India updates

Arbitration & ADR

Contributed by Khaitan & Co
Arbitration and Conciliation (Amendment) Bill 2018: coherence or chaos?
  • India
  • 13 September 2018

Following the enforcement of the Arbitration and Conciliation (Amendment) Act 2015, the Arbitration and Conciliation (Amendment) Bill 2018 proposes to further amend the Arbitration and Conciliation Act 1996. The bill is another step by policymakers towards making India "a robust centre for international and domestic arbitration" and attempts to make it an investor-friendly jurisdiction and a preferred seat of arbitration for dispute resolution.

Bombay High Court upholds minimal judicial intervention in appointment of arbitrator
  • India
  • 09 August 2018

The Bombay High Court recently held that in accordance with the 2015 amendment of Section 11 of the Arbitration and Conciliation Act 1996, the courts' responsibility to refer a dispute to arbitration is narrow and limited to examining the existence of an arbitration agreement. Further, the high court held that an unstamped document does not bar a dispute from arbitration.

Appropriate court in context of post-award of foreign-seated tribunal
  • India
  • 24 May 2018

The Bombay High Court recently ruled that an application under Section 9 of the Arbitration and Conciliation Act 1996 which had been filed following an award passed by a foreign-seated arbitral tribunal had to be brought before a 'court' as defined in the explanation to Section 47 rather than Section 2(1)(e)(ii) of the act. The judgment has clarified, and to a large extent simplified, the procedure for a foreign award holder.

Enforcement of 'minority award': law or flaw?
  • India
  • 22 March 2018

Section 34 of the Arbitration and Conciliation Act 1996 sets out the conditions for setting aside an arbitral award. In this context, the term 'arbitral award' has always been understood as an award rendered by the majority members of an arbitral tribunal. However, recent decisions of the Bombay High Court and the Delhi High Court, while setting aside the award of the arbitral tribunal, have upheld the so-called 'minority award', in variance with the act and established precedent.

Pre-arbitral steps: Indian law perspective
  • India
  • 25 January 2018

Multi-tiered dispute resolution clauses prescribing pre-arbitral steps are common in commercial contracts in order to allow parties to resolve their disputes in a non-adversarial set up, preserve commercial relationships and save costs. Almost all contracts require performance of such pre-arbitral steps as a condition precedent to arbitration, but are they specifically enforceable? In other words, are pre-arbitral steps mandatory or directory in nature?


Banking

Changes to merchant discount rate framework: impact on stakeholders
  • India
  • 02 March 2018

The Reserve Bank of India and the Ministry of Electronics and Information Technology recently established a new regulatory framework for setting limits on and payments of merchant discount rates and encouraging digital payments. Rates will now be determined based not only on the basis of transaction value, but also on turnover. However, in its effort to curb transaction costs for merchants, the government risks imposing significant charges on other system participants.

Licences for pre-paid payment instruments temporarily suspended
  • India
  • 23 December 2016

The Reserve Bank of India (RBI) recently issued a press release stating that given the rapid changes to the payments solutions space, it was in the process of reviewing the regulatory framework governing pre-paid payment instruments. The RBI also stated that it will grant no new licences for the issue of pre-paid payment instruments until the end of February 2017. This temporary suspension will not apply to applications made by new small finance banks and payment banks.

Supreme Court rules on post-dated cheque given as security for repayment of loan instalment
  • India
  • 23 December 2016

The Supreme Court recently held that a dishonoured post-dated cheque for repayment of a loan instalment that was described as 'security' in the loan agreement was covered by the criminal liability set out in Section 138 of the Negotiable Instruments Act. While deciding whether dishonoured cheques issued to discharge existing liability fall under Section 138, the court explained that the question of whether a post-dated cheque is for "discharge of debt or liability" depends on the nature of the transaction.

RBI guidelines for at-will licensing of private banks – key features
  • India
  • 30 September 2016

The Reserve Bank of India recently issued guidelines for the at-will licensing of universal banks in the private sector which, for the first time, will allow applicants to apply for a banking licence at will. The at-will regime will lead to increased transparency, better innovation and more realistic valuations, and is a significant step towards a healthier licensing regime for new private banks.


Competition & Antitrust

Contributed by Vaish Associates Advocates
CCI penalises GDA for abusing its dominant position in Ghaziabad
  • India
  • 06 September 2018

The Competition Commission of India (CCI) has imposed a penalty on the Ghaziabad Development Authority (GDA) for abusing its dominant position. The CCI held that the GDA had violated the Competition Act by raising the cost of flats meant for Ghaziabad's economically weaker sections from Rs200,000 in 2008 to Rs750,000 in 2015 without including an enabling provision in either the scheme brochure or the allotment letter.

Delhi High Court refuses to interfere with prima facie order passed by CCI
  • India
  • 30 August 2018

In a writ petition filed by Cadila Health Care, the Delhi High Court held that the stage for challenging a prima facie order closes once the director general files its report before the Competition Commission of India (CCI). The court held that the CCI is under no obligation to record a prima facie case against every aspect involved in the matter, as it cannot foresee or predict whether a violation of the Competition Act will be found following the director general's investigation.

CCI approves initial transactions notified under Insolvency and Bankruptcy Code
  • India
  • 23 August 2018

The Competition Commission of India (CCI) has unconditionally approved the proposed acquisition of Binani Cement Ltd by Rajputana Properties, a subsidiary of Dalmia Bharat Cement Ltd. This is the first transaction to be notified to the CCI involving the acquisition of a corporate debtor under the Insolvency and Bankruptcy Code 2016. The transaction was cleared by the CCI within 13 working days of it being filed.

Supreme Court upholds CCI's interpretation of Section 4(2)(c) of Competition Act
  • India
  • 16 August 2018

The Supreme Court recently set aside the Competition Appellate Tribunal's decision in which, while dismissing a Competition Commission of India (CCI) order, it had held that a denial of market access as envisaged under Section 4(2)(c) of the Competition Act can be occasioned only to a competitor. While rejecting the narrow interpretation of Section 4(2)(c) of the act, the Supreme Court held that the CCI has a positive duty to eliminate all practices which adversely affect competition.

CCI imposes penalty on airlines for fixing fuel surcharge rates
  • India
  • 09 August 2018

The Competition Commission of India (CCI) recently imposed a cumulative penalty of approximately Rs540 million on Jet Airways (India) Ltd, InterGlobe Aviation Limited and SpiceJet Limited for fixing fuel surcharge (FSC) rates for cargo transport. The CCI reasoned that the increase in the FSC on the same or nearly the same day indicated that the airlines had an understanding.


Employment & Benefits

Contributed by Shardul Amarchand Mangaldas & Co
Reducing minimum period of unemployment to withdraw provident fund accumulations
  • India
  • 22 August 2018

The Central Board of Trustees of the Employees' Provident Fund Organisation recently approved a proposal to permit provident fund members to withdraw 75% of their accumulations after a period of one month of continuous unemployment instead of two months. The proposal would come into effect when the Employees' Provident Funds and Miscellaneous Provisions Act and the Employees' Provident Funds Scheme are amended.

Code on Wages soon to be introduced
  • India
  • 28 March 2018

The new Code on Wages 2017 was recently introduced in Lok Sabha and is currently pending approval. The code seeks to integrate, amend and simplify the four central labour laws in order to reduce the multiplicity of definitions given under various labour legislation and foster a conducive labour environment by facilitating ease of compliance, thereby promoting the establishment of more organisations and creating more employment opportunities.

Increase in gratuity limit
  • India
  • 15 November 2017

The Payment of Gratuity Act 1972 is a form of social security legislation which prescribes a scheme for the payment of gratuity. For the private sector, gratuity is capped at Rs1 million, whereas central government employees can receive gratuity of up to Rs2 million. There is a proposal to increase the cap for the private sector in order to align it with the central government. Although this is a step forward in ensuring better benefits to eligible employees, it will increase employers' financial burden.

Disabilities Act and role of private employers
  • India
  • 04 October 2017

The federal government recently enacted a new act in order to empower disabled individuals and ensure their inclusion in the education and employment spheres. Although the government is primarily responsible for ensuring that disabled individuals receive equal treatment under the act, private organisations have also been made accountable for various obligations.

Social security obligation for outbound employees
  • India
  • 28 June 2017

With the growing landscape of global businesses, there is a constant need to deploy employees for international assignments not only for skill development, but also for the business needs of the organisation. In order to abate similar obligations in a host country, India has entered into social security agreements (SSAs) with many countries. SSAs offer various benefits, such as the totalisation of benefits and exemption from dual contributions of social security.


Insolvency & Restructuring

Status of 'other' creditors under Insolvency and Bankruptcy Code 2016
  • India
  • 08 September 2017

The Reserve Bank of India recently directed several banks to start insolvency resolution proceedings against a list of identified companies, including Jaypee Infratech Limited, a leading real estate development company. The case has highlighted the need for the Insolvency and Bankruptcy Code 2016 to recognise a wider class of creditors that can initiate an insolvency proceeding and participate meaningfully in such process. It has also emphasised the important role that financial creditors play.

Partial operationalisation of Insolvency and Bankruptcy Code – resolution of corporate insolvency
  • India
  • 16 December 2016

With the enactment of many of the provisions of the Insolvency and Bankruptcy Code and regulations therein, the code has been sufficiently developed to operate in practice and provide speedy resolutions to companies undergoing a debt crisis. Further, the remarkable pace of the code's implementation in the past six months reflects the central government's commitment to making the code operational as soon as possible.

Wheels set in motion for new insolvency and bankruptcy regime
  • India
  • 28 October 2016

Following the establishment of the Insolvency and Bankruptcy Board, the government has taken concrete steps to expedite the implementation of the Insolvency and Bankruptcy Code 2016. In particular, the government has appointed members to the Insolvency and Bankruptcy Board and released draft rules and regulations. These are positive steps towards achieving a fully functional insolvency and bankruptcy regime encapsulated under the code.