Supreme Court rules that arbitration must be prioritised if a contract provides for multiple dispute resolution mechanisms
The Supreme Court (“SC”), on September 14, 2018, in the case of M/s Zhejiang Bonly Elevator Guide Rail Manufacture Co Ltd. V. M/s Jade Elevator Components held that in the event that a contract does not provide for arbitration as the sole means of resolving a dispute, then in such cases, it must be assumed that the intention of the parties is to settle disputes by arbitration.
NCLT seeks clarity from IBBI on whether corporate debtors may initiate corporate insolvency resolution proceedings against defaulting companies
The Delhi bench of the National Company Law Tribunal (“NCLT”), on August 30, 2018 in the case of M/S Mandhana Industries Limited v. M/S Instyle Exports Private Limited sought clarity from the Insolvency and Bankruptcy Board of India (“IBBI”) on whether corporate debtors may initiate insolvency proceedings against defaulting companies, to ensure survival and revival of the corporate debtor.
The NCLT has requested this on account of the prevailing confusion under the Insolvency & Bankruptcy Code regarding the ability of companies undergoing insolvency proceedings to enforce their rights to recover legal debts. The NCLT opined that not permitting this could lead to fatal consequences for the corporate debtor.
SEBI caps the maximum Total Expense Ratio that mutual funds may collect from investors
The Securities and Exchange Board of India (“SEBI”) on September 18, 2018, approved a proposal capping the Total Expense Ratio charged by mutual funds. The Total Expense Ratio is the ratio between (i) the total remuneration charged by the mutual fund as expenses while managing investor’s money; and (ii) the total value of the investors’ money managed by the mutual fund (“TER”).
SEBI has capped the TER that mutual funds can collect from investors annually to 2.25% for equity oriented mutual funds and 2.00% for all other mutual funds.