The NLS Business Law Review is an initiative by the National Law School of India University to recognise and foster academic research and scholarship in corporate and commercial law.


                              LATEST ARTICLES

Of blank interest clauses and coerced waivers in construction contracts | Indian Supreme Court

– Zacarias Kanjirath Joseph
Here is a case comment on an unreported (yet) judgment of the Indian Supreme Court. The case illustrates the treatment of (common) instances in construction contracts where: the clause regarding award of interest is consciously (or unconsciously) left blank; and a contractor has by correspondence waived its claims for interest, during the pendency of the contract. The Supreme Court held that an arbitral tribunal was entitled to award interest, in the facts and circumstances.

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Ipso Facto Clauses and the IBC

– Aparna Ravi
The insolvency laws of several jurisdictions have had to grapple with striking a balance between respecting contractual commitments and the need to facilitate a successful resolution for the debtor company. This tension is reflected most strongly in the debate around the enforceability of ipso facto clauses in contracts, clauses that allow a party to terminate a contract on account of the counterparty entering the insolvency process. The treatment of ipso facto clauses under the Insolvency and Bankruptcy Code, 2016 (“IBC”) has recently come to the forefront in light of the Supreme Court’s March 2021 decision in Gujarat Urja Vikas Nigam Limited v. Mr. Amit Gupta & Ors. This article discusses ipso facto clauses under the IBC in the context of the Supreme Court’s decision and the factors to be considered when determining the extent to which ipso facto clauses should (or should not) be enforced.

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Rajat Sethi’s Column: Sharing of Unpublished Price Sensitive Information on WhatsApp and “Innocent Tippee” Liability

– Rajat Sethi, Aditi Agarwal and Sarangan Rajeshkumar

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Procedural Fairness in Securities Enforcement

– Shruti Rajan
Whilst there are a number of metrics, both objective and subjective, to assess the progress of a legal system, how it all stacks up against first principles of jurisprudence is, more often than not, a very dependable indicator of its maturity. The formulation of a reliable and consistent justice delivery system depends not only on nuanced legal interpretation and consistent judicial precedent, but equally on the even-handed application of procedural methodologies.
Such appraisals are particularly relevant for quasi-judicial proceedings today, especially since they are conducted under the aegis of regulatory bodies that don multiple hats and concurrently perform administrative, law-making and quasi-judicial roles. With a focus on the Securities and Exchange Board of India (“SEBI”) and its appellate body, the Securities Appellate Tribunal, this paper analyses how securities enforcement has performed over the years against the touchstone of principles of natural justice and the importance accorded to procedural fairness.
In doing so, we adopt a three-pronged approach – first, examining decisions that expound upon the role of bias and the acceptable degrees of separation of powers; second, evaluating audi alterem partem, how it has been interpreted and the various facets of a fair hearing; and lastly, concluding with an analysis on some home improvements that may be worthwhile to embark on.

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The Competitive Effects of Personal Data Protection Bill, 2019

– Devansh Kaushik
This article argues that the compliance-heavy approach of the Personal Data Protection Bill 2019, can result in limiting of data flows and concentration of market power, to the detriment of total welfare. Such costs of privacy interventions should be accounted for in regulatory decision-making, and be mitigated through a shift in enforcement standards. The article examines the expected effects of various provisions of the bill on the digital economy. It calls for an evolution of privacy regulation from an ex-ante expectations approach towards an ex-post facto, harm-based approach.

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Termination of Contracts During The Moratorium: Looking Beyond The ‘Going Concern’ Status

– Amrit Mahal
The resolution of distressed companies on a going concern basis is a cornerstone of the corporate insolvency resolution process (“CIRP”) introduced under the Insolvency and Bankruptcy Code, 2016 (“IBC”). This is critical to maintain the viability of the company, maximise the value of its assets and improve the likelihood of insolvency resolution. Section 14 of the IBC furthers this intent by instituting a moratorium from the date of commencement of the CIRP, until its conclusion. The moratorium prohibits persons in rem from undertaking certain actions against the corporate debtor, including the recovery of any property held by the corporate debtor and cessation of supply of goods and services critical for its operations.
The moratorium does not per se prohibit third parties from terminating contracts entered with the corporate debtor. However, insolvency tribunals have set aside the termination of lease agreements, supply contracts and other pre-existing arrangements with the corporate debtor, where termination would have the effect of breaching the moratorium or jeopardising the corporate debtor’s going concern status.
This paper examines judicial and legislative developments in the IBC in connection with termination of contracts from critical and comparative perspectives. The paper first examines the ambiguities in the scope of the moratorium provisions; and second, highlights that the IBC’s focus on the maintenance of the corporate debtor as a going concern often discounts hardships faced by contractual counterparties to the corporate debtor. Through a comparative study, the paper considers measures instituted in the United Kingdom and United States to balance the interests of such counterparties, while giving due regard to the overarching goal of insolvency resolution.

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The Wolf of Dalal Street: Re-Thinking Liability Frameworks for Shadow Banks

– Sayantan Chanda
Shadow Banking via NBFCs has steadily increased in popularity in India over the past decade. Multiple entities offer an array of financial services which provide credit lines for vital projects in infrastructure, housing and other fields. For many start-ups and small businesses across the country, shadow banks are a source of funding. While the growth of the sector is to be appreciated, the potential dangers of this form of capitalism were apparent in 2018 with the collapse of IL&FS. To this end, taking from the lessons learned the hard way from 2018 and the Great Recession of 2007-2009 caused by the meltdown of Wall Street’s shadow banks, certain fundamental concepts of company law must be re-examined. It will be argued that further RBI and SEBI Regulations fail to address the issue of banking failures. Rather, the concept of limited liability, long believed as fundamental to the company form, is unsuitable for the NBFC/shadow banking sector and must be diluted to reintroduce a form of multiple liability. This is essential for dissuading the irresponsible and risky strategies employed by management and directors in shadow banks. Such a dilution may also apply to other company forms in the future. Additionally, civil liability, long believed to be the most appropriate way of holding errant bankers liable for their greed and outrageous risk-taking, has turned out to be a disappointment in the United States. The approach of impugning individual directors and managers in civil law will have to be reformed in order to ensure that it is more effective in penalizing their collective negligence.

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Designing a Framework for Ensuring Labor Democracy during Insolvent Restructuring

– Urmil Shah
During the restructuring or insolvency of a corporation, workmen and employees usually find themselves at the receiving end with respect to outstanding salary/wage and social security contributions. The Indian Insolvency & Bankruptcy Code, 2016 provides limited safeguards to these employees/workers, leading to dilution of the beneficial nature of employment laws. The author explores different implementing models as successfully enforced in foreign jurisdiction in the nature of preferential treatment and wage guarantee insurance scheme to suggest the implementation of a hybrid mechanism for better balancing of rights of corporate debtors and employees as creditors.

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Foreign Investments in Emerging Economies: Do Competition Laws Help or Hinder?

– Raju Parakkal
The recent literature on the determinants of foreign direct investments (FDI) has missed to evaluate the role competition laws play in encouraging, or deterring, FDI inflows. The present study fills that gap by theoretically and systematically examining the effect of national competition laws on 155 emerging economies during the period 1970-2019. The findings provide strong evidence of a substantially positive relationship between competition laws and FDI inflows, even after controlling for other possible determinants of these capital flows. The results are particularly instructive for India’s enactment of its Competition Act, 2002 and its subsequent positive effect on the country’s foreign investment inflows. The findings and conclusions of this cross-country empirical study inform scholars and policymakers in developing and transition countries of the importance of competition laws in encouraging FDI in their economies.

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Comparing Specific Performance Under The Specific Relief (Amendment) Act 2018 with the CISG and the UNIDROIT Principles: The Problems of the “Un-Common Law” in India

– Ajar Rab
The Specific Relief (Amendment) Act, 2018 expressed a clear intent to the world that India was more serious than ever about the enforcement of contracts. It took the bold step of breaking its historical chains of the common law, and like civil law jurisdictions, made specific performance the norm, rather than the exception. While this was a much-needed step, a more in-depth analysis of the concept of specific performance and the amendment, when compared with other civil law jurisdictions, the Conventions on the International Sale of Goods, and the UNIDROIT International Principles of Commercial Contracts, reveals a different picture. In a hasty effort to raise India’s rank on the ‘ease of doing business’, India has neither completely adopted the civil law approach, nor entirely relinquished its inheritance from the common law. This created the “Un-common Law”, which creates more problems than it resolves. The paper critically analyses the amendment in light of international instruments and practice across jurisdictions to highlight the steps in the right directions, the grey areas, and the drawbacks of the amendment. It concludes that a comprehensive re-look is required in order to align the regime on specific performance with international practice.

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Case Note: Judgment of the Supreme Court in Essar Steel Case

– Rajat Sethi and Aditi Agarwal
By a judgment dated November 15, 2019, the Supreme Court of India in the case of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Others delivered its final verdict on the acquisition of Essar Steel India Limited under the Insolvency and Bankruptcy Code, 2016. The proceedings under the IBC in relation to the acquisition of Essar Steel lasted for more than two years and laid down precedents on several questions arising out of the then newly introduced insolvency legislation in India. This paper is a comment on this judgement. It critically analyses the decision of the Supreme Court and the impact of the judgement on insolvency law in India.

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Modern Corporate Insolvency Regime in India: A Review

– Dr. Vijay Kumar Singh
Insolvency and Bankruptcy Code (IBC), Corporate Insolvency Resolution Process (CIRP) in particular, has emerged as one of the most successful regulations in India for a number of reasons and this paper would explore these very reasons and present the major factors, which contributed towards success of the Code so far. Since the constitution of the Expert Committee on the subject in August 2014, a great level of transformation has happened in the law, policy and practice in dealing with financial distress. The reference points have changed to the extent that a default in payment of debt, which was considered routine before IBC, is now a major concern for enterprises. It has contributed towards evolving a ‘culture of compliance’, which is termed as the ‘modern corporate insolvency regime’. The regime witnesses a change from ‘debtor-in-possession’ to ‘creditor-in-possession’, clarity on the concept of ‘default’, concept of financial creditor, and a predictable framework of timely, efficient and fair resolution; the hallmark of the modern regime. The institutional pillars under the Code make the process of CIRP smooth, handled by professionals trained to handle stressed assets as a going concern. A regulator with a difference facilitates creation of an ecosystem to further the objectives of the Code. This paper would briefly trace the development of the modern corporate insolvency regime in India, elaborate the functioning of the institutional pillars and analyze some of the major jurisprudential developments. At the end, some major areas which require further progress or the unfinished agenda, will be brought forward. The paper intends to provide a general overview of the modern corporate insolvency regime in India.

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Merger Threshold and Merger Thresholds in the Digital Economy

– Abdullah Hussain and Prerna Parashar
In India, much like the rest of the world, the thresholds for merger notification to the competition authority is based on the turnover of the parties involved in the deal. In 2014, when Facebook acquired WhatsApp for $19 Billion, the question of whether antitrust law was doing enough to prevent acquisition of ‘nascent competition’ and ‘killer acquisitions’ came to focus, and particularly whether a transaction value threshold ought to be introduced. Since then, various reports have studied digital markets, including the question of sufficiency of merger thresholds. In fact, the CCI in 2020 released its market study of e-commerce in India, and noted that these markets are concentrated with a few large players. A more recent example that questions the appropriateness of the current antitrust law in detecting such deals is Zomato’s acquisition of Uber Eats for $250 Million. This paper questions appropriateness of the current threshold in India. It explores and analyzes various changes that have the potential to ameliorate the current law. These include lowering current thresholds, introducing a transaction-value threshold, increasing the number of staff of the Combinations Division of the CCI, and providing more residuary power to the CCI.

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Good Faith or Bad Faith – Analysing the Enforceability of Pre-Arbitral Negotiation Clauses

– Aditya Mehta and Swagata Ghosh
Court proceedings have always been considered an expensive and time-consuming system of dispute resolution. Whilst arbitral proceedings have been a respite for those inclined to keep their disputes away from Courts, even such adversarial proceedings come with their own set of challenges. This has created a need for other alternatives/supplements. One such supplement, increasingly found tiered in dispute resolution clauses in commercial contracts, is the obligation to amicably negotiate on the disputes in good faith, prior to instituting adversarial proceedings. But how far can one ensure the element of ‘good faith’ in such negotiations and how far are such clauses enforceable? This article seeks to provide (i) a holistic view of the nature of pre-arbitral negotiation clauses; (ii) a comparative analysis of the judicial approach adopted in various jurisdictions and the role of Courts in enforcing such clauses; and (iii) practical guidelines for drafting enforceable tiered dispute resolution clauses.

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Incentivising Whistle-Blowers: Implications For Corporate Governance

– Devansh Kaushik
The article uses an interdisciplinary approach, of law and economics, to argue for incentivising external reporting, under the SEBI (Prohibition of Insider Trading) Regulations Amendment 2019. It analyses an economic model of whistleblowing and addresses the arguments posed against external reporting.

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NLSBLR & Friday Lecture Series – Webinar on The Holy Grail of Jurisprudence in Indian Corporate/Competition/Insolvency Laws

Webinar on ‘The Holy Grail of Jurisprudence in Indian Corporate/Competition/Insolvency Laws’ by Prof. Rahul Singh

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Government Backed Credit Default Swaps: A Feasible Tool for Economic Recovery?

– Arnav Maru
The article argues for government-backed Credit Default Swaps (CDS) as a COVID-related market stimulus. The argument is built by analysing the CDS model, its current regulation and its potential in facilitating economic recovery.

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Antitrust Implications of Algorithmic Collusion

– Soumya Hariharan, Sakshi Agarwal and Akrathi Shetty
The article discusses the risks of algorithmic collusion and the complexities involved in holding companies accountable for such anti-competitive practices. It also analyses the legal and legislative developments of regulating algorithmic collusion in India and in other jurisdictions.

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Applicability of Limitation Act to the Insolvency and Bankruptcy Code: Enactments, Interpretations, and Drastic Consequences

– Karan Kamath
The article analyses the law of limitation vis-à-vis the Insolvency and Bankruptcy Code (IBC). This is done by observing how the interpretation of limitation by National Company Law Tribunal (NCLAT) orders have contradicted Supreme Court judgments. It also calls for reconciling these contradictions to achieve the objectives of both the IBC and the NLCAT.

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Role and Regulation of Cartel Ring Leaders

– Dr. Sudhanshu Kumar
The article classifies the roles played by cartel ring leaders and analyses the variations in regulating them in different jurisdictions. It also examines the same in the Indian context and criticises the lack of clear penalty and leniency structures in India.

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Open Sesame: Vodafone v UoI Reigniting the Interest in Enforcement of Investment Awards in India.

– Sahana Ramesh
The article focuses on the debate of whether investment arbitration comes under the Arbitration and Conciliation Act, 1996, in the context of the Vodafone v UoI case. It elaborates on the current interpretation by the Indian courts and proposes the way forward for enforcing investment arbitration awards in India.

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Analysing the CCI Order on Whatsapp Pay: Does it Reign in Big Tech?

– Anchit Nayyar and Krimul Malhotra
The article analyses the Competition Commission of India order on WhatsApp Pay and focuses on two issues: a. Locus standi b. Unfair Conditions, Tying and Leveraging. It argues that though the issue of locus standi was resolved rightly, the restrictive interpretation of prohibitions on tying and leveraging has led to a missed opportunity of regulating Big tech companies.

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General Motors Overseas Corporation v ACIT – (ITAT Mumbai)

General Motors Overseas Corporation v ACIT – (ITAT Mumbai) — by Pragya Kaushik

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Real Estate Developers and Homebuyers: Finding a Harmony Under the IBC

Real Estate Developers and Homebuyers: Finding a Harmony Under the IBC — by Rachita Shah and Arundhati Diljit

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Relevance of Common Ownership in Competition Analysis in India

Relevance of Common Ownership in Competition Analysis in India — by Akanshha Agrawal and Anupriya Dhonchak

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Arbitrability of Intellectual Property Disputes in India: A Critique

Arbitrability of Intellectual Property Disputes in India : A Critique — by Badrinath Srinivasan

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Indirect Acquisitions under the Takeover Code: The Fairness-Efficiency Spectrum and Lessons for Regulation

Indirect Acquisitions under the Takeover Code: The Fairness-Efficiency Spectrum and Lessons for Regulation — by Gautham Srinivas, Pranav Agarwal and Sai…

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Contracts and COVID 19: A Radical Solution that goes beyond Force Majeure

– Amal Sethi and Aditi Vishwas Sheth
The article proposes a radical solution to rethink contracts during the COVID-19 pandemic. It analyses the problems in applying the bargain theory of contract and argues for a more cooperative approach among parties and a limited role of the courts.

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Impact of COVID-19 on Proceedings under The Insolvency And Bankruptcy Code, 2016

– Rajat Sethi and Tanya Aggarwal
The article analyses the measures introduced by the Union government, with regards to the Insolvency Code, during the COVID-19 pandemic, and how it will impact various stakeholders. It also proposes for enhancing the efficiency of existing out-of-court and in-court restructuring mechanisms and for building new mechanisms like, pre-packaged insolvency resolution process.

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Tax Avoidance Jurisprudence In India: Questioning the Traditional Narrative

Tax Avoidance Jurisprudence In India: Questioning the Traditional Narrative  —by Khagesh Gautam

Posted in Journal Post Vol. V | Leave a comment

The FDI Conundrum In E-Commerce

The FDI Conundrum in E-commerce — by Akshita Pandey & Vernita Jaishal

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Impact of Social Media on the Securities Market

Impact of Social Media on the Securities Market — by Prashant Gupta and Aarti Aggarwal

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Anti-Trust Enforcement In India: Exploring Individual Liability

Anti-Trust Enforcement In India: Exploring Individual Liability — by Armaan Patkar & Sammith S

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Unmasking the Asset Tracing Tools Under the Indian Insolvency Laws

Unmasking the Asset Tracing Tools Under the Indian Insolvency Laws  — by Atotyma Gupta

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Editorial Board of 2020-21


Editor in-Chief

Vasu Aggarwal

Deputy Editor in-Chief

Mallika Sen


Aditi Vishwas Sheth

Anshita Agrawal

Divyansh Mishra

Meghana Senthil Kumar

Rhea Prasad

Administrative Editor

Harsh Srivastava

Technical Editor

Shantanu Mishra