"We welcome the Govt's decision to set up Int'l Arbitration Centre in GIFT City in Gujarat. Arbitration is one of the foremost alternate Dispute resolution mechanisms worldwide, and Govt's initiative is yet another step in strengthening dispute resolution through arbitration in India. As Indian enterprises go global and many foreign enterprises enter India for business, this initiative will help ease the dispute resolution process. Hopefully, others will too be encouraged to set up such arbitration centres in other cities to give this initiative a further push," says Gunita Pahwa, Joint Managing Partner, S&A Law Offices.
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"The proposal to set up an expert committee to suggest measures to help attract more PE/VC investments in the Budget is a welcome move. At present, PE/VC investments have to comply with statutory process/compliances governed by the Companies Act, foreign exchange regulations, and applicable SEBI regulations for AIFs. In our view, the Government will look at the committee to provide suggestions to address the long-standing issues raised by the PE/VC industry, since it acknowledges the significant contribution of PE/VC investors in the growth of the start-up and sunrise sectors. In addition, the proposal for the creation of thematic funds by the Government (as Fund of Funds) for providing blended finance in Climate Action, Deep-Tech, Digital Economy, Pharma, and Agri-Tech sectors should see increased investments and M&A in these sectors," says L .Badri Narayanan, Executive Partner, Lakshmikumaran & Sridharan Attorneys.
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Budget 2022 is just around the corner. Expectations are high from all stakeholders given the hardship people have been facing since the last two years. Mr. Justin M Bharucha, Managing Partner, Bharucha & Partners has identified proposals that Budget 2022 should pick up: "This Budget needs to focus on the aggregate benefit to the country and the Government’s finances from deeper and more robust market developments. I’d like to see the rationalisation of fossil fuel costs. Our economy is hugely dependent on fossil fuel and rationalising costs will likely allow for an increase in economic activity including for sectors that have suffered during the pandemic. The other important change I look forward to is ‘Process Change’. Executive action on-site must match the enabling and forward-looking policy statements made in Parliament. While this is not strictly part of a ‘budget’ speech, this is an excellent time to announce (and hopefully subsequently implement) that the Government will ensure that the executive enables and does not hinder economic activity."
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The ITAT has followed its orders for the earlier years to hold that once the Indian entity has been remunerated on arm’s length basis, no further profit attribution can be made in the hands of the non-resident entity by alleging that the Indian entity constitutes a Permanent Establishment (PE) of the non-resident. Moreover, the ITAT has also followed the Supreme Court ruling in E-funds case to hold that the mere fact the Indian entity is a 100% subsidiary of the non-resident or that the non-resident has outsourced its business entirely to the Indian entity cannot lead to a conclusion that there is a PE.
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The new Rules are now the law of the land and compliance therewith is absolutely necessary if Twitter wants to regain protection afforded under Section 79 of the IT Act. With the appointment of the new Resident Grievance Officer, there should not be any problem in getting back the protection, but it will be for the court to decide. The government does not have a role to play any more now that the matter is sub judice. It is crucial to note that while the IT Rules specify how protection under Section 79 of the IT Act is withdrawn, they are silent on how the same can be restored. What continues to remain a grey area in the law is whether prospective compliance will absolve Twitter of liability under actions already initiated against it from the time when the said protection had been withdrawn. The road ahead for all intermediaries is compliance. There is no way one can opt out of it, especially with the Government pursuing it so vigorously. Twitter's final act of compliance should assuage the tensions it had been having with the Government.
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SEBI struck its claws again by banning 3 entities from the market. The said order was passed in violation to the provision of the Prohibition of Insider Trading Regulation as the three entities were found to be in hold of unpublished price sensitive information. It is pertinent to note that the order was rightly passed upon the presumption that the securities were traded based upon the knowledge and information possessed in lieu of the unpublished price sensitive information. The watchdog has passed similar orders in the past, thereby, time and again it can be observed to be upholding transparency in the trading market.
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With the Indian economy currently grappling with mounting non-performing assets (NPA) and creditors including banks, financial institutions and other lenders are left high and dry with sluggish recoveries, pre-packs across jurisdictions are known to plug this wide recovery gap. In fact, pre-pack resolution plans are likely to facilitate adherence to the timelines prescribed under the IB Code. With the increase in threshold to 1 crore, numerous operational creditors especially MSMEs were deprived of remedies under the Code. However, the recent introduction of the pre-packaged insolvency framework is likely to support MSMEs – a major contributor to our GDP and employer to a sizeable Indian population. MSMEs have suffered the most during the pandemic and placing a strict timeline of 120 days on the pre-pack model is likely to soothe the distressed MSMEs. Additionally, the Ordinance is likely to provide a cost-effective and faster resolution process for MSMEs under the debtor in possession model, unlike the normal CIRP where it is RP in possession.
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The introduction of the Prepack framework was supposed to coincide with lifting the moratorium on filing fresh cases of Insolvency. Currently, the government has restricted Prepacks provisions for MSME and will extend to other Corporates in some time. Prepacks will help Corporate Debtors to enter into consensual restructuring with lenders and address entire liability side of the Company. The government needs to further augment the NCLT’s infrastructure so that pre-packs can be implemented in time bound manner. The government may consider setting up specific benches looking at Prepack and Insolvency above a certain size to expedite resolution of large cases in time bound manner
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This is a much-awaited amendment to the IBC. The intent of the government appears to be to provide for an alternative and efficient resolution mechanism especially for MSME’s by introduction of a new chapter in the statute. This is certainly a welcome step although it was hoped that such a framework available to non-MSME’s as well. The framework of the chapter does not reduce the role and involvement of NCLT’s very significantly - it is hoped that given that this process can be initiated only by the companies with the consent of 66% of its unrelated financial creditors, the disputes are minimal allowing the process to run more efficiently than the normal CIRP.
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“The Covid-19 pandemic paved way for a more dynamic and flexible work culture. Adoption of a 4-day workweek would certainly be a major next step and a significant leap forward in the same direction. From an employer’s perspective assessing the feasibility and its impact on the output would be immediate concerns to be addressed. Further, there are other ancillary challenges such as dual employment, as employees may tend to use the extra free time to take up other jobs during the 3 off-work days. From an employee’s perspective, working for 12 hours a day for 4 days at a stretch may increase stress levels and cause burnout in the long run, which will affect their productivity. Finally, a multitude of factors such as job role, nature of the industry, etc. would also play a vital role in the viability of 4 work-days a week and a blanket approach for all may not be a viable option. Also, a 4 day work week may just be the game-changer for enhancing the participation of women in India’s workforce. Most importantly, the recognition of a 4-day workweek by law would send an extremely strong signal to both employers and employees on the need for a better work-life balance. It would not be incorrect to say that working beyond normal working hours is a tacit norm and part of minimum expectations in India today, at least in the private sector - which certainly needs to change.” Minu Dwivedi, Partner, J Sagar Associates
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