Trilegal Quarterly Roundup: APR-JUN 2022 Issue 4

We are happy to present the fourth issue of our e-magazine – Trilegal Quarterly Roundup.

If you would like to navigate to the magazine directly, click here. If you would like to read a brief summary of what this issue features, please continue reading below and use the hyperlinks provided to access individual features.

INSIGHTS

• Revised Credit Default Swaps Framework – A Much Needed ChangeThe RBI has introduced a revised regulatory regime for the credit default swaps market in India with the introduction of the Master Direction – RBI (Credit Derivatives) Directions, 2022. In this article, we discuss the key features of the new framework and its likely impact on the Indian financial market.
• Warranties and Indemnities Insurance in India – Are We There Yet?Warranties and Indemnities (W&I) Insurance is relatively new to the Indian M&A ecosystem. While common globally, W&I insurance is yet to see widespread adoption in India. It holds great potential in an increasingly complex economic environment with its ability to provide cleaner exits for sellers and customised risk coverage for buyers. In this article, we explore key features of W&I Insurance and its benefits in the Indian context.
• Emerging ESG Reporting Trends – An Indian PerspectiveESG reporting is in sharp focus globally and the regulatory environment is constantly evolving for businesses in the EU and India. This article delves into the challenges around ESG reporting under the existing frameworks, recent developments across these two jurisdictions and key issues to look out for in relation to business in India.

TUNE IN

Our Partner, Sridhar Gorthi, in conversation with Dinesh Vazirani, CEO and Co-founder of Saffronart, discuss the evolution of the Indian art market, Saffronart’s journey, factors impacting the pricing of art and some key checkpoints for investing in art.

To watch this video, click here.

QUARTERLY MILESTONES

• CorporateThe past quarter witnessed developments in the company law regime to align rules under the Companies Act, 2013 with restrictions previously imposed under exchange control laws on FDI from neighbouring countries. Validity of the de minimis exemption for merger control clearances was also extended for a further period of five years.
• Dispute ResolutionIn the previous quarter, the Supreme Court decided on the constitutional validity of the amendment to the Foreign Contribution (Regulation) Act, 2010. It pronounced important judgements clarifying crucial aspects of arbitration and insolvency laws such as the arbitral tribunal’s discretion to award interest and the treatment of dues of workers of a corporate debtor undergoing insolvency resolution process. It referred the question of applicability of the ‘group of companies’ doctrine in arbitrations to a larger bench for finality. The Supreme Court also ordered the setting up of special courts to hear cheque dishonour cases.
• Technology Media and TelecommunicationsIn the last quarter, several key developments took place in the technology, fintech and telecommunications sector, such as the issuance of the cyber security directions, a revised open data framework for sharing public data and guidelines for outsourcing arrangements in the financial sector.
• Labour and EmploymenThe second quarter of 2022 witnessed the Supreme Court ruling on vaccination mandates and several states reinstating mask mandates and other measures due to a rise in Covid-19 cases. Judicial rulings on critical aspects of the Industrial Disputes Act and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act were also passed. Significant changes were introduced on the legislative front in the states of Uttar Pradesh and Tamil Nadu.
• White Collar Crimes InvestigationsAfter a relative lull in enforcement actions under the Foreign Corrupt Practices Act, the last quarter saw a significant uptick with several multi-jurisdictional and multi-agency enforcement actions in the US, UK, Switzerland, and Brazil. In India, the Supreme Court rendered an important judgement on pleas for quashing allegations of offences under the Prevention of Money Laundering Act, 2002.
• Financial Regulatory RegimeThe last quarter saw key changes in the financial regulatory landscape. SEBI eased strictures on investments by Foreign Portfolio Investors by permitting them to invest in exchange-traded commodity derivatives. Additionally, the RBI limited the ‘buy now pay later’ enthusiasm by precluding the loading of Prepaid Payment Instruments through credit lines while also joining the ‘Digital India’ initiative by issuing guidelines to establish digital banking units.
• Funds and Asset ManagementThe past quarter witnessed key regulatory and legislative developments in the funds and asset management space. SEBI provided clarity on provisions relating to compliances by ‘large value funds for accredited investors’ and mandated the appointment of a compliance officer by all AIFs. The International Financial Services Centres Authority notified regulations for the setting up of AIFs in GIFT City, Gujarat.
• Energy and InfrastructureThe past quarter witnessed several regulatory developments, such as the Green Energy Open Access Rules, the General Network Access Regulations and the Late Payment Surcharge Rules, in addition to various measures introduced to promote ease of doing business and combat climate change.
• Direct TaxThe Indian income tax framework saw some interesting developments in the previous quarter, such as the ruling of the Supreme Court on the validity of reassessment notices issued under the old regime and guidelines aimed at clarifying the applicability of certain newly issued withholding tax provisions.
• Indirect TaxThe previous quarter saw significant decisions of the Supreme Court on the secondment of employees by overseas entities to their Indian counterparts and levy of IGST on ocean freight. Other important developments in the indirect tax space include the recommendations made by the GST Council in its 47th meeting, some of which have been implemented through suitable amendments and notifications.
• Intellectual PropertyThe law on intellectual property witnessed some interesting developments in the previous quarter ranging from judicial and quasi-judicial decisions on critical aspects of the law to the Parliamentary Standing Committee’s recommendation on establishing Intellectual Property Divisions.