Tag Archives: Middle East

ILN Today Post

Arbitrator Cannot Lift The Corporate Veil – Delhi High Court

The law with respect to lifting of the corporate veil is well established in India. The courts have time and again held that corporate veil can be pierced only in rare cases where the court concludes that the conduct of the shareholder is abusive and the corporate facade is used for an improper purpose, for perpetuating a fraud, or for circumventing a statute. At the same time, the courts have also taken a view that corporate veil cannot be lifted by an arbitrator in an arbitration proceeding. While discussing the law on the subject in detail, the Delhi High Court (“DHC”) has recently in a judgment passed in the matter of Sudhir Gopi vs. Indira Gandhi National Open University and Another reinforced the said legal position.

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Year End Round-Up: Renewable Energy

In furtherance of its commitment to clean energy, India has undertaken the largest renewable energy capacity expansion programme in the world through initiation of various schemes, programmes and policy measures during the last 2 years.

According to the Ministry of New and Renewable Energy (“MNRE”), a capacity addition of 14.30 GW of renewable energy was reported during the last 2½ years under grid connected systems – 5.8 GW from solar, 7.04 GW from wind, 0.53 GW from (small) hydro and 0.93 GW from bio-power. A total of 7.52 GW of grid-connected power generation capacity from renewable energy sources has been added so far this year (January 2016 to October 2016) as stated below:

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Landowners are Also Consumers Qua the Builders: Supreme Court

  1. Introduction

The Supreme Court of India (“Supreme Court”) has recently laid down in Bunga Daniel Babu v. M/s Sri Vasudeva Constructions[1] (Casethat a land owner (“Appellant”) who entered into a Memorandum of Understanding (“MoU”) with a builder (“Respondent”) for development of his land by construction of a multi-story building, will be deemed to be a consumer within the definition of Section 2(1)(d) of the Consumer Protection Act, 1986 (“CPA”) despite the rider inserted by the amendment in 2002 thereto whereby the definition of consumer was amended to exclude from its purview any person who avails services for any commercial purpose. 

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Income from transfer of a foreign owned intellectual property – is it taxable in India?

Taxability of income arising out of sale and purchase transactions undertaken internationally has been a matter of debate for long in India. Foreign collaborators and investors have been strongly campaigning for clarity on their tax liabilities under Indian tax regulations for transactions undertaken outside the taxable territories of India.

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Liberalization of deferred payments under FEMA

  1. Introduction 

1.1.          Deferment of payments in share purchase transactions between non-resident buyers and resident sellers till recently required prior approval of the Reserve Bank of India (“RBI”) under Regulation 10 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (“FEMA Transfer Regulations”).

1.2.          Further, authorized dealer banks in India were allowed to open escrow accounts towards payment of share purchase consideration (subject to various terms and conditions specified by RBI), but the escrow account could only be operational for a limited period of 6 months.1 In all other cases of opening/maintaining of escrow accounts for FDI related transactions, prior approval from the RBI was necessary.

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Liberalizations in the FDI Policy – Unshackling the Manufacturing Sector

  1. Introduction

1.1.         The Foreign Direct Investment (“FDI”) policy has been in a state of flux since last year, with sweeping changes being brought in with respect to FDI vis-à-vis various sectors. One such sector has been the ‘manufacturing sector’ which was defined and elaborated upon in the FDI policy, vide Press Note No. 12 of 2015 (dated November 24, 2015), last year (“Press Note 2015”).  

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ILN Today Post

Ban on Sharapova

One of the most shocking news during the recent times for sports fans and legal fraternity, around the globe, has been Maria Sharapova’s admittance towards using the banned endurance-enhancing drug known as ‘Meldonium’ [added to the World Anti-Doping Agency (“WADA”) Prohibited List with effect from January 1, 2016]. The Independent Tribunal (“Tribunal”) appointed by the International Tennis Federation (“ITF”) [constituted under the rules of the Tennis Anti-Doping Programme 2016 (“TADP”)], has imposed a ban on Sharapova for a period of 2 years for committing an anti-doping rule violation under article 2.1 of the TADP, vide its decision dated June 6, 2016.

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Roles and Responsibilities of a Director Under Companies Act, 2013 – Pitfalls and Safeguards

1. Duties and Responsibilities of Directors.

1.1. The erstwhile Companies Act, 1956 (‘CA 1956’) contained no statement
of statutory duties of directors, and acts of directors were usually
reviewed in the context of their powers in terms of section 291 of the CA
1956 (which dealt with general powers of the board) and other applicable
laws, and their established roles under common law as laid down in several
judicial precedents1.

1.2. The Companies Act, 2013 (‘CA 2013’) for the first time has laid down
the duties of directors in unequivocal terms in section 166. In summary, the
general duties of directors under the CA 2013 are as follows:
* to act in accordance with the articles of the company, in other
words, to act within powers; 

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Overseas E-Commerce Companies to be Subject to Tax Deductions

  1. The Equalisation Levy:

Overseas E-Commerce Companies (“OECs”) such as Facebook, Google and Amazon generate substantial revenues from Indian online advertisers through digital advertising. Since these OECs do not have a Permanent Establishment (“PE”)1 in India, the revenue they generate is not taxable in India.

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From dreams to reality

  1. NCDRC to the Rescue of Beleaguered Buyers

The National Consumer Disputes Redressal Commission (the “NCDRC”) has recently passed stringent directions1 against a builder taking strong objection to delays in construction, coupled with failure of the builder to share the EMI of the flat buyers (“Complainants”) in agreed proportion.

The Complainants booked a flat with the builder in 2007. The builder assured to share 3/4th portion of the EMI to be paid to the bank, if the Complainants paid 95% of the basic sale price of the flat to the builder upfront, and availed a bank loan in such regard.

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