LKS Corporate Amicus, May 2023

LKS Corporate Amicus, May 2023

Article

Arbitration agreement, which is part of an unstamped contract, has no existence

The Constitutional Bench of the Supreme Court recently in the case of N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. held that arbitration cannot be invoked when the arbitration agreement or clause is contained in an unstamped or insufficiently stamped agreement or contract. The article in this issue of Corporate Amicus by Manasa Tantravahi and Aman Gupta analyses the said decision, considering the factual and historical background, and jurisprudence on the question of law. According to the authors, even though this issue arises at the preliminary stage of the arbitration i.e., appointment of the arbitrator as per Section 11 of the Arbitration and Conciliation Act, 1996 and dealing with the same may result in the main issues being stalled and resulting in increased judicial intervention, the Apex Court had ordered to ensure sufficient stamping of the instruments, thereby reiterating the essence of the provisions of the Stamp Act, 1899.

Read the full article here - Arbitration agreement, which is part of an unstamped contract, has no existence | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)

Notifications and Circulars

• Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2023 notified
• Companies (Removal of Names of Companies from the Register of Companies) Second Amendment Rules, 2023 notified
• Increase in the EPF contribution pursuant to the Supreme Court Judgment notified?
• Modifications in the requirement of filing of offer documents with SEBI by Mutual Funds
• Remittances to International Financial Services Centers (IFSCs) in India under the Liberalized Remittance Scheme (LRS) amended
• Levy of charges on forex prepaid cards/ store value cards/ travel cards, etc. in INR only
• Central Consumer Protection Authority advisory for e-commerce platforms

Ratio decidendi

• Arbitration cannot be invoked when the arbitration agreement or clause is contained in an unstamped or insufficiently stamped agreement or contract – Supreme Court
• Insolvency – Time Taken to provide certified copy excluded from limitation period for appeal to NCLAT – Supreme Court

News Nuggets

• Insolvency – A decision taken by CoC, when in contravention of the provisions of law, cannot be validated by the principle of commercial wisdom of CoC
• Arbitration – Issue of existence and validity of an arbitration agreement to be conclusively decided upon by the referral court under Section 11 of the Arbitration Act
• Arbitration – Courts cannot grant subsequent relief by modifying an award after setting aside the said award
• Arbitration – 2015 amendments not applicable where notice invoking arbitration is issued prior to amendment
• Arbitration agreement persists even if choice of arbitrator falls foul of Section 12(5) of the Act
• Use of celebrity names, images for satire, parodies, news, etc. not falls foul to tort of infringement of right of publicity

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Read the full newsletter here - LKS Corporate Amicus, May 2023 (Complete)

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