JUDGMENTS

Matrix Global Pvt. Ltd. v. Ministry of Education, Federal Democratic Republic of Ethiopia1

"Prior consent of central government is not required to enforce an arbitral award against a foreign state."

The petitioner filed an application for enforcement of the arbitral award against a foreign state. The court framed two issues: Firstly, whether it is necessary to obtain the permission of central government u/s 86 of the CPC before the enforcement of the arbitral award against a Foreign State? Secondly, whether a foreign state is entitled to claim sovereign immunity against the enforcement of the arbitral award in cases arising out of the commercial transaction?

The court ruled that the Central Government's consent was not required for the enforcement of an arbitral judgment against a foreign state under Section 86(3) of the Code. A Foreign State could not claim Sovereign Immunity against the enforcement of an arbitral judgment arising out of a commercial transaction. A commercial contract's arbitration clause is an implied waiver by the foreign state, preventing it from blocking enforcement action based on the principle of sovereign immunity. The foreign state could not claim that its approval must be obtained repeatedly because the award is the result of arbitration, which the foreign state had agreed to.

M/s IMZ Corporate Pvt. Ltd. v. MSD Telematics Pvt. Ltd.2

"Non-payment of stamp duty on a commercial contract does not invalidate an arbitration agreement."

The petitioner filed a petition under Section 11 of the A&C Act, 1996 for the appointment of a sole arbitrator. The issue before the court was that whether the non-payment of stamp duty on a commercial agreement would invalidate the arbitration agreement or not?

The court held that while deciding on the Section 11 petition, the court only needs to look into the existence of an arbitration agreement. Further, the court observed that mere allegations of fraud will not validate the document and the court will enquire only in cases where the document appears to be fabricated.

Amazon Seller Services Private Ltd. v. Competition Commission of India (CCI) and Ors.3

"Karnataka High Court allows CCI to probe Amazon and Flipkart."

Amazon and Flipkart challenged the CCI's order directing the DG to investigate certain alleged anti-competitive practices by way of filing a writ petition under Article 226 of the Constitution.

The court held that the nature of an order issued u/s 26(1) of the Competition Act, 2002 is an 'administrative direction' and CCI is not under an obligation to issue notice and provide a hearing to any party. Further, the court held that CCI has applied its mind and came to a conclusion that there is a prima facie case u/s Section 26(1). At last, the court held that the limited grounds for judicial review under Article 226 of the Constitution are not under the present case and hence, the court dismissed the writ petition.

M/s Siemens Financial Services Pvt. Ltd. v. Mr. Vinod Sehwag4

"No notice is required to be issued to the Personal Guarantor at the initial stage when the Resolution professional is appointed."

As per the facts of the case, the Adjudicating Authority on an application filed u/s 95 of the IBC appointed Resolution Professional without issuing notice to Personal Guarantor.

The issue before the NCLT Delhi bench was whether a notice is required to be issued to Personal Guarantor at the stage of appointing of Resolution Professional under Section 97 of IBC.

The Adjudicating Authority held that it is not a trial court and has powers to decide when the notice should be issued. Notice to Personal Guarantor shall be issued when the Resolution Professional will recommend the initiation of IRP against the Personal Guarantor and not before.

LEGISLATIONS

Model Tenancy Act, 20215

The Central government approved the Model Tenancy Act to establish rent authority, to protect the interest of landlords and tenants, and providing for speedier resolution of disputes.

Key highlights of the act:

  1. The act mandates that every letting out and renting of any premises shall be made by an agreement in writing.
  2. The act restricts the sub-letting of premises by the tenant unless a sub-letting agreement is entered by the tenant.
  3. The act places responsibility on the tenant to take reasonable care of the premises and inform the landlord in case of any dispute. Further, in a case where the tenant fails to vacate the premises as per the terms of the agreement then, the tenant will be liable to pay twice the rent for the first two months and after that, he will be liable to pay four times of the monthly rent.
  4. The act provides that the establishment of Rent Authority which shall have all the powers of Rent Court and an appeal shall lie to the Rent Court from thirty days of the decision of Rent Authority.

SEBI (Delisting of Equity Shares) Regulations, 20216

To ease the norms for delisting of shares after an open offer, the SEBI has come up with the SEBI (Delisting of Equity Shares) Regulations, 2021. The new regulations have replaced the previous regulations, which were implemented in 2009.

Key highlights of the Rules:

  1. Previously, the acquirer would notify the SEBI of their intention to delist the company, and the SEBI would then notify the stock exchanges before approving the delisting. According to the new regulations, the purchaser must first notify the Stock Exchanges of their intention to delist the company, and within one working day of that notification, the company must be notified.
  2. In the previous regime, there was no provision for obtaining approval within a specified period and hence, it used to consume a lot of time. In the new regulations, timeliness is specified for every approval and compliance which makes it a time-bound process.
  3. Previously, the acquirer uses to open the Escrow account after getting approval from the stock exchange. However, to ensure that the acquirer has enough funds the new regulations require that the acquirer should open an Escrow account before applying for approval from the stock exchange.
  4. The new regulations have defined 'indicative price' (higher than floor price) and the acquirer has been given an option to disclose the same.

Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer, and Refund) Amendment Rules, 20217

The amendment aims to ease the process of share transfer under Section 90(9) of the Companies Act, 2013 and the specifies that the amount under Section 90(9) will also be added to the IEPF fund.

Key Highlights of the Rules:

  1. Addition of Clause (fa) in rule 3, in sub-rule (2), after clause (f) thereby, the amount under Section 90(9) and the resultant benefit will be added to the IEPF fund.
  2. Addition of Rule 6A: this provides for how shares under Section 90(9) will be transferred to the fund.
  3. The updated version of FORM No. IEPF 4 & IEPF-7 for the statement of shares transferred to the Investor Education and Protection Fund and Statements of amounts to IEPF on account of Shares transferred to fund respectively.

The Companies (Incorporation) Fourth Amendment Rules, 20218

The MCA in the exercise of its powers under Section 469(1) and (2) of the Companies Act, 2013 has issued the Companies (Incorporation) Fourth Amendment Rules, 2021.

Key Highlights of the Rules:

  1. The amendment has amended Rule 38A (which provides for application for registration of GSTIN, ESIC, EPFO, etc.) to include shop and establishment registration.
  2. Form AGILE-PRO has been revised to AGILE-PRO-S. Thus, for taking shops and establishment registration form AGILE-PRO-S can be filed.

Companies (Indian Accounting Standard) Amendment Rules, 20219

To keep the Indian Accounting Standard (AS) in tune with the IFRS, the Ministry of Corporate Affairs (MCA) has issued Companies (Indian Accounting Standard) Amendment Rules, 2021. The rules are enacted keeping in mind the impact made by COVID-19.

Key highlights of the Rules:

  1. The amendment replaces the definitions of 'assets' and 'liabilities' with those found in the framework for the preparation and presentation of financial statements under Ind AS for qualifying the acquisition method recognition criteria.
  2. The amendment adds the guidance on accounting treatment for amendments related to Interest Rate Benchmark Reform, as well as the introduction of specific paragraphs in the standard to preserve compatibility with IFRS 4.
  3. The amendment emphasizes that an organization may only change its accounting rules for the recognition, measurement, impairment, and derecognition of regulatory deferral account balances if the change improves the financial statements' relevance and reliability.
  4. The standard has been updated to reflect the modifications made to Ind AS 114 and to replace the word "Framework" with "Conceptual Framework of Financial Reporting in Ind AS."

Companies (Creation and Maintenance of databank of Independent Directors) Amendment Rules, 202110

The Companies (Creation and Maintenance of Databank of Independent Directors) Rules, 2019 were issued to create a data bank of independent directors containing all the qualifications. This enabled the companies to do due diligence and select independent directors. Accordingly, the MCA has issued the amendment rules, 2021.

Key highlights of the Rule:

  1. Under sub-rule (7) of Rule 3, after the word "inclusion", the word "renewal" has also been added.
  2. Further, sub-rule (8) has been added to Rule 3, which provides that if there is a delay on the part of a person in applying to the institute for inclusion of name then, the name can be added by the institute after charging a fess of one thousand rupees.

Footnotes

1. Delhi High Court, June 18th, 2021

2. Delhi High Court, June 4th, 2021

3. Karnataka High Court, June 11th, 2021

4. NCLT Delhi Bench, June 10th, 2021

5. Approved on June 2nd, 2021.

6. Notified on June 10th, 2021 and to be forced from June 10th, 2021

7. Notified on June 9th, 2021 and to be forced from June 9th, 2021

8. Notified on June 7th, 2021 and to be forced from June 7th, 2021

9. Notified on June 23rd, 2021 and to be forced from April 1st, 2021

10. Notified on June 18th June, 2021 and to be forced from June 18th, 2021

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.