Downside Protection: Not Merely A Lip Service Anymore
Legal Era|November 2017

Indian Courts Are Strongly Heading Towards an Approach That Discourages Indian Parties From Using Regulatory Compliances as a Defense for Resisting Contractual Obligations
 

Downside Protection: Not Merely A Lip Service Anymore

Two judgments of the Delhi High Court this year have caused a paradigm shift in our approach towards investor protection. The Reserve Bank of India (the RBI) has always maintained that allowing a foreign investor to get a fixed or assured return on its equity investment in India would dilute the ‘risk’ factor, which is characteristic of an equity instrument, and make it akin to debt. With this view, the RBI traditionally opposed all kinds of optionality and finally, in 2014, crystallized the law by validating option contracts, albeit with a rider that a foreign investor cannot be guaranteed an assured exit price. Despite the restriction, exit options and pre-agreed returns on investments are, and have always been, the pivot of investment deals. Indian promoters, probably on the premise that the investor would not be able to enforce such agreements, have been generous in their promises to investors and do not shy away from guaranteeing exits based on performance milestones and other factors. The Delhi High Court has now ruled that the Indian company and its promoters would be held to their word, and protecting investment value is not merely a theoretical right.

Esta historia es de la edición November 2017 de Legal Era.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

Esta historia es de la edición November 2017 de Legal Era.

Comience su prueba gratuita de Magzter GOLD de 7 días para acceder a miles de historias premium seleccionadas y a más de 9,000 revistas y periódicos.

MÁS HISTORIAS DE LEGAL ERAVer todo
If You Think Positive Covid Is A Big Opportunity
Legal Era

If You Think Positive Covid Is A Big Opportunity

Senior Vice President and Head of Legal, ESSAR CAPITAL, Badrinath Durvasula, holds forth on his professional journey, the essence of leadership, working from home, books and more…

time-read
10+ minutos  |
December 2020
PROJECT DEVELOPMENT
Legal Era

PROJECT DEVELOPMENT

JOINT VENTURE TRANSACTIONS

time-read
10+ minutos  |
December 2020
NEW ARBITRATION RULES
Legal Era

NEW ARBITRATION RULES

PUBLISHED BY THE LONDON COURT OF INTERNATIONAL ARBITRATION (LCIA) AND INTERNATIONAL CHAMBER OF COMMERCE (ICC)

time-read
6 minutos  |
December 2020
M&A in the time of COVID and beyond
Legal Era

M&A in the time of COVID and beyond

What is clear for those engaging in cross-border M&A is that countries around the world are becoming increasingly protective of their economies and industries, with new rules being introduced and existing rules being more widely applied

time-read
6 minutos  |
December 2020
SWITZERLAND A DIFFERENTIATED APPROACH TO FRAUD
Legal Era

SWITZERLAND A DIFFERENTIATED APPROACH TO FRAUD

Swiss law interprets the offense of fraud in a special way where in addition to the characteristics of deception and damage as known in many jurisdictions, a qualified lie, i.e. a malicious approach, is required

time-read
5 minutos  |
December 2020
JOINT VENTURE DISPUTES MEDIATING
Legal Era

JOINT VENTURE DISPUTES MEDIATING

Mediation has shown itself to be a powerful tool for bringing a speedy and effective end to crossborder disputes while preserving the commercial relationship between them.

time-read
7 minutos  |
December 2020
Recognition of HONG KONG INSOLVENCY PROCEEDINGS IN MAINLAND CHINA
Legal Era

Recognition of HONG KONG INSOLVENCY PROCEEDINGS IN MAINLAND CHINA

A TEST CASE IN THE MAKING?

time-read
8 minutos  |
December 2020
CONFIDENTIALITY IN ARBITRATION: RECENT DEVELOPMENTS IN SINGAPORE
Legal Era

CONFIDENTIALITY IN ARBITRATION: RECENT DEVELOPMENTS IN SINGAPORE

Two recent developments in Singapore case law and legislation reflect a willingness to preserve confidentiality related obligations in all arbitrations

time-read
5 minutos  |
December 2020
ESSENTIAL GOODS SERVICES UNDER IBC
Legal Era

ESSENTIAL GOODS SERVICES UNDER IBC

WHAT DOES IT ESSENTIALLY MEAN?

time-read
6 minutos  |
December 2020
A BIDEN ADMINISTRATION'S NEW VISION FOR THE AMERICAN WORKPLACE
Legal Era

A BIDEN ADMINISTRATION'S NEW VISION FOR THE AMERICAN WORKPLACE

A LOOK AT THE KEY CHANGES PRESIDENT-ELECT BIDEN IS LIKELY TO MAKE ONCE HE TAKES OFFICE

time-read
7 minutos  |
December 2020