinize carefully the evidence placed by the complainant, and if required question the complainant and the witness(es) to find out the truthfulness of the allegations and examine if any offence is prima facie committed.
The judgment in Delhi Race Club also covers the following key issues of law: (a) difference between ‘breach of trust’ and ‘criminal breach of trust’, (b) difference between ‘cheating’ and ‘criminal breach of trust’, (c) vicarious liability of office bearers of a company in criminal matters; and (d) maintainability of a petition for quashing of summons.
In this note, we analyze the aforesaid Supreme Court’s judgment in Delhi Race Club.

Arbitration Clause by Reference

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

Insights & Updates | July 19, 2024 | Practice Area: ,

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.

Group of Companies Doctrine

Navigating the Group of Companies Doctrine in the Indian Arbitration Framework

Insights & Updates | April 12, 2024 | Practice Area: ,

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.

Approval of Resolution Plan

Bombay High Court: Enforcement Directorate Should Necessarily Release Attachment over Assets of a Corporate Debtor after Approval of Resolution Plan

Insights & Updates | April 5, 2024 | Practice Area: ,

In the matter of Shiv Charan and Others v. Adjudicating Authority and Others, a division bench of the esteemed Bombay High Court has pronounced upon the legal status pertaining to attachments made by the Enforcement Directorate over assets belonging to a corporate debtor which has obtained approval for a resolution plan under the provisions of the Insolvency and Bankruptcy Code, 2016.

India-EFTA Agreement

Investments under the India-EFTA Agreement: Re-writing the Rules of the Game?

Insights & Updates | April 1, 2024 | Practice Area: , ,

On March 10, 2024, India entered into a trade and economic partnership agreement (the “TEPA”) with the European Free Trade Association (“EFTA”). The Investment Chapter of the TEPA requires the EFTA States to aim towards (i) increasing foreign direct investment (“FDI”), and (ii) facilitating new jobs in India by specified numbers and timeframes, in exchange for India enhancing market access and simplifying customs procedures. This unique formulation could provide a new template for negotiating international investment agreements in the future – especially between developed and developing countries – given that it deviates from traditional treaty design by providing for non-reciprocal rights and differentiated responsibilities. This anomaly, in turn, could have far-reaching consequences for foreign investors and global FDI flows. However, the TEPA’s novel provisions also raise certain legal and practical concerns. In this note, we analyze such provisions of the Investment Chapter.

Deficiently Stamped Arbitration Agreements

Deficiently Stamped Arbitration Agreements: The Supreme Court Finally Decides

Insights & Updates | December 22, 2023 | Practice Area:

In April 2023, a five-judge bench of the Supreme Court issued a decision in N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited (“NN Global 2”) which held that a deficiently stamped agreement is void, unenforceable and cannot exist in law. Further, the Supreme Court in NN Global 2 held that such an agreement must be impounded by a court called upon to appoint an arbitrator.
NN Global 2 was met with criticism as it would lead to inordinate delays in the appointment of arbitrators and the commencement of arbitration proceedings, if stamping of agreements was made a pre-condition to these actions. It also impacted the manner in which legal practitioners summarized their due diligence findings of deficiently stamped agreements.
On December 13, 2023, a seven-judge bench of the Supreme Court revisited NN Global 2 in Re Interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899. This decision overruled NN Global 2, and provided much-needed clarity on the issue of admissibility and the enforceability of deficiently stamped agreements.
This note discusses the key findings of the decision of the seven-judge bench of the Supreme Court.

Arbitration Clause in an Unstamped or Insufficiently Stamped Agreement

An Arbitration Clause in an Unstamped or Insufficiently Stamped Agreement: The Supreme Court Decides

Insights & Updates | June 12, 2023 | Practice Area:

A five-judge bench of the Supreme Court of India has in N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited & Others held by a 3:2 majority that an arbitration clause contained in an instrument that is not duly stamped is non-existent in law until such agreement is validated by payment of the requisite stamp duty following the procedure laid down under the relevant legislation for payment of stamp duty, particularly the Indian Stamp Act, 1899. The minority was of the view that non-payment of stamp duty on an agreement liable to stamp duty, being a curable defect, would not render the arbitration clause contained within such agreement to be void.
The following are the key takeaways from the decision. First, if an arbitration agreement (either standalone or contained as a provision in a contract) is found to be unstamped, it would be impounded immediately and returned only upon payment of the requisite stamp duty and penalty. Second, if such arbitration agreement is insufficiently stamped and the deficit in stamp duty is nominal, parties may undertake a self-assessment and pay the deficit stamp duty and penalty. Should parties not be able to self-assess the deficit in stamp duty, they are required to formally submit the agreement for adjudication with the relevant authority. Third, the judgment expressly notes that it does not comment on Section 9 of the Arbitration Act and Conciliation Act, 1996, as amended, in relation to application by parties to the courts for interim reliefs.

Government Dues and IBC Waterfall

Government Dues and IBC Waterfall: Are We Heading Towards a Non-uniform Approach Across Sectors?  

Insights & Updates | June 5, 2023 | Practice Area: ,

The waterfall mechanism under the Insolvency and Bankruptcy Code, 2016 (“IBC”) gives priority to debts owed to financial creditors over operational dues, including statutory dues. However, certain recent case law and proposed statutory amendments have questioned this principle. In particular, a proposal has emerged that government dues secured pursuant to a transaction or an agreement should have priority over other dues (including financial dues). The Telecommunication Bill, 2022 proposes that the spectrum of telecom companies under insolvency should be returned to the central government on failure of payment of dues. This note discusses certain implications of such proposed changes.