Asia Pacific

MHA withdraws Order Requiring Compulsory Payment of Wages

The National Disaster Management Authority vide its order dated May 17, 2020 has extended the lockdown till May 31, 2020 but with limited restrictions. Concurrently, the National Executive Committee, Ministry of Home Affairs (“MHA”) vide its order dated May 17, 2020 (“MHA Order”), in exercise of its powers under the Disaster Management Act, 2005, also issued directions and guidelines for implementation of the lockdown measures.

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Compendium of Measures taken by the Government of India During COVID 19 Pandemic

To ease the impact of disruption caused by the Coronavirus/COVID-19 pandemic (“Pandemic”), various departments of the Government of India have been issuing directions, advisories, orders and notifications with measures to be undertaken during the Pandemic. To consolidate the plethora of key amendments/modifications/relaxations issued by the Government of India in relation to the Pandemic including the relief package granted by the Ministry of Finance as part of Aatma Nirbhar Bharat Abhiyan, we bring to you, our responses to the frequently asked questions considering the Pandemic and some of the relevant notifications that may be of interest to you.

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ECONOMIC RELIEF PACKAGE AND CREDIT SUPPORT FOR BUSINESSES

The Indian economy is currently reeling under a huge setback during the ongoing nationwide lockdown necessitated by the spread of COVID-19 pandemic. To uplift the economic gloom, the Government has laid out a road map towards building a self-reliant India (Aatma Nirbhar Baharat Abhiyan), with five key pillars identified as Economy, Infrastructure, System, Vibrant Demography and Demand. To stimulate the country towards self-reliance, the government has announced a special economic and comprehensive package of INR 20 Lakh Crores which is equivalent to 10% of Indian’s GDP.

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Highlights of speech by Union Finance Minister

A day after Prime Minister Shri Narendra Modi announced Rs 20 lakh crore fiscal stimulus equivalent to 10 per cent of India’s GDP to deal with COVID-19 situation in the country, today the Union Finance Minister Nirmala Sitharaman addressed a press conference in New Delhi thereby elaborating the Government’s plans in achieving the aim of self-reliant India.

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Changes in Labour Laws to reduce COVID-19 impact

Amidst the COVID-19 induced lockdown, many states such as Uttar Pradesh, Madhya Pradesh, Rajasthan, and Gujarat have brought in changes to their labour laws by way of amendments. Recently, Uttar Pradesh government has passed an ordinance by virtue of which businesses and both existing and new industrial units have been exempted from the purview of most labour law provisions for the next three years. The state cabinet cleared the labour law ordinance suspending more than 30 kind of labour laws in the state. Nonetheless, the four laws that will still apply to businesses and industries are the Building and Other Construction Workers Act, Section 5 of Payment of Wages Act, Workmen Compensation Act and Bonded Labour Act.

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COVID19 – RESTRICTION ON FEE HIKE BY PRIVATE SCHOOLS

In the wake of spread of COVID-19 pandemic, India is heading towards a new paradigm in conducting business, running offices, organising social distancing and managing supplies to needy and poor. The current lockdown is crippling Indian economy, making the state and industry coffers empty and also keeping the doors of learning institutions closed till further orders.

The educational institutions, especially private schools and colleges are, however, working overtime to adopt technology to bring online learning modules to the homes of their students. Most schools are conducting online classes, providing assignments, clearing doubts and assuring parents that students will not suffer academic loss. Schools are also continuing to pay staff salaries and raise school fee from parents albeit with various relaxations and with no late fee penalties. However, many parents are facing severe financial hardship which is further compounded by fee hikes announced by various schools. Thus, the Union Human Resource Minister, Mr. Ramesh Pokhriyal urged the private schools to reconsider their decision regarding the increase in the school fee during the academic session 20-21 and ease the fees burden by collecting it on a monthly basis during the lockdown period and directed the state education departments to come-up with a solution that works in the best interest of both the schools and the parents.

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Force Majeure Event – Injunction Against Invocation of a Bank Guarantee During Lockdown

Judgment: M/s Halliburton Offshore Services Inc. Vs. Vedanta Limited & Anr. [O.M.P. (I) (COMM) 88/2020 & I.A. 3697/2020]

Forum: Hon’ble High Court of Delhi (“Court”)

Judgment delivered on: April 20, 2020

Act/Law: Arbitration and Conciliation Act, 1996 (“Act”).

Ratio: Special equities in order to prevent irretrievable harm or injustice is a ground for injuncting invocation/encashment of bank guarantee.

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ILN Labor Group Paper – Paid Leave

Twenty ILN member firms collaborated to answer the question, “Are employees entitled to paid leave due to Covid-19?” The following document addresses in summary form this issue in a number of jurisdictions.

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Extension for holding Annual General Meeting

According to Section 96 of the Companies Act, 2013 (“Act”), companies are to hold their annual general meeting (“AGM”) within a period of 6 (six) months from the date of closing of the financial year and companies which are to hold their first AGM shall be held within a period of 9 (nine) months from the date of closing of the first financial year of that company.

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Government nod must for all FDI from neighbouring countries

The Department for Promotion of Industry and Internal Trade (DIPPT) under the supervisions of Ministry of Commerce & Industry (MCI) issued the Press Note. 3 (2020) reviewing the Foreign Direct Investment (“FDI”) policy with the aim to curb opportunistic takeovers/acquisition of Indian companies due to the current Covid-19 pandemic. During the current lockdown period, it has been observed in the media and news articles, that the neighboring countries of India are investing in stake of various Indian Companies such as China’s central bank recently raised stake in Housing Finance Development Corporation (HDFC) to a little over 1 percent. Therefore, in order to regulate such acquisitions and keep a check, the Government has reviewed the extant FDI policy in order to curb the opportunistic takeovers/acquisitions of Indian companies due to the current pandemic.

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