Regulations to Facilitate Overseas Acquisitions: CII

The Confederation of Indian Industry ("CII") has urged the Government of India to bring forth regulatory changes which would facilitate Overseas Acquisitions. In a memorandum submitted to the DIPP, CII has submitted that the regulatory framework in India hinders Indian Multinationals to pursue global acquisitions. Some of the concerns and suggestions put forth by the CII, in this regard, are:

"A provision is proposed in the Companies Bill 2009 that would restrict the number of step down subsidiaries. This would be a major impediment towards overseas acquisitions by Indian companies. Very often the foreign company to be acquired already has more than one level of subsidiaries and for effecting the acquisition, the Indian company may need to create a SPV which could be a subsidiary of a subsidiary. However, if the Companies Bill is enacted with this restriction, it would prove to be a major hurdle for aspiring Indian companies, which are planning overseas acquisitions."(emphasis mine)

"For investing in the target company, in excess of 60% of its net worth or 100% of its free reserves, the company requires prior shareholders approval. This necessitates disclosure of vital details about the proposed acquisition company to the shareholders, including the price being paid. As a result, sensitive and confidential information, which could be of critical importance to competing bidders, becomes available in the public domain even prior to submitting a bid to the target company."(emphasis mine)

"The Competition Act, 2002 also mandates merger regulation. While the relevant provisions of the Act have not yet been notified; once the process is initiated, the process would conflict with provisions under Companies Act, SEBI’s Preferential Allotment Guidelines, the Takeover Code and the Guidelines issued by DoT for the Telcom sector. This would result in unnecessary references to the Regulator and/or Govt and in some case, litigations. These aspects should be carefully considered before notification of the sections relation to merger regulation by CCI."

The full contents of the memorandum is available here.

S. 11 of the Arbitration Act, 1996: Is the Law Finally Clear!

S. 11 of the Arbitration and Conciliation Act, 1996 (Hereinafter “the Act”) has given rise to a great deal of controversy. There is catena of decisions of the Supreme Court wherein the Apex Court has examined the nature and scope of the enquiry and the jurisdiction of the Chief Justice or his designate while dealing with petitions under Section 11 of the Act. In Alva Aluminium Ltd., Bangkok v. Gabriel India Limited (16.11.2010), the Supreme Court has once again reiterated the law on this subject. The Court in ALVA cited with approval the judgment of the Supreme Court in National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd. (2009(1) SCC 267) wherein the Apex Court had categorized the issue(s) that may arise for consideration before the Chief Justice or his designate in a petition under Section 11 of the Act. In Boghara Polyfab the Court had stated the following proposition of law:

“1. The issues (first category) which the Chief Justice/his designate will have to decide are:

(a) Whether the party making the application has approached the appropriate High Court.

(b) Whether there is an arbitration agreement and whether the party who has applied under Section 11 of the Act, is a party to such an agreement.

2. The issues (second category) which the Chief Justice/his designate may choose to decide (or leave them to the decision of the Arbitral Tribunal) are:

(a) Whether the claim is a dead (long-barred) claim or a live claim.

(b) Whether the parties have concluded the contract/transaction by recording satisfaction of their mutual rights and obligation or by receiving the final payment without objection.

3. The issues (third category) which the Chief Justice/his designate should leave exclusively to the Arbitral Tribunal are:

(a) Whether a claim made falls within the arbitration Clause (as for example, a matter which is reserved for final decision of a departmental authority and excepted or excluded from arbitration).

(b) Merits or any claim involved in the arbitration.”

The other decisions of the Supreme Court which have enunciated the law on this subject are mentioned hereunder:    

• A.P.Tourism Development Corporation v. Pampa Hotels Ltd., 2010 (5) SCC 425
• SBP. v. Patel Engineering Ltd., AIR 2006 SC 540
• Shivnath Rai v. Gaffar, AIR 2008 SC 1906

   

Constitutional Law Conference

School of Law, Christ University is organizing a two day National Conference on the “INDIAN CONSTITUTION IN THE 21^ST CENTURY: A CONCEPTUAL AND CONTEXUAL AUDIT to be held on the 24^th and 25^th of February, 2011. The Conference is broadly structured around four themes namely:

•   Reframing the Constitution: Is it really a need of the hour?
•   National Security and Constitutional Challenges
•  Development and Constitutional Challenges
•  Challenges to the Functions of the Organs of the State

The Conference brings a unique opportunity to share and explore new ideas, concerns and suggestions among academicians, practitioner, policy makers and students. So far the conference has received an overwhelming response in that there are over fifty papers that are expected to be presented on the conference days.

Programme Details:

The first day of the conference will see participation of eminent jurists, academicians and practitioners such as Justice Santosh Hedge, Former Judge, Supreme Court of India, Justice P.P. Naolekar. Former Judge, Supreme Court of India, Prof. V.S. Mallar, Chair Professor (M.K.Nambiar Chair on Constitutional Law) at NLSIU, Shri Uday Holla, Senior Advocate, Supreme Court of India and Shri Aditya Sondhi, Advocate, Supreme Court of India.

The second day of the conference will see presentations by several academicians and students across the country. Leading scholars working in this domain will be moderating each of the sessions on the second day.

Contact

Practitioners, academicians, policy makers and students are invited to register as delegates. The conference brochure is available at http://www.christuniversity.in/msgdisplay.php?id=5&f=2.  Further details will be made available on request. Interested readers can contact the Conference Organizing Committee at conference2011@law.christuniversity.in

Registration Fee

For academicians	750 INR
For two delegates	1000 INR
For students	500 INR