Indian Law Lab

INTRODUCTION An arbitration clause embedded in a contract or a separate arbitration agreement or an act of the party in accordance with Sec. 7(4)(b) and 7(4)(c) of the Indian Arbitration and Conciliation Act, 1996 (hereinafter ‘the Act’) or Incorporation by reference is a prerequisite to commencing an arbitral proceeding. Usually, these prerequisite encounters little or no attention during the formulating and drafting process. An inadvertence of effective arbitration clause/separate arbitration agreement (hereinafter ‘arbitration agreement’) can be disastrous, allowing for interpretation before a court of law. Most of the time the terms of the arbitration agreement become crucial in the event of all or certain future/existing disputes. Therefore, it is always advisable to draft an effective arbitration agreement which leaves no scope for interpretation before a court of law.         ________________________ * Section 7(2) of the Arbitration and Con...

SHORT NOTE A secular, unified and caste-less society is a basic feature of the Constitution       -Shri Nanabhoy Palkhivala The 103rd Constitutional Amendment Act appears to withstand the test of constitutionality. The President of India, Shri. Ram Nath Kovind on Saturday dated 12th January, 2019 gave his assent to THE CONSTITUTION (ONE HUNDRED AND THIRD AMENDMENT) ACT, 2019 (hereinafter ‘Act’). The Act amends the Indian Constitution inserting two new Articles i.e., 15(6) and 16(6) of the Constitution. This Act aims to render special provision for the advancement of ‘economically weaker section’ (hereinafter ‘EWS’) of citizens other than SC, ST and OBC relating (i) their admissions to educational institution (including aided and unaided institution by the state and excluding minorities educational institution covered under Article 30(1) of the Constitution) and, (ii) reservation of appointments or posts, both subject to a maximum of 10%. Reacting to the speci...

SHORT NOTE: The waterfall liability under section 53 of the Insolvency and Bankruptcy Code, 2016 (hereinafter ‘IBC’) places government at fifth place in order of priority. Although with the operation of Sec. 53 of the IBC, the statutory dues/government dues merely have been lowered in order of priority from the sale of the liquidation assets, whereby not abolishing the statutory dues. Simply grading down in the priority order from the sale of the liquidation assets does not impede the government’s right, as it does not extinguish the government’s claim. Therefore, it cannot be said that while placing statutory dues/government dues in the lower order of priority from the sale of the liquidation assets, impede government’s right of taxation. Statutory dues arise pursuant to a provision in the various statute. In taxing statute, the statutory dues get levied from the charging section of the respective statute. There is an enormous difference between employees, members, creditors, guar...

Come up, young ones of the bird of Paradise, before your feet touch the cesspool of corruption, this world, and fly upwards .                                                                                        - Swami Vivekananda I. INTRODUCTION Long years ago we made a tryst with corruption just after the stroke of midnight hour when V.K. Krishna Menon was entangled in the allegation of discarding the requisite procedure to import 200 Army Jeep (Jeep Scandal of 1948). That time, Nehru’s clean chit in 1955 ceased the issue without pioneering a judicial inquiry. Mo...

SHORT NOTE: Of late, in India startups have seen a promising ecosystem for them to proactively evolve and prosper. Till date, 15,066 startups have been recognized according to the StartupIndia website. As per the NASSCOM report, startups in India has raised USD 4.2 billion in the year 2018. The biggest hurdle to raise funds can be envisioned during the seed funding stage. It hits the most to startups when they fail to raise funds at the seed funding stage. The alarming factor, however, is not the funding but the legal compliance which is easily swept under the rug by the entrepreneurs. The spectrum of legal compliance includes the type of business entity, founder’s agreement, taxing statutes, labour laws, environmental laws, and other plethora of statutory compliances set forth by the government. If the standard authorized by law is not in conformity with the statutory compliances from the birth of the startup, then it becomes very unlikely to get angel investors/venture capital, th...