In association with the Campus Law Centre, Faculty of Law, University of Delhi, Mr. Sidharth Luthra, Senior Advocate, Supreme Court of India will be hosting the VIIth K.K. Luthra Memorial Moot Court, 2011 to be held in the 3rd weekend of January 2011 i.e. between 14th and 16th January 2011. The K.K. Luthra Memorial Moot Court is the only Moot Court held exclusively on Criminal Law in India. The Moot Court was last held between 15th and 17th January 2010 when 43 teams from top Indian and Overseas Universities had participated. This International Moot Court is held in the memory of his late Mr. K.K. Luthra, Senior Advocate, who was a renowned criminal lawyer.
The semi-final and final rounds will be held on the 16th of January, 2011 followed by the Prize Distribution at The India Habitat Centre, Lodhi Road, New Delhi. For more information kindly visit www.kkluthramoot.org.

Recently, India Law Journal, wrote to the Bar Council of India Chairman and Solicitor General of India, Mr. Gopal Subramaniam proposing the BCI to start ranking law schools in India keeping in mind that ranking law schools in India for the LL.B course have always been the harbingers of controversy. According to ILJ’s Assistant Editor, Aditya Shivkumar who worked on this proposal, “Ranking law schools in India will assist prospective candidates in referring to it before they actually apply to a particular law school. Having a uniform ranking list is particularly helpful, since all prospective candidates are not aware of all law schools other than national law schools and it is not possible for all of them to crack the CLAT and secure admissions into the national law schools. Moreover, coming out with a uniform ranking list will clear doubts in people’s mind about their reputation for various law schools which is often misguided by different ranking lists being taken out by various organizations.” The letter not only proposes the BCI to start ranking law schools but even draws out a methodology which could assist in coming out with unbiased law school rankings. For more information on the same, you may read the letter written by Vikrant Pachnanda and Aditya Shivkumar here. (Letter written by ILJ to BCI)

A division bench of the Bombay High Court has ruled in Messer Holdings Limited v. Shyam Madanmohan Ruia and others that a private agreement between the shareholders of a public limited company relating to restrictions on share transfer (Right of first refusal) as valid agreement and not violative of Sec. 111A of the Companies Act, 1956. The judgment also held that it is not mandatory that the company is party to agreements restricting such transfers or the same be incorporated in the articles of association of the Company.

This Court overruled the earlier decision of Single Judge of Bombay High Court in the matter of Western Maharashtra Development Corporation Ltd. v. Bajaj Auto Ltd. wherein the Court had ruled that any restriction on free transferability of shares is illegal in view of the principle of free transferability of shares of a public limited company enshrined in S. 111A of the Companies Act, 1956.

Thus, the legal provision laid down in S. 111A of the Companies Act does not expressly restrict or take away the right of shareholders of a public limited company to enter into consensual arrangement / agreements in respect of shares held by them and it is not necessary that the company is a party to such agreements or the same is embodied in the Articles of Association of the Company. With this judgment, the Bombay High Court has reinforced the validity of typical joint venture and investor rights (including rights of first refusal and tag-along rights) that were earlier in a state of confusion due to the previous order by a single judge of the same court.

On 9th September, 2010 the Supreme Court of India passed its first decision in a matter arising out of the Competition Act, 2002 (as amended) (the Competition Act) in a an appeal filed by the Competition Commission of India (CCI) against an order of the Competition Appellate Tribunal (COMPAT). The matter before the CCI concerned an exclusive arrangement between the Indian Railways and the Steel Authority of India Limited (SAIL) for the supply of rails to Indian Railways. This arrangement was challenged by Jindal Steel and Power Limited (JSPL) before the CCI as being violative of the Competition Act. On the passage of the CCI's order directing the Director General to investigate into the exclusive arrangement, SAIL had filed an appeal to the COMPAT and in allowing such appeal, the COMPAT had held that "any order, decision or direction of the CCI" was appealable under S.53A of the Competition Act & not only the orders under the sections listed in s.53A. JSPL was represented by Mrs. Pallavi Shroff of Amarchand & Mangaldas and Mr. Harish Salve. The CCI was represented by the Solicitor General of India and Economic Law Practice. Mr. Rohinton Nariman represented SAIL. Reversing the COMPAT's order, the Hon'ble Supreme Court held that parties to an investigation by the CCI do not have a right of ‘appeal’ against every order of the CCI. It held that an appeal against an order, decision or direction under Section 26(1) of the Competition Act would not be maintainable. The Supreme Court has held that the COMPAT had erroneously interpreted Section 53 A(1) of the Competition Act to hold that it had jurisdiction to entertain appeals against any direction issued or decision made by the CCI. In its decision, the Supreme Court held that only those orders of the CCI which have been enumerated under Section 53A(1) of the Competition Act may be challenged before the COMPAT. The Supreme Court was also of the opinion that the CCI was expected to record some reasons as to the existence of a ‘prima facie’ case. Partially allowing an appeal, the Supreme Court also held that the CCI was a necessary party in an appeal filed before the COMPAT and further observed that the preliminary enquiry has to be completed in a ‘time-bound’ manner within 60 days. Commenting on the judgement, Mrs. Pallavi S. Shroff, Senior Partner, Amarchand & Mangaldas said, “This decision saves the CCI from degenerating into merely a post office on the way to the COMPAT. This seminal decision of the Supreme Court corrects the balance of power between the CCI and the COMPAT, a balance that had been skewed by the decision of the COMPAT.”

Gujarat National Law University, hosted the "National Seminar on Emerging Issues in the Indian Legal Industry: The Road Ahead" on September 5th, 2010 at GNLU Campus, Gandhinagar. The Seminar seeked to highlight some of the most contemporary legal and financial issues including, proposed changes in the SEBI Take Over Code, role of private banks in the globalized economy, entry of foreign law firms in India and disinvestment of public sector undertakings. In view of the importance and integrated discussion of the topics, Hon’ble Dr. Justice Arijit Pasayat, Former Supreme Court Judge & currently Chairman of the Competition Appellate Tribunal, Ministry of Corporate Affairs, Government of India, Hon’ble Mr. Justice Kalpesh S. Jhaveri, Judge, Gujarat High Court, Hon’ble Mr. Justice R. Tripathi , Judge, Gujarat High Court, Hon’ble Mr. Justice K. A. Puj Judge, Gujarat High Court, Hon’ble Mr. Justice D.A. Mehta, Judge, Gujarat High Court, Mr. Lalit Bhasin, Managing Partner, Bhasin & Co. & President of Society of Indian Law Firms, Mr. Somsekhar Sundersan, Partner, J. Sagar & Associates, Mumbai, Mr. Amit Tambe, Partner, Trilegal, Mumbai , Mr. Kian Ganz, Publishing Editor, Legally India and other Senior Advocates from the Gujarat High Court, and Managing Directors of various public sector undertaking such as GSPC and ONGC and private sector banks such as ICICI Bank and HDFC Bank spoke on these topical and debatable legal issues.

On 1st September 2010, Amarchand Mangaldas, Delhi completed 30 years of its existence. The journey was initiated by Mr. Shardul S Shroff and Mrs. Pallavi S Shroff respectively and has currently grown to 24 partners and 201 associates. Since its inception, the Delhi office has many achievements to its credit. Renowned for winning landmark cases such as LIC Vs. Escorts, L&T takeover, synthetic and chemical matters and the most recent being Satyam Computers. During the course, the office also launched new divisions like IPR, taxation, real estate, insurance, competition law, labour, environment and compliance to name a few. Today Amarchand Mangaldas prides itself for being a full service law firm, renowned for excellent advice and expertise.

The National law schools, widely seen as the pre-eminent legal institutions in India, have become increasingly elitist over the years. A variety of factors have contributed to this, including the extremely high fees charged at these institutions, an entrance examination that now requires extensive and expensive coaching as a pre-requisite, and most importantly, a lamentable lack of awareness about law as a career amongst low income students in small towns, rural areas and other non-affluent backgrounds. The IDIA project therefore seeks to find ways to reach out to these hitherto marginalised and under-represented groups, sensitise them to law as a career option and help those interested to acquire admission to these law schools. It is hoped that such access to legal education would go some way towards empowering the marginalised and under privileged students and the communities that they represent. This project was initiated by Prof. Shamnad Basheer, Professor in law, Ministry of HRD Chair at the National University of Juridical Sciences at Kolkata who himself is a National Law School, Bangalore alumnus. More information on this project is available at www.idially.blogspot.com.

Recently, Amarchand & Mangaldas & Suresh A. Shroff Co. was awarded the International Turnaround Deal of the Year at the Turnaround Atlas Awards 2010, at a gala ceremony in Chicago. The award was won for the Satyam – Tech Mahindra deal, executed by Amarchand Mangaldas. The firm was appointed by the Government nominated board of directors of Satyam Computer Services Limited (Company) to provide critical support to the directors in relation to the entire turnaround strategy of the Company. With respect to the induction of a strategic investor, Amarchand Mangaldas advised the Company with respect to the entire bid process including the request for proposal, the share subscription agreement, diligence and all documents concerning the bid process. The firm also helped the Company secure loan financing of USD 120 million to meet its working capital needs. Additionally, Amarchand Mangaldas assisted the Company in its interactions for seeking appropriate exemptions from SEBI and Securities and Exchange Commission (SEC). The firm also advised the Company in relation to proceedings before the Company Law Board, US Class Action Law Suits and on multiple issues relating to the SEC investigation and monitoring of the forensic investigation. Delighted at his teams’ achievements, Mr. Shardul S. Shroff, Managing Partner, Amarchand Mangaldas, said that client satisfaction was the real measure of success for the firm but external recognitions encouraged them to perform better. The winners were selected based on principles of objectivity and excellence via a point ranking methodology by an independent committee of senior professionals.

Chambers and Partners, a leading international research and ranking organization of law firms has ranked Nishith Desai Associates in Band 1 for its International Tax and Telecom-Media-Technology (TMT) practice in India. Largely aimed at navigating international corporates through Indian tax regulations, the practice advises an impressive array of clients, such as Morgan Stanley, Fidelity and Standard Chartered Bank. It was appointed as special counsel by Vodafone after the telecoms giant lost its high-profile tax disputes case in the Bombay High Court. The firm also assisted Codexis with licensing, transfer pricing and residency matters related to a joint venture. In telecoms, the group advised Providence Equity on its investment in Aditya Birla Telecom.

A delegation comprising of students from Gujarat National Law University, India namely Shobhit Agarwal (Student Coach), Akanksha Arora, Kalyani Ghayal, Nayan Jain and Srikanth Hariharan will be representing India and Gujarat National Law University at the International Negotiation Competition on ‘Access to Medicines’ at Copenhagen from 13th to 15th October 2010. According to team coach, Shobhit Agarwal who was also part of the delegation which represented India at the International Climate Change Congress in the run-up to the UN COP15 last year, “the question of trade in counterfeit and unsafe pharmaceuticals is highly controversial and politically sensitive in particular when discussing border measures. International trade in pharmaceuticals is essential to achieving the fundamental goal of safe, effective and affordable medicines for all.” GNLU is one of the eight teams to be selected from all over the world alongside global reputed universities such as Yale Law School, University of Berkeley and National University of Singapore amongst others.

A Bill to create a national depository is going to be tabled in the Parliament shortly by the HRD Ministry whereby faking academic certificates may soon attract a fine of up to Rs. 10 crore and a jail term of up to 10 years. This depository shall be an online depository of certificates issues by all recognized educational institutions in India. The depository shall be maintained by either the National Securities Depository Ltd or the Central Depository Services (India) Ltd. both of which are registered with SEBI.

The home ministry has planned to amend the Indian Penal Code to punish those involved on an ‘honour killing’ including khap panchayats by making them abettors of murder. However, the Group of Ministers dealing with this proposal questioned its legality saying that the IPC already had provisions for abettors. According to them, a specific law should be drawn up to deal with this menace on the lines of the Dowry Prohibition Act which deals with crimes which are not expressly mentioned in the IPC.

In India, the Trade Marks Act, 1999 for the first time introduced service marks so as to bring the Indian trademark law in line with TRIPS, which contemplates registration of service marks for services in addition to trademarks for goods. India has been following the International classification of goods and services under the Nice Agreement and the same is incorporated in the Fourth Schedule to the erstwhile Trade and Merchandise Marks Rules, 1959 and now Trade Marks Rules, 2002. The Fourth Schedule has recently been amended vide a notification dated May 20, 2010 to include three additional classes of services to the pre-existing ones, thereby raising the total number of classes to 45. The Amendment also modifies the existing class 42 and adds the following additional classes to the list of existing class of services: (a) Scientific and technological services and research and design relating thereto; (b) industrial analysis and research services; design and development of computer hardware and software; (c) Services for providing food and drink; temporary accommodation; Medical services, veterinary services, hygienic and beauty care for human beings or animals; agriculture, horticulture and forestry services & (d) Legal services; security services for the protection of property and individuals; personal and social services rendered by others to meet the needs of individuals.

The Supreme Court of India in the case of Andhra Pradesh Tourism Development Corporation & Anr. Vs. M/s. Pampa Hotels Ltd. by its order dated April 20, 2010, held that where an unincorporated company enters into a contract containing an arbitration clause, such contract and the arbitration agreement therein is non-existent and not binding upon the parties.

The Hon’ble Supreme Court of India in the case of Indowind Energy Ltd. vs. Wescare (I) Ltd. & Subuthi Finance Ltd. held that the third party to the arbitration agreement is not bound by arbitration clause in the agreement and also made an important observation that in a proceeding under Sec. 11 of the Arbitration & Conciliation Act, 1996 the High Court is not permitted to hold that a party is a prima facie party to an arbitration agreement but has to pass a final decision as to who are the parties to arbitration agreement. The Hon’ble Supreme Court categorically stated that once the High Court renders a decision under Sec. 11 of the Act holding that there is an arbitration agreement between the parties, it will not be permissible for the arbitrator to consider or examine the same issue and record a finding contrary to the finding recorded by the High Court.

In a landmark move that could impact the Indian capital markets, the Union Finance Ministry has on June 4, 2010 made it mandatory for all listed companies to raise their public shareholding to 25%. This proposal has been brought into force by way of an amendment to the Securities Contracts (Regulation) Rules, 1957. Though there have been discussions in the past to address the issue of minimum public float to be adhered to by the listed companies, the same has not been concluded due to differences that existed between the market regulators, and between Securities and Exchange Board of India (SEBI) and the Finance Ministry. In order to address the said issue, the government had published a discussion paper in February 2008 that had also suggested a minimum 25% public holding limit for listed companies. However, the government has made it clear that it plans to exempt public sector undertakings from the 25% norm atleast until 2014.

The Indian government has finally decided to increase the limit of gratuity to INR 1,000,000 (approx USD 22,250) from the existing limit of INR 350,000 (approx USD 7,750). While the notification for change to the Payment of Gratuity Act, 1972 is still awaited, this announcement has already brought cheers to the large employee community in the country. As a result of this decision, an employer will be required to pay up to INR 1,000,000 (which amount shall be tax-free in the hands of the employee) to eligible employees, upon retirement, resignation or termination of employment.

The “Legal Route” is a monthly newsletter which is a product of the Student’s Academic Cell (SAC), Delhi. This initiative is taken by a group of law students of GGS Indraprastha University aiming to encourage a strong and effective interface between legal professionals and law students. With regular features like a comprehensive article on a pertinent legal topic, a case commentary, a synopsis of latest judgments and current National and International legal updates, The Legal Route provides the latest in the field of law. With an objective to develop legal skills beyond the curriculum by critically analyzing various aspects of law and enhancing writing skills of law students as well as to spread legal awareness amongst its readers which include judges, lawyers, law firms, law schools and a host of other audience, this newsletter is an exemplary learning pad for all in the legal field and off it. The Legal Route is also available as an e-newsletter and can be contacted at sac4law@gmail.com.

Lehman Brothers Holding Inc’s estate sued J.P. Morgan Chase & Co. for illegally siphoning billions of dollars from Lehman days before it filed for bankruptcy. The lawsuit alleges that top J.P. Morgan officials had insider information to take advantage of Lehman as its financial condition worsened. J.P. Morgan coerced Lehman Brothers to turn over $8.6 billion in collateral in September 2008 thereby triggering a liquidity squeeze that contributed to Lehman’s collapse. J.P. Morgan was Lehman’s main clearing bank acting as a middle man between Lehman and investors. It used this advantage to squeeze the billions of dollars by demanding more collateral to cover its risks thereby gaining an advantage amongst its competitors. Lehman is trying to claim back $6.9 billion out of the $8.6 billion which it pledged to J.P. Morgan.

According to Bloomberg reports, Facebook has postponed its IPO until 2010 to gain users and boost its sales. Facebook is also contending with heightened regulatory scrutiny over how it handles users’ personal data. It also has a lawsuit fled against it that contests company ownership. Paul Ceglia from New York, claimed in a state court in June that he owns an 84 percent stake, based on an April 2003 contract. Facebook said the lawsuit was frivolous.

According to Bloomberg reports, Spain sold about $4.6 billion of bonds at an auction. The notes, which mature in 2013, were sold at an average yield of 2.27%. The proceeds will be used to cover the overall gap, which was 3.76% last year. The risk premium on Spanish debt declined since the Bank of Spain published stress tests on the nation’s lenders last month, and as data shows the budget deficit is starting to shrink. The economy emerged from an almost two-year recession in the first quarter and growth accelerated between April and June according to its Prime Minister Jose Luis Rodriguez Zapatero.

A court in San Francisco passed a mobile radiation law which is believed to be the first of its kind in the nation. This law was passed despite lack of conclusive scientific evidence showing that the devices are dangerous, and amid opposition from the wireless telephone industry, which views the labeling ordinance as a potential business-killing precedent. Under the law, retailers will be required to post materials in at least 11-point type next to phones, listing their specific absorption rate, which is the amount of radio waves absorbed into the cellphone user's body tissue. These so-called SAR rates can vary from phone to phone, but all phones sold in the United States must have a SAR rate no greater than 1.6 watts per kilogram, according to the Federal Communications Commission. A major study of cellphone use in 13 countries published online last month in the International Journal of Epidemiology found no increased risk for the two most common types of brain tumors, according to the cancer institute. In San Francisco, officials were cautioning that the law was not meant to discourage cellphone use, or sales, rather merely to inform consumers.

According to the The Wall Street Journal, Walt Disney is seeking to acquire game maker, Playdom. The media and entertainment conglomerate has offered to pay more than $500 million to the game developer with a focus on social, online games. Disney is already an investor in Playdom through the entertainment company’s venture-capital fund, Steamboat Ventures.