Press Information Bureau

08.02.2024

Civil

Government of India at forefront to promote Alternative Dispute Resolution Systems

MANU/PIBU/0157/2024

The Government has been at the forefront of promoting Alternative Dispute Resolution Systems. The enabling legal framework for resolution of disputes through Alternative Dispute Resolution (ADR) has been provided under Section 89, Civil Procedure Code, 1908. Section 89 recognises, Arbitration, Conciliation, Mediation and Judicial Settlement including settlement through Lok Adalat. It provides for the court to refer a dispute for settlement by either of these modes, where it appears that there exist elements of a settlement, which may be acceptable to the parties.

Further, section 6 of the Mediation Act, 2023 enables the court to refer for mediation, if deemed appropriate, any dispute relating to compoundable offences including the matrimonial offences which are compoundable and pending between the parties. However, the outcome of such mediation shall be further considered by the court in accordance with the law for the time being in force. Therefore, the provisions of the Mediation Act, 2023 enable and recognise settlement of compoundable offences in terms of the provisions contained therein.

The disposal of pending cases in courts including those which are compoundable lies within the exclusive domain of the judiciary. The Government has no direct role in the disposal of cases in courts. The Government, however, has been making constant endeavors to provide an ecosystem for faster and efficient disposal of cases by the judiciary.

It has been constant effort of the Government to reduce litigation in courts. A number of efforts over the years, have been initiated in the country with the vision to faster dispensation of Justice. The National Mission for Justice Delivery and Legal Reforms was set up in August, 2011 with the avowed objectives of increasing access by reducing delays and arrears in the system and enhancing accountability through structural changes and by setting performance standards and capacities.

ADR mechanisms including arbitration and mediation are less adversarial and are capable of providing a better substitute to the conventional methods of resolving disputes. The use of ADR mechanisms is also expected to reduce the burden on the judiciary and thereby enable timely justice dispensation to citizens of the country.

Some of the major initiatives take by the Government over the years in this regard include; the enactment of the Arbitration and Conciliation Act, 1996 with a view to consolidate and amend the law relating to domestic arbitration, international commercial arbitration and enforcement of foreign arbitral awards as also to define the law relating to conciliation and for matters connected therewith. To keep pace with current developments in the arbitration landscape and to enable arbitration as a viable dispute resolution mechanism, the arbitration law has undergone significant changes in the years 2015, 2019 and 2021. The changes are enabled to signal a paradigm shift for ensuring timely conclusion of arbitration proceedings, minimizing judicial intervention in the arbitral process and enforcement of arbitral awards.

The Arbitration and Conciliation (Amendment) Act, 2015 provided for expeditious, fast track and time bound arbitral proceedings, neutrality of arbitrators and cost effective delivery mechanism. This was followed by the Arbitration and Conciliation (Amendment) Act, 2019 with the main objective of giving boost to institutional arbitration and to reduce the share of ad-hoc arbitration in the country. Further, Section 34 of the Act was amended vide the Arbitration and Conciliation (Amendment) Act, 2021, which provides for unconditional stay of enforcement of arbitral awards where the underlying arbitration agreement, contracts or making of the arbitral award are induced by fraud or corruption.

The Commercial Courts Act, 2015 was amended in the year 2018 to provide for Pre-Institution Mediation and Settlement (PIMS) mechanism. Under this mechanism, where a commercial dispute of specified value does not contemplate any urgent interim relief, the parties have to first exhaust the mandatory remedy of PIMS before approaching the Court. This is aimed at providing an opportunity to the parties to resolve the commercial disputes through mediation.

The India International Arbitration Centre Act, 2019, was enacted to provide for the establishment and incorporation of India International Arbitration Centre (Centre) for the purpose of creating an independent, autonomous and world class body for facilitating institutional arbitration and to declare the Centre to be an institution of national importance. The Centre, which has since been established is equipped with necessary infrastructure and professional management offering quality legal and administrative expertise and empaneling reputed arbitrators for conduct of arbitration under its aegis. The Centre shall be providing world class arbitration related services at its facilities in a cost effective manner for both domestic and international commercial disputes including requisite administrative support, in the smooth conduct of arbitral proceedings.

The Mediation Act, 2023, lays down the legislative framework for mediation to be adopted by disputing parties, especially institutional mediation where various stakeholders have been identified to establish a robust and efficacious mediation ecosystem in India. Mediation law will prove to be a pivotal legislative intervention towards providing comprehensive recognition to mediation and enabling the growth of a culture of amicable settlement of disputes, out of court.

Lok Adalats have come up as a viable Alternative Disputes Resolution Mechanism available to common people. It is a forum where the disputes/ cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably. Under the Legal Services Authorities (LSA) Act, 1987, an award made by a Lok Adalat is deemed to be a decree of a civil court and is final and binding on all parties and no appeal lies against thereto before any court. Lok Adalat is not a permanent establishment.

Tags : ADR Systems Disputes Settlement

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Reserve Bank of India

08.02.2024

Banking

RBI imposes monetary penalty on Zoroastrian Co-operative Bank Ltd., Mumbai

MANU/RPRL/0085/2024

The Reserve Bank of India (RBI) has, by an order dated February 6, 2024, imposed a monetary penalty of ₹ 43.30 lakh (Rupees Forty-Three Lakh and Thirty Thousand only) on Zoroastrian Co-operative Bank Ltd. (the bank) for non-compliance with the directions issued by RBI on 'Maintenance of Deposit Accounts', 'Interest Rate on Deposits' and 'Frauds in UCBs: Changes in Monitoring and Reporting mechanism'. This penalty has been imposed in exercise of powers conferred on RBI under section 47A(1)(c) read with sections 46(4)(i) and 56 of the Banking Regulation Act, 1949.

This action is based on deficiency in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Background

The statutory inspections of the bank conducted by RBI with reference to its financial position as on March 31, 2021 and March 31, 2022, and examination of the Risk Assessment Reports, Inspection Reports and all correspondence related thereto revealed, inter alia, that the bank had (i) recovered penal charges from Savings Bank accounts for non-maintenance of minimum balances therein without notifying the depositors, (ii) not paid interest on balances lying in the current accounts of deceased individual depositors / proprietorship concerns from the date of their death till the date of repayment of such balances to their claimants and (iii) reported a fraud with delay. Consequently, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the RBI directions, as stated therein.

After considering the bank's reply to the notice, its additional submissions and oral submissions made during the personal hearing, RBI came to the conclusion that the charge of non-compliance with the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank.

Tags : Penalty Imposition Non-Compliance

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Press Information Bureau

06.02.2024

MRTP/ Competition Laws

CCI approves acquisition of certain shareholding of Shadowfax Technologies Private Limited by NewQuest Asia Fund IV (Singapore) Pte. Ltd.

MANU/PIBU/0150/2024

The Competition Commission of India (CCI) has approved the acquisition of certain shareholding of Shadowfax Technologies Private Limited by NewQuest Asia Fund IV (Singapore) Pte. Ltd.

The proposed combination relates to the acquisition of certain shareholding in Shadowfax Technologies Private Limited (SFX/ Target) by NewQuest Asia Fund IV (Singapore) Pte. Ltd (TPG NQ/ Acquirer) from Eight Roads Investments Mauritius II Limited (Eight Roads) and certain other shareholders of SFX.

TPG NQ is part of a closed private equity fund, managed by TPG NewQuest (formerly known as NewQuest Capital Partners). TPG NQ is a part of the TPG group. TPG, Inc. (TPG), is the ultimate holding company of the TPG group. TPG NewQuest manages a diversified portfolio of private equity investments across the Asia-Pacific Region.

The Target is a crowdsourced, tech-enabled logistics platform providing hyperlocal delivery services and third-party logistics services, specifically to e-commerce platforms in India.

Tags : Acquisition Approval Shareholding

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Securities and Exchange Board of India

06.02.2024

Capital Market

Guidelines for returning of draft offer document and its resubmission

MANU/SSMD/0004/2024

1. Adequate disclosures by the issuer and timely processing of offer documents are important for the vibrancy of the primary market. It is imperative that the offer documents as filed by the issuers and lead manager(s) are compliant with Schedule VI of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 ("ICDR Regulations"), which specifies information for disclosure in the draft offer document or the draft letter of offer and the offer document or the letter of offer, as applicable.

2. It has been observed that at times, draft offer documents/draft letter of offer filed with the Board for public issue/rights issue of securities (hereinafter "draft offer document") are found lacking in compliance with respect to instructions provided under Schedule VI of ICDR Regulations. Such documents require revisions/changes and thus lead to a longer processing time.

3. In order to ensure completeness of the offer document for investors and provide greater clarity & consistency in the disclosures and for timely processing, it has been decided to issue 'Guidelines for returning of draft offer document and its resubmission'

4. Accordingly, the draft offer document shall be scrutinized based on the broad guidelines and such documents which are not compliant with the instructions provided under Schedule VI of ICDR Regulations and guidelines provided hereunder, shall be returned to the issuer.

5. Broad guidelines for returning of draft offer document and its resubmission are placed at Annexure A of this Circular.

6. In order to enhance ease of doing business for issuers, where draft offer document is returned in terms of these guidelines, there shall be no requirement for payment of any fees on account of resubmission of draft offer document.

General Instructions

7. This Circular shall come into force with immediate effect.

8. The recognized stock exchanges are directed to bring the provisions of this circular to the notice of the listed entities and also to disseminate the same on their websites.

9. This Circular is issued in exercise of powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992 and Regulation 299 of ICDR Regulations to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Tags : Guidelines Draft offer document Resubmission

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Press Information Bureau

06.02.2024

MRTP/ Competition Laws

CCI approves acquisition of 70% stake by Zurich Insurance Company Ltd. in Kotak Mahindra General Insurance Company Limited

MANU/PIBU/0146/2024

The Competition Commission of India (CCI) has approved acquisition of 70% stake by Zurich Insurance Company Ltd. (Acquirer) in Kotak Mahindra General Insurance Company Limited (Target).

The Proposed Combination involves an acquisition of a majority stake in Target by the Acquirer from Kotak Mahindra Bank Limited. Pursuant to the Proposed Combination, the Acquirer will acquire a 51% stake in Target (through a combination of fresh growth capital and share purchase). In addition to the above, the Acquirer will also acquire an additional stake of up to 19% in the Target, over a period of time.

The Acquirer is a wholly owned subsidiary of Zurich Insurance Group Ltd. (Zurich Insurance Group) The Acquirer is a leading multi-line insurer serving people and businesses in more than 200 countries and territories. The Acquirer as part of the Zurich group has about 60,000 employees and is headquartered in Zurich, Switzerland.

The Acquirer is the principal operating insurance company of the Zurich Insurance Group. Besides being an insurance company, the Acquirer also acts as the holding company of many subsidiaries and other affiliates of the Zurich Insurance Group except for the Zurich Insurance Group's property loans and banking activities.

The Target is engaged in the business of providing a wide range of general insurance policies such as motor vehicle insurance, home and property insurance, commercial and health insurance. It offers a range of products such as liability insurance, extended warranty insurance, health insurance plans such as hospital cash, health indemnity policy, benefit policy and group insurance plans.

Tags : Acquisition ApprovalShareholding

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Insolvency and Bankruptcy Board of India

05.02.2024

Insolvency

Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2024

MANU/NMIC/0042/2024

1. The Insolvency and Bankruptcy Board of India notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2024 ('Amendment Regulations') on 31st January, 2024.

2. To streamline the voluntary liquidation process and facilitate the distribution of unclaimed proceeds to the stakeholders before the dissolution of the corporate person, the amendments in the Voluntary Liquidation Regulations make the following key modifications:

a) The directors of the corporate person while initiating the voluntary liquidation process shall make disclosure about pending proceedings or assessments before statutory authorities, and pending litigations and shall also declare that sufficient provision has been made to meet the likely obligations arising, if any, on account of the pending proceedings.

b) If the liquidator fails to liquidate the corporate person within stipulated period of 90 days or 270 days as the case may be, he shall hold a meeting of contributories of the corporate person and present a status report within fifteen days from the end of such period and thereafter at the end of every such succeeding period, specifying the reasons for not completing the process within the stipulated time period and apprise the meeting about additional time required for completing the process.

c) In the period after submission of final report but before a corporate person is dissolved, stakeholders claiming entitlement to funds in the Corporate Voluntary Liquidation Account can apply to the liquidator for withdrawal. Upon receiving such a request, the liquidator shall verify the claim and request the Board to release the funds to him/her for onward distribution.

3. The Amendment Regulations are effective from 31st January, 2024. These are available at www.mca.gov.in and www.ibbi.gov.in.

Tags : Voluntary Liquidation Process Regulations Amendment

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