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VOLUME 3 ISSUE 2
EDITORIAL NOTE I EDITORIAL BOARD
INTELLECTUAL PROPERTY RIGHTS
PROTECTION OF TRADE SECRETS - DOES INDIA NEED A SEPARATE LEGISLATION?
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Dheeresh Kumar Dwivedi
The author is a fourth-year student of B.A. LL.B. at NLIU, Bhopal.
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In this world of the free market, intellectual property laws play a very vital role. They constitute the most important tool to survive in a rather competitive market. Intellectual property law ensures that the rights of an owner of the intellectual property are not being infringed to his prejudice by a third party so that he exclusively3 enjoys the rightful fruit of his labor, skill, and judgment. The author has discussed the various dimensions of the definition of the Trade Secret in India as given by various jurists and identifies various fields of law under which trade secret is protected. The paper deals with the law of contract, the law of equity, and criminal law respectively, along with remedies available for the infringement of trade secrets in India. In conclusion, the author has highlighted the lack of legal protection accorded to Trade Secret and loopholes in the present Draft National Innovation Act, 2008. Law relating to the protection of trade secrets is still at a nascent stage in India since having no specific legislation directly dealing with the subject. In the era of globalization and information technology where the intellectual property of a firm, especially Trade Secrets, forms the core of its business activities, such an important subject cannot be left at the mercy of common law and private contracts. Further, India being a signatory to multiple international conventions protecting Trade Secret, is under constitutional obligation to bring its legal regime relating to the protection of Trade Secret in consonance with its international obligation.
INTERNATIONAL TRADE LAW
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Lipi Sarin
The author is a third-year student of B.A. LL.B. (Hons.) at Hidyatullah National Law University, Raipur.
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Over the past decade, government procurement has come to be one of the most central pillars of International Trade. Various governments have gradually begun to recognize the concept of procurement as an essential aspect of the economic development of their countries. One of the reasons could be the lack of properly well-defined rules and regulations that govern this sector. The Uruguay Round of multilateral trade negotiations resulted in the implementation of the Agreement on Government Procurement (GPA or “the agreement”). Over the past couple of years, the GPA has established itself as one of the key mechanisms in regulating international trade under the World Trade Organization (WTO). The reason behind the implementation of the new Agreement was mainly that the old Agreement failed to address a large number of procurement-related issues, whether they were procedural or whether they questioned the very foundation of the International Law that the GPA was derived. The revised Agreement adopted a more modern and flexible approach with respect to several of its provisions. A more streamlined perspective evolved along with the revised agreement, in terms of procedural provisions and provisions related to the transparency of the system. From the year 1994 until now, the GPA’s continual growth has revolutionized the way International Trade is perceived today. The revised Agreement imbibes within itself the two essential principles of International Trade, as sworn by the preamble of the WTO itself: transparency and non-discrimination. The changes made in relation to these principles have further enhanced the credibility of this Agreement, which was seen to be lacking earlier.
INSURANCE
INSURANCE LAW CONTRACTS - POSITION OF FRAUDULENT DEVICES & FORFEITURE
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Shrayansh Niranjan
The author is a fourth-year student (B.A. LLB Hons.) at Symbiosis Law School, Noida.
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Insurance Law Contracts unlike other contracts are one of Utmost Good Faith as the Insurer undertakes to indemnify all the risk and prospective losses of the Insured. The only method of ascertainment of Risk, which he so promises to make good, is the account of facts and circumstance as presented and deposed, by the Insured and the Insurer stands alien as well ignorant to the situation and resultant risk in the present state of things. So, the duty cast upon the Insured to observe good faith in Insurance contracts supersedes the general duty to observe good faith in all other types of Contracts in practice. The position of law with respect to ‘utmost good-faith’ in the context of Fraudulent Claims by way of Exaggerated Claims and Fraudulent Claims through Fraudulent Devices to promote the insured’s interest is an area of ambiguity and merits its own special treatment vis-à-vis blatant breaches of ‘uberrimæ fidei’. The whole area of law concerning the Fraudulent Devices and thereby a resultant breach of Utmost Good Faith is a total mess and full of ambiguity. Such cases presently observe similar treatment as in the case of Fraudulent Claims made by way of Exaggerated Claims and will lead to the Forfeiture of Present and Future claims. Section 49 of the Criminal Justice and Courts Bill seeks to address this by introducing the concept of 'fundamental dishonesty' in personal injury claims so that where dishonesty is discovered the whole of the claim will be forfeit rather than just the fraudulent part.
THE INSURANCE LAWS (AMENDMENT) ACT, 2015: AN ANALYSIS
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Deeya Ray
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The first law to govern all types of insurance was the Insurance Act, 1938. It provided for strict state control over all insurance businesses. The Life Insurance Corporation then completely nationalized Life Insurance in India in 1956.3 The General Insurance Business (Nationalization) Act, 1972 was brought in with the objective of nationalizing 100 general insurance companies that were then merged to form four companies headquartered in the four metropolitan cities. The Central Government notified the Insurance Laws (Amendment) Ordinance 2014 on 26th December 2014. This gave interim legal standing to the new amendments. It finally became a law on 20thth March 2015 as the Insurance Laws (Amendment) Act 2015 after it was granted Presidential assent. The Insurance Laws (Amendment) Act 2015 makes amendments to three core insurance legislations: Insurance Act, 1938; General Insurance Business (Nationalization) Act, 1972; and the Insurance Regulatory and Development Authority Act, 1999. The recent changes brought by the Amendment Act are a welcome move and are indicative of the parliament’s intention to move towards the economic development of the nation. The act seeks to make the insurance laws more consumer-friendly and this is commendable in a country that claims to be a socialist welfare state. Most of these changes were being demanded by the insurance industry for a very long time. The future of the industry may be held to be secure for the moment.
CORPORATE
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Rohan Kohli
The author is a second-year student (B.A. LLB Hons.) at National Law India University, Bhopal.
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The Insolvency resolution proceedings in India are quite lengthy compared to neighboring countries. Multiple factors contribute to the delay in the resolution process ranging from the multiplicity of legislations to weak institutions, that lead to inordinate delays in the liquidation of companies. The complexity of resolution proceedings becomes evident whenever proceedings are initiated by companies. The main issues in the present litigation system are parallel proceeding cases; Conflicts between SICA and Debt enforcement laws; Conflicts between Winding up Proceedings and the SARFAESI Act; Conflicts between SARFAESI and RDDBFI Act. The Bankruptcy Law Reform Committee was set up by the Ministry of Economic Affairs to study the “Corporate Bankruptcy Legal Framework in India” and submit a final report. The Committee came out with a strategy to repeal many existing laws on bankruptcy and insolvency and draft a law consolidating the existing provisions relating to the insolvency of companies. The committee has laid heavier emphasis on an insolvency framework and a number of professionals providing personalized service that will aid the weak judicial system. The author of this article analyses various provisions of the new Insolvency and Bankruptcy law and how it will affect the present system. As a departure from the normally conceived view of policy changes requiring a great deal of institutional overhaul, the bankruptcy framework does not require major institutional investments. The study attempts to explain how the draft bill can be a revolutionary step in bringing about a change in the present insolvency and bankruptcy resolution in India.
A CRITICAL EVALUATION OF SEBI ICDR FIFTH & SEVENTH AMENDMENT NOTIFICATIONS
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Malcolm V. Katrak and Jigar S. Parmar
The authors are fourth-year students (B.A. LLB Hons.) at S.V.K.M’s Pravin Gandhi College of Law, Mumbai.
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The Securities and Exchange Board of India (SEBI) was established as a statutory body in 1992. The Preamble of the SEBI describes the basic functions of the board as “to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto." In this article, the author emphasizes these inherent values of the SEBI and points out fallacies of the SEBI ICDR Fifth and Seventh amendment act. An Initial Public Offering (IPO) allows a company to generate capital from the public, who, as investors, accede to risks that come with an open market. The companies issue prospectus, an invitation to subscribe, which aids the common man in making informed decisions. The present rules pertaining to the prospectus underwent a regulatory modification by the SEBI ICDR seventh Amendment Notification, which dictates that the abridged prospectus should not exceed five pages. The study attempts to show that these revised regulations create an unnecessary barrier to the information disclosed to the public in an abridged prospectus. The author argues against the mandatory ASBA system envisioned by the ICDR fifth Amendment Notification. The study further examines the role played by the small and institutional investors and the Constitutionality of the Amendments r/w respective Circulars. Finally, this paper urges SEBI to reflect on the fall of retail investor participation and their inconvenience and lack of faith in the Indian Securities Market.
BANKING LAW
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Max Bärnreuther, M.Jur. (Oxford), Maître En Droit (Panthéon- Assas)
The author is a Ph.D. candidate at the Chair for Civil Law, German and International Business Law at the University of Passau, Germany.
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The shadow banking system is a term for the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks but outside normal banking regulations. The regulation of the shadow banking system remains prime task to avoid realization of systemic risk causing negative externalities that harm the global society at large. The national and economic policy makers have been implementing suggestions given by many authors to overcome this weakness in the financial system. The study explains how the regulation of the individual components of the shadow banking sector as well as the regulation of the shadow banking sector as a whole have their flaws. The individual regulation has been put in place for Dealer banks, Wholesale funding, Structured finance, OTC derivatives, and money market funds. The paper analyses each of the abovementioned individually. The present rules implemented by many regulators deal selectively rather than creating a cohesive framework capable of dealing with new shadow banking phenomena that may come into existence in the future as a result of new needs of financial markets. The new shadow banking system would remain unregulated until the regulator implements a further selective response. The study examines three strategies by which a coherent framework could be established namely: numerus clauses, a general anti abuse rule or an abstract-functional rule. Lastly, the study concludes that supplementing the current existent selective approach by forementioned strategies needs to be done to establish a coherent framework.
PHASES AND DIMENSIONS OF NON-PERFORMING ASSETS IN INDIAN BANKING SYSTEM: LEGAL RESPONSE
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Neha Sharma
The author is a fourth-year student (B.A. LLB Hons.) at Rajiv Gandhi National University of Law, Punjab
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Non-performing Assets (NPA) are a measure of bank’s performance and are a crucial factor for determining country’s economic performance. Currently, the Indian banking sector has been facing the problem of rising NPAs that are proving detrimental to the economy. Although, it’s unfeasible to have zero NPAs, the government has been taking many steps from time to time to reduce NPAs. This paper elaborates on range of topics pertaining to NPAs. The paper identifies various factors responsible for rising NPAs in the country. Increase in non-performing assets of banks is chiefly accounted for by switching to system-based recognition of NPAs by public sector banks, deceleration of economic growth, and excessive lending of credit by banks in the past, especially during times of economic boom. The paper then further elucidates on the legal mechanism in place to recover the bad debts by making references to legislations introduced by the government to further strengthen the recovery of dues by the banks and financial institutions. The National Company Law Tribunal (NCLT) has been empowered to adjudicate insolvency resolution for companies whereas for individuals, the Debt Recovery Tribunal (DRT) has been given such jurisdiction. Further, the author examines the efficacy of laws pertaining to NPAs by citing relevant figures and statistics. Lastly, the study concludes that the present issue of rising NPAs has received adequate attention from policy makers which provides a ray of hope in times of crisis.