RULES OF LAW

Unstamped arbitration agreements are not enforceable in law, and failure to pay the requisite stamp duty can have serious implications on the enforceability of the agreement. The recent decision by the Supreme Court in Civil Appeal No(s). 3802-3803 of 2020 N.N. Global Mercantile Private Limited Versus Indo Unique Flame Ltd. & Ors. has clarified the legal position on the enforceability of unstamped arbitration agreements. The Court held that an instrument, which is exigible to stamp duty, such as an arbitration agreement, cannot be said to be enforceable if it is not stamped or is insufficiently stamped. This decision has far-reaching implications on the enforceability of unstamped agreements containing arbitration clauses, and has redefined the legal position on this issue. Section 2(h) of the Contract Act defines a contract as an agreement enforceable by law, while Section 2(g) defines an agreement as a promise or set of promises enforceable by law. An unstamped agreement, the...

  Section 186 Loan and Investment by Company: A Comprehensive Guide to Compliances Companies frequently engage in loan transactions and investments to finance their operations and grow their business. However, these transactions need to comply with legal requirements to prevent fraud and protect stakeholders' interests. The Companies Act, 2013, provides regulations for loans and investments made by companies, including the maximum limit, conditions for exemptions, and compliances to be followed. In this article, we will discuss Section 186 of the Companies Act, 2013, and the checklist for its compliances. Section 186 of the Companies Act, 2013, restricts companies from directly or indirectly giving loans, guarantees, or securities to any person or body corporate exceeding 60% of its paid-up share capital, free reserves, and securities premium account, or 100% of its free reserves and securities premium account, whichever is more. The word "person" above does not include a...