India Business Law Journal – October 2023

The almighty stamp

Court judgment leaves disputes community unhappy

Earlier this year, the Supreme Court of India delivered a controversial ruling, which stirred heated debates and concern among disputes lawyers across India.

The judgment, rendered by a five-judge Constitutional Bench in the case of NN Global Mercantile Pvt Ltd v Indo Unique Flame Ltd, has visibly unsettled the arbitration community. The verdict declared that agreements that lacked proper stamps, or with insufficient stamping, are deemed invalid and unenforceable in the eyes of the law.

Our cover story, Stirring up a hornet’s nest, talks about this landmark decision and its repercussions. Of a five-judge bench, a majority of three judges asserted the applicability of the Stamp Act to all agreements, encompassing both local and foreign arbitration contracts.

Conversely, the minority opinion leading to the fractured nature of the judgment argued that section 11(6A) of the Arbitration and Conciliation Act of 1996, which mandates the appointment of an arbitrator, could permit for such unstamped arbitration proceedings by paying a fine.

The minority opinion further contended that the Stamp Act does not invalidate unstamped instruments, emphasising further that the validity of each case hinges on specific facts and circumstances. This ruling will hold significant implications for both local and cross-border businesses.

The decision of the five-judge bench has now been placed in front of a full bench (comprising seven judges) pending judgment.

In Making room for confessions, we highlight the new amendments and revisions to the competition law. Amended with the idea of speedy resolutions of antitrust cases and reduced litigation, the revised law received general approval, and some select reservations.

Meanwhile, the Competition Commission of India (CCI) has gathered steam again after a bureaucratic lull. Ravneet Kaur, the first female chairperson of the CCI, assumed office in May, succeeding Ashok Kumar Gupta who retired in October 2022. The delayed appointment had caused a considerable backlog. Moreover, the antitrust watchdog lacked the necessary quorum of three commissioners for seven months, rendering it partially non-functional.

Despite this setback, on 23 August 2023, the CCI took a significant step by releasing draft rules for settlement and commitment under section 48A of the Competition (Amendment) Act, 2023. The rules reflect the body’s ongoing efforts to streamline and enhance the competition regulatory framework under Kaur.

We proudly present this year’s A-List, a reflection of the commitment, consistency and continuing growth of the legal industry and its leadership. In 2023, India’s legal landscape underwent rapid changes, which necessitated dynamic lawyering due to swift government modifications and the rapid introduction of new laws.

India’s top legal professionals played a crucial role in navigating business requirements and addressing regulatory shifts, redrawing and influencing public discourse. The introduction of foreign firms was one such significant development, while robust remedies for other emerging issues were implemented.

India Business Law Journal recognises these exceptional legal minds through the A-List, celebrating industry pioneers and emerging leaders based on the insights and recommendations received from lawyers of various domains.

Our Vantage Point in this issue looks at the epoch of digital transformation, where data reigns as the new bedrock of India’s economic cornerstone, with the passing of the Digital Personal Data Protection Act, 2023.

Max Life Insurance Company in-house counsel Richa Relhan writes that legitimising data protection has become crucial in an era where digital interactions are vital to Gen Z and Gen Alpha.

With data breaches and unauthorised sharing on the rise, the act signifies India’s commitment to defining a robust data protection framework. It seeks to give citizens control over their data while further maintaining the intricate balance between privacy and innovation in a globally connected landscape.

The Digital Personal Data Protection Act, 2023, emerges as a response to India’s surging internet usage and the subsequent undermining of personal privacy, with an emphasis on individual rights in an era of escalating digital transactions.

Treating data similar to physical property, the act enshrines explicit consent and data localisation, and advocates stringent penalties for violations. Originating from the 2017 Puttaswamy judgment, the act seeks to incorporate various legislative amendments while addressing industry concerns.

The act, rooted in the constitutional right to privacy, seeks to strike a delicate balance between individual rights and broad societal interests. As the implementation of the act unfolds, potential conflicts between the judiciary and legislature loom, offering opportunities for further refinement.