"The judicial process is intended not merely to identify the existence of a wound but also to provide the legally permissible remedy for its redressal."

-A division bench of the Madras High Court observed during court proceedings in a long standing dispute

Delhi High Court’s Push for Contractual Obligation Over Foreign Sanctions

The Delhi High Court last week asked SAP to restore its services to Nayara in a win for the latter but exposing a risk faced by multinational companies when their contractual obligation is posed against foreign sanctions. SAP had argued that EU sanctions imposed on Nayara limited its ability to continue servicing the company. But, the court found that the Indian contracts did not expressly permit suspension on that basis. For businesses, the message here essentially is that sanctions exposure cannot necessarily be managed simply by exiting an Indian contract. Multinationals may instead face competing legal obligations, operational disruption and potentially expensive litigation. For Indian companies the ruling strengthens the practical value of contractual protections against unilateral suspension. The bigger commercial question is whether global technology providers will now price greater geopolitical and sanctions risk into Indian contracts or will broader termination rights enter the fray.

Key Rulings:

• NCLAT holds that suspended directors of a corporate debtor must give confidentiality undertaking to have access to the resolution plan

Courts: 

• Delhi High Court directs SAP to restore software services for Nayara Energy saying that EU sanctions cannot override contracts and contractual obligation

• Supreme Court division bench gives a split verdict on whether the issue of panel for appointment of election commissioners be referred to a larger bench or not. 

• Supreme Court flags concern over manner in which Income Tax officials treat communication between attorneys and their clients, said there is a need to determine the kind of communications that would be protected during tax investigations

• Supreme Court refuses to halt forensic investigation of Fortis transactions in relation to the dispute involving Daiichi and Singh brothers, said probe to go on without being influenced by the observations made by the high court

• A PIL is filed in the Supreme Court seeking action against chief election commissioner Gyanesh Kumar following an investigative journalism report flagging concerns over functioning of the poll panel

• Petitions relating to the CEC controversy filed before the Bombay High Court, one urges for restoration of deleted names from the SIR list, another flags procedural violations in the process in Maharashtra

Quasi Courts:

• SEBI settles proceedings against five Adani firms in relation to the Hindenburg allegations after the firms paid 15 million rupees towards settlement without admission or denial

• NCLT approved the amalgamation scheme of Vidarbha Industries Power with Adani Power

Other:

• The Supreme Court expressed concern over inadequate infrastructure for NCLT, NCLAT during a hearing days after it was informed that NCLT is operating in half days over lack of resources

The Big Listings: 

• Sep 28: Supreme Court to hear case concerning front of pack labels for displaying warnings on processed foods

• Oct 5: Securities Appellate Tribunal to continue hearing appeal by Jane Street challenging SEBI’s move to allegedly refuse access to important documents to the firm in the case against it

* The dates of hearing can change and a concrete list is prepared just a day before

Legal Moves:

• Centre reappoints Additional Solicitor Generals:

• K Arvind Kamath in Karnataka High Court

• B Narsimha Sharma in Telangana High Court

• Pramit Mohanty made partner at Lex Consult in Banking & Finance practice