On 5 May 2017, a day after the recent Banking Regulation (Amendment) Ordinance, 2017 (Ordinance) received Presidential assent, the Reserve Bank of India (RBI) issued a circular on ‘Timelines for Stressed Assets Resolution’ (Circular). The Circular amends the existing “Framework for Revitalising Distressed Assets in the Economy – Guidelines on JLF and CAP” dated 26 February 2014 (JLF Framework) and mandates members of a joint lenders forum (JLF) to follow strict timelines in implementing the corrective action plan (CAP) or suffer penal consequences for non-compliance.

Introduction

The term ‘dispute’ assumes great importance under the Insolvency and Bankruptcy Code, 2016 (Code). This is because under Section 9(5)(ii)(d) of the Code, an operational creditor’s application for initiating corporate insolvency is liable to be rejected if a ‘notice of dispute’ in relation to ‘existence of a dispute’ is received by such an operational creditor from a corporate debtor. The term ‘dispute’ is defined in Section 5(6) and referred to in Section 8(2) of the Code in the following manner:

Securities and Exchange Board of India (SEBI) in its meeting today has taken decisions that will make M&A and private investment in public equity (PIPE) transactions easier.

Open Offer Exemption for Distressed Public M&A

For several years, India has had various overlapping laws and adjudicating authorities for dealing with financial distress and insolvency, which has often resulted in multiple proceedings being initiated before different forums in situations of distress. This in turn has resulted in ineffective and delayed recovery or restructuring and placed excessive strain on lenders.

Background

Overview

The following propositions for cross-border security and insolvency law in Scotland have recently been supported at first instance in the Court of Session:

1. a floating charge need not be valid and enforceable under the law governing foreign assets charged in order to be considered valid and enforceable over such assets for the purposes of appointing an administrator out of court under the Insolvency Act 1986 (the IA);

Preamble

The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘Code’) received the assent of the President of India on May 28, 2016.

Background

The Board constituted under the chairmanship of Mr MS Sahoo has recently rejected an application for registration as an insolvency professional (IP) under regulation 7 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (IP Regulations) through its first regulatory order.

Factual Matrix

In a recent order admitting a petition for insolvency resolution filed by Essar Projects India Limited (Operational Creditor) against MCL Global Steel Private Limited (Corporate Debtor), the National Company Law Tribunal (Mumbai Bench) (NCLT) has clarified what constitutes a ‘disputed debt’ within the meaning of Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016 (Code) and Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

Facts of the case