LEGAL PRACTICES OF INSOLVENCY AND BANKRUPTCY IN INDIA

Bankruptcies have historically followed the business cycle closely. Failure of certain company strategies is a natural part of the market economy’s process. When a firm fails, the optimum outcome for society is a quick renegotiation between financiers, to fund the going concern with a new structure of obligations and a new management team. The purpose of bankruptcy legislation is to recover an entity’s debt and distribute its assets among competing claimholders. As a result, the RBI’s asset quality reviewers identified an extremely high number of NPAs. The government’s most major change is the insolvency and bankruptcy legislation. On the heels of the adoption of the Insolvency and Bankruptcy Code, India jumpedfrom 108thto 52nd in the resolving insolvency category, while its rating improved significantly in dealing with construction permits to 27th from 52nd and trading across borders to 68th from 80th. The purpose of this study is to look into the regulatory framework in India for insolvency and bankruptcy. The impact of insolvency and bankruptcy Code on the Indian economy is also discussed in the study. KEYWORDS: Insolvency, Bankruptcy, Code, Regulatory, SARFAESI Act, National Company Law Appellate Tribunal (NCLAT)

Dismantling obstacles impeding better governance in companies: Affirming the expansion of the interpretation of "shareholder and director" under section 163 of the 2008 Act

Impediments to corporate accountability have over the recent years manifested in diverse forms. What took place in Peel v Hamon J&C Engineering (Pty) Ltd is a case in point. The aim of this article is in two forms. First, from the commentaries and cases consulted, it is clear that the character of who must qualify in terms of the section 163 criterion is not settled. Moreover, this can be gleaned from the criticisms against Moshidi J's judgment in Peel for having extended/expanded the section 163 remedy to afford relief to shareholders and directors whom the legislature may not have contemplated to cover under the relief. The aim here is to argue in support of this expansion as promoting accountability. Secondly, it is to make some comments on the criterion that it is only a shareholder and a director who are accorded locus standi to invoke the remedy. From the discussion, the paper makes numerous commendable observations. First, the complaint raised in Peel was not an abuse of process; it was a genuine complaint/application seeking to address genuine and novel issues which often arise between the parties in company law. Second, Moshidi J's judgment demonstrates evolution/progress for its contextual approach to the section 163 remedy's interpretation. The judgment heralds/foreshadows colossal principles/practices within company law aimed at balancing stakeholder interests. Third, the judgment potently disentangles hurdles which normally impede accountability by company directors. Lastly, the paper recommends that other stakeholders be considered for relief under the remedy.

TRANSFORMASI DAN PENGAWASAN KEUANGAN NEGARA PADA BUMN DENGAN PRINSIP BUSINESS JUDGMENT RULE

Abstract, State assets in the form of shares of business entities are not state assets, but have been transformed into business entity assets. Likewise, government officials who become Directors/Commissioners and other shareholders have an equal position with private shareholders. The Board of Directors in carrying out their duties and authorities has the authority and protection in every business decision making, but this does not escape supervision through the BJR (Business Judgment Rule) principle, as contained in the Limited Liability Company Law. This study uses a qualitative research method with a statutory approach. The purpose of this study is to understand the criteria for state finances in SOEs and the legal consequences of financial losses and supervision of SOEs. The results of the study stated that the implementation of BJR on the Board of Directors of SOEs could be carried out after fulfilling the terms and conditions of the enactment of BJR. BJR can be implemented because a legal entity is actually subject to the Limited Liability Company law. Keywords: Supervision of SOEs ion; Business Judgment Rules; State Finance Intisari: Kekayaan negara yang berbentuk saham dari badan usaha bukan merupakan kekayaan negara, tetapi telah bertransformasi menjadi kekayaan badan usaha. Demikian terhadap pejabat pemerintah yang menjadi Direksi/Komisaris dan pemegang saham lainnya memiliki kedudukan yang setara dengan pemegang saham swasta. Direksi dalam menjalankan tugas dan wewenang memiliki kewenangan dan perlindungan dalam setiap pengambilan keputusan bisnis, namun ini tak luput dari pengawasan melalui prinsip BJR (Business Judgment Rule), sebagaimana termuat dalam Undang-Undang Perseroan Terbatas. Penelitian ini menggunakan metode penelitian kualitatif dengan pendekatan perundang-undangan. Tujuan penelitian untuk dapat memahami kriteria keuangan negara pada BUMN dan akibat hukum kerugian keuangan dan pengawasan pada BUMN. Hasil penelitian menyatakan bahwa implementasi BJR terhadap Direksi BUMN dapat dilakukan setelah memenuhi syarat dan ketentuan berlakunya BJR. BJR dapat diimplementasikan karena badan usaha berbadan hukum sejatinya tunduk pada undang-undang Perseroan Terbatas. Kata Kunci: Pengawasan BUMN; Business Judgment Rule; Kuangan Negara

Restrictions on the Public Authority’s Right to Amend the Contributor Company Law (Comparative Study)

Legislations gives away, including comparative legislation the Egyptian and Lebanese the field for companies including contributed companies in taking all what it deems appropriate of its own affairs, especially when the company goes through circumstances that require its process quickly and directly, provided that the company doesn't harm its interests if it does so including the interests of the country and it's partners and those who involved with it, therefore, the comparative legislation restricted the company to some of the restrictions mentioned in clear texts, accordingly the study of this research came in order to find out what may happen to the company of cases, and what are these cases and the restrictions of it's cases. For that the research abstracted to the foundation of legal regulation in the Egyptian and Lebanese legislations, recapture the company at the amendment and it's restrictions that have been considered the rights of contributory and those dealing with it from others, but this regulation contains some of ambiguity specially concerning of the rights and obligations of the companies contributory, in time that there is no foundation for such texts at Iraqi legislation. So we call the Iraqi legislator to restrict the right of contribution companies when amendment it's contract or it's order at clear texts that effect on the company then on national economy because these companies considered one of the best businesses supporting the economy companies and for every one who contributed and dealt with it.

The Judicial Control of a Cross-Border Merger approved by means of an abusive resolution

The fight for the control of the Mediaset group has given rise to several judicial decisions issued in various national jurisdictions and even by the European Court of Justice. Three orders of Spanish Courts have been of particular interest. Two of them were issued by a Commercial Court in Madrid and the third one was issued on appeal by the Provincial Appeal Court Madrid. They instructed the suspension of the shareholders meeting resolutions of the Spanish Mediaset company approving a cross-border merger. The content of this resolution was to approve the acquisition of the Spanish company by another company domiciled in the Netherlands thus changing the applicable law. The resolution approving the merger was presumed (provisionally) to be abusive and, eventually, null and void. The decisions of the Spanish Court were grounded on the fact that the articles of association of the resulting Dutch company would be detrimental to the minority in the Spanish company. This limits the freedom of establishment (Art. 49 TFEU) and is based on a multilevel scrutiny, resulting from the national laws applicable to each company that participates in the merger. Those judicial decisions handled with other issues of interest in company law, such as the conclusive effect of the registration of a cross-border merger, the legitimation of the minority to challenge shareholders resolutions, or the effects of a shareholders meeting resolution replacing a previous merger resolution that has been challenged before the courts.

Related Party Transactions – a closer look at the emergence of the new EU regime

The Amended Shareholders’ Rights Directive adopted in 2017 pushed the regulation of related party transactions high up on the Member States’ legislative agenda. The Directive requires binding rules addressing related party transactions in listed companies. This article takes a closer look at the discussions and negotiations in the EU institutions leading up to the Directive adopted and ends with some reflections on the EU legislative process, drawing on my decades long ministerial experience of negotiating and implementing EU legislation in the field of company law, including this one.

A builder's duty of care - When should it apply to the directors and employees of companies involved in the creation of defective buildings?

<p>This thesis considers the issue of when a tortious duty of care to prevent economic loss should be imposed on the company directors and employees who stand behind the complex structure of companies and contracts involved in the creation of a defective building. Set against the background of the leaky building crisis, and what are (it is argued) unfair litigation outcomes, the thesis traverses the emergence and development of the principles that underpin liability for negligence and negligent misstatement in respect of defective buildings. A review of the cases confirms that the concepts of control and general reliance are the basis of New Zealand law in this area. There follows a discussion of the difficult relationship between company law principles and negligence principles, and the role of assumption of responsibility in the law of negligence and negligent misstatement, including a discussion of developments in the leaky building litigation. The thesis advanced is that, in respect of the creation of defective buildings, the approach to the issue of whether to impose a duty of care on company directors and employees would benefit from placing significant weight on the factor of de facto control of the inputs that dictate the outcome of a building project, and on the lower level factor of a direct or indirect financial interest in the outcome of the project. It is argued that the approach to imposing a duty of care should be the same for directors and employees and in respect of statements and actions. In cases where the evidence establishes that the financial interest factor is not present, this should give rise to an inference that the company director or employee does not have control of the inputs that dictate the outcome of the project, so that no duty of care arises. This would enable a director or employee to exit litigation by way of an application for summary judgment. This is intended to discourage the practice of joining minor parties to litigation for the purpose of extracting a precautionary settlement. If control of the inputs that dictate the outcome of a project can be established by inference from the existence of the financial interest factor, or by the other evidence, then the two stage approach to the imposition of a duty of care would require a consideration of other factors that might negate the duty, such as the contractual matrix.</p>

A builder's duty of care - When should it apply to the directors and employees of companies involved in the creation of defective buildings?

<p>This thesis considers the issue of when a tortious duty of care to prevent economic loss should be imposed on the company directors and employees who stand behind the complex structure of companies and contracts involved in the creation of a defective building. Set against the background of the leaky building crisis, and what are (it is argued) unfair litigation outcomes, the thesis traverses the emergence and development of the principles that underpin liability for negligence and negligent misstatement in respect of defective buildings. A review of the cases confirms that the concepts of control and general reliance are the basis of New Zealand law in this area. There follows a discussion of the difficult relationship between company law principles and negligence principles, and the role of assumption of responsibility in the law of negligence and negligent misstatement, including a discussion of developments in the leaky building litigation. The thesis advanced is that, in respect of the creation of defective buildings, the approach to the issue of whether to impose a duty of care on company directors and employees would benefit from placing significant weight on the factor of de facto control of the inputs that dictate the outcome of a building project, and on the lower level factor of a direct or indirect financial interest in the outcome of the project. It is argued that the approach to imposing a duty of care should be the same for directors and employees and in respect of statements and actions. In cases where the evidence establishes that the financial interest factor is not present, this should give rise to an inference that the company director or employee does not have control of the inputs that dictate the outcome of the project, so that no duty of care arises. This would enable a director or employee to exit litigation by way of an application for summary judgment. This is intended to discourage the practice of joining minor parties to litigation for the purpose of extracting a precautionary settlement. If control of the inputs that dictate the outcome of a project can be established by inference from the existence of the financial interest factor, or by the other evidence, then the two stage approach to the imposition of a duty of care would require a consideration of other factors that might negate the duty, such as the contractual matrix.</p>

Study on the Relationship between Supervisors' Remuneration in Listed Companies and Tobacco Control Measures

Objectives: At present, the theoretical study on supervisors' remuneration under the Company Law is still too principled, and many "chaos" occur in the remuneration practices for supervisors. First, the lack of clear understanding of the incentive function and institutional specificities of supervisors' remuneration results in many problems in the application of supervisors' remuneration in practice, as well as the ignoration of the Board of Supervisors in corporation governance. Second, rather than reaching the intended effect, the legislative approach of authorized "blank" intentionally adopted under the Company Law leaves an inducement for the ineffective supervision of supervisors in practice. Third, there is not only a lack of theoretically self-consistent discussion on the special problems of concurrent supervisors and employee supervisors' remuneration, but also a divorce of the institutional structure and application from good expectations. If the research background of the problem is placed in "tobacco regulatory science", it will be found that there is no inevitable connection between supervisors' compliance expectations and remuneration, but mainly depends on the provisions of legislation. Going back and forth between theory and practice of supervisors' remuneration, this paper combs and interprets the issue of supervisors' remuneration from the perspective of the legislative provisions and theoretical study under the Company Law, and analyzes the difference between the reality and the necessity of the Company Law with respect to the issue of supervisors' remuneration in the light of the legal principle of the Company Law, with the view to improvement of the rules of the Company Law.