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...

The Doctrine of Frustration: When Contractual Obligations Become Impossible Contracts are the backbone of commercial transactions, but what happens when circumstances change beyond the control of the parties, making it impossible to perform the obligations under the contract? Contracts form the basis of business transactions, with parties relying on each other to fulfill their obligations. However, there are times when unforeseen events or circumstances arise, rendering it impossible to perform the contract. This is where the doctrine of frustration comes into play. Under section 56 of the Indian Contract Act, 1872, a contract can be discharged on the grounds of subsequent impossibility if an unexpected event or change of circumstances occurs, which was beyond the control of the parties and fundamentally alters the purpose or basis of the contract. The use of the word "impossible" in this context does not refer to literal or physical impossibility but rather the impract...

The principle of prospective operation of statutes is a fundamental aspect of legal interpretation that is crucial to upholding the rights of individuals, and it is essential for legal practitioners, business leaders, and the individuals to understand its implications. The settled rule of interpretation is that any amendment to a statute that affects the legal rights of an individual must be presumed to be prospective, unless it is expressly or impliedly retrospective. This principle is fundamental to the interpretation of all legislation and ensures that the rights of individuals are protected under the law. When a repeal of an enactment is followed by a fresh legislation, such legislation does not affect the substantive rights of the parties on the date of the suit or adjudication of the suit, unless it is retrospective. This means that a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered, as the righ...

  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...