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Vol. I Issue I 2019 MNLUA CORPORATE and COMPETITION LAW REVIEW

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Vol. I Issue I 2019 MNLUA CORPORATE and COMPETITION LAW REVIEW MAHARASHTRA NATIONAL LAW UNIVERSITY, AURANGABAD ~the cradle of future jurists~ CORPORATE AND COMPETITION LAW REVIEW Vol. I Issue I 2019 MNLUA CORPORATE AND COMPETITION LAW REVIEW CHIEF PATRON Hon’ble (Mr.) Justice N.V. Ramana JUDGE, SUPREME COURT OF INDIA & CHANCELLOR, MNLU AURANGABAD PATRON Prof. (Dr.) Kondaiah Jonnalagadda VICE-CHANCELLOR (I/C) MNLU, AURANGABAD MENTOR Prof. (Dr.) V.R.C. Krishnaiah Registrar (I/C) ADVIOSRY BOARD Padma Shri Prof. (Dr.) N.R. Madhava Menon FOUNDER VICE-CHANCELLOR NLSIU Prof. A. Lakshminath FOUNDING CHANCELLOR, DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY, VISAKHAPATNAM PRO-CHANCELLOR EMERITUS AND FOUNDER VICE-CHANCELLOR, CHANAKYA NATIONAL LAW UNIVERSITY, PATNA Hon’ble Justice R.M. Borde Judge, Bombay High Court Bench at Aurangabad Hon’ble Justice S.V. Gangapurwala Judge, Bombay High Court Bench at Aurangabad Prof. (Dr.) Ranbir Singh VICE-CHANCELLOR NATIONAL LAW UNIVERSITY, DELHI Prof. (Dr.) R. Venkata Rao VICE CHANCELLOR THE NATIONAL LAW SCHOOL OF INDIA UNIVERSITY BANGALORE Prof. (Dr.) N. Balu FORMER VICE-CHANCELLOR NATIONAL UNIVERSITY OF ADVANCED LEGAL STUDIES, KOCHI Prof. (Dr.) S. Surya Prakash VICE-CHANCELLOR, DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY, VISAKHAPATNAM Prof. Y.R. Hara Gopal Reddy FORMER VICE-CHANCELLOR, ACHARYA NAGARJUNA UNIVERSITY Prof. (Dr.) B.P. Panda FORMER, VICE CHANCELLOR, MAHARASHTRA NATIONAL LAW UNIVERSITY, MUMBAI EDITOR Prof. (Dr.) Kondaiah Jonnalagadda PROFESSOR OF LAW AND DEAN MNLU, AURANGABAD STUDENT EDITORIAL BOARD Mr. Divyanshu Goyal Ms. Manasvi Sharma Ms. Shauree Gaikwad Mr. Abhishek Jha Mr. Amit Nagar Mr. Anuj Agrawal Ms. Chetna Shrivastava Ms. Kshemya Nair Ms. Nikita Mohapatra Mr. Sayan Panda Mr. Vaibha Dadhich Editorial Note MNLU Corporate and Competition Law Review I am delighted to introduce the Maharashtra National Law University Aurangabad- Corporate and Competition Law Review the first law journal of the University. We have received research articles, case comments from more than 170+ person including from outside the country. It is consists of different themes of contemporary relevance on Corporate and Competition. The present volume deals with topics relating to A. Mitigation of Damages Under the United Nations Convention on Contracts for the International Sale of Goods (UN CISG). B. Competition Commission of India: Saving it by Urgent Reforms. C. Coal India Ltd. V GOCL & Ors. D. Conflict in Global Currency Issues. E. The Intellectual Property Rights and Competition Law: A Comparative Analysis (2015). F. Ease of doing Business and Public Private Partnership Projects in India. G. Competition Regulations and Corporate Governance. H. Issues and Challenges Pertaining to Executive Compensation. I. An Analysis of the Relationship between Company Performance and Independent Directors. J. IBC-A Game Changing Law for Corporate Insolvency. K. Uniqueness of Class Action Suites in India: Reason from Indian Perspective. L. Demystifying the Benami Law: The Favoured Position and the Challenged. M. Safeguarding the Breach Of Duty By Directors: An analysis of the business judgment rule in India. N. Leniency Program and its effects on Indian Market. O. Securities Fraud- Issues and challenges for Regulators in India. I would like to thank Dr. S. Surya Prakash, Vice-Chancellor of DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY, VISAKHAPATNAM to provide me this opportunity. I congratulate all the members of the editorial team. I also express gratitude and sincere thanks to our Advisory Panel for their support and guidance. Last and but not the least I express my heartfelt thanks to all authors to repose confidence on MNLU, Aurangabad for bringing this publication to contribute in the subject to Corporate and Competition Law. This first volume of CCLR is a initiative of MNLU-A Family members I thank one and all for their support. EDITOR Prof. (Dr.) Kondaiah Jonnalagadda PROFESSOR OF LAW AND DEAN MNLU, AURANGABAD TABLE OF CONTENTS Mitigation of Damages Under the United Nations Convention on Contracts for the International Sale of Goods (UN CISG) Dr. Mohammed Zaheeruddin………………………….1 Competition Commission of India: Saving it by Urgent Reforms Krishnan Mahajan & Yogesh Pratap Singh………….15 Coal India Ltd. V GOCL & Ors. Eluckiaa A. and Anwesha Pal…………………..29 Conflict in Global Currency Issues Ajit Kaushal……………………………………..36 The Intellectual Property Rights and Competition Law: A Comparative Analysis (2015) by K.D. Raju Dr. Vidhi Madaan Chadda……………………42 Ease of doing Business and Public Private Partnership Projects in India Pallavi Khanna………………………...45 Competition Regulations and Corporate Governance Shweta Desai and Kumkum Shah……………57 Issues and Challenges Pertaining to Executive Compensation Yash Pandey…………………67 An Analysis of the Relationship between Company Performance and Independent Directors Shreshth Balachandran……………81 IBC-A Game Changing Law for Corporate Insolvency Himanshu Shembeka………………………99 Uniqueness of Class Action Suites in India: Reason from Indian Perspective Prasad Hegde and Ojaswi Pathak……………..113 Demystifying the Benami Law: The Favoured Position and the Challenged Sakshi Ajmera………………………131 Safeguarding the Breach Of Duty By Directors: An analysis of the business judgment rule in India Abhu Sonal Dash and Mahima Gherani………………..137 Leniency Program and its effects on Indian Market Abhijit Sinha and B. Shravya……………………….147 Securities Fraud- Issues and challenges for Regulators in India Dr. Kondaiah Jonnalagadda…………………………161 MITIGATION OF DAMAGES UNDER THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS (UN CISG) ~ Dr. MOHAMMED ZAHEERUDDIN ABSTRACT: A party who relies on a breach of contract must take such measures as are reasonable in the circumstances to mitigate the loss, including loss of profit, resulting from the breach. If the party invoking the breach of contract fails to take such reasonable measures, the party in breach may request for a reduction in damages in the amount in which the loss should have been mitigated. As such, failure to take reasonable measures does not result in the injured party’s liability to pay damages but the injured party cannot recover the damages for the loss, which could have been avoided. The type of mitigation measures adopted by the party claiming damages must be reasonable in the circumstances of the case. KEYWORDS: Seller, buyer, mitigation of damages, UN CISG, UNIDROIT Principles. 1. INTRODUCTION: The United Nations Convention on contracts for International Sale of Goods (UN CISG), 1980 applicable to contracts for the international sale of goods. The Convention imposes certain obligations on the seller1 and buyer.2 If there is any breach of obligations imposed under the contract or the Convention, the CISG provides different remedies to the aggrieved parties, including claiming of damages under articles 74-77. Articles 45 (1)(b) and 61 (1)(b) provide that the aggrieved buyer and the seller, respectively, may recover damages as provided in articles 74 to 77 “if the other party fails to perform as required by the contract or this Convention.”3 The claim of damages under CISG is subject to certain conditions provided in sections 74-77. According to article 74, the damages for breach of contract by one party consist of a sum equal to the loss suffered by the other party as a consequence of the breach. Article 75 provides that if a contract is avoided and made a substituted transaction, a party may recover the difference between the contract price and the price in the substitute transaction. According to article 76, if there is no substituted transaction, a party may recover the difference between the price fixed by the contract and the current price at the time of avoidance of contract. The damages payable under articles 75 & 76 are in addition to recovery of damages under Article 74. Article 74 deals with general rule for measuring damages. Dr. Mohammed Zaheeruddin, Associate Professor, College of Law, United Arab Emirates University (UAEU), Al Ain, United Arab Emirates, P.O. Box No. 15551, Telephone No. 00971-50-1383556. E-Mail: [email protected] 1 Articles 30 to 44 of CISG. 2 Articles 53 to 60 of CISG. 3 UNCITRAL Digest of case law on United Nations Convention on Contracts for the International Sale of Goods, (2016), page 331, available athttp://www.uncitral.org/pdf/english/clout/CISG_Digest_2016.pdf. 1 | P a g e The damages recoverable under articles 74, 75 & 76 are liable to be reduced if it is established that the aggrieved party failed to mitigate these damages as required by article 77. The reduction is the amount by which the loss should have been mitigated.4 Article 77 applies to all cases of liability to pay damages for breach of contract.5 If an aggrieved party does not request damages, whether by way of an affirmative claim or by way of set-off, article 77 does not apply. The injured party’s failure to mitigate loss within the meaning of article 77 does not prevent him from asserting other remedies.6 The principle that a party must mitigate loss that reasonably can be avoided is generally recognized in domestic laws, but is expressed in different way and is applied with varying degrees of emphasis.7 The mitigation of damages rule is also found in the UNIDROIT Principles of International Commercial Contracts, 2016. According to the UNIDROIT Principles, the non-performing party is not liable for harm suffered by the aggrieved party to the extent that the harm could have been reduced by the latter party’s taking reasonable steps.8 The UN CISG specifically provides that a party must mitigate the loss that can be reasonably avoided and a party who fails to take such reasonable measures to mitigate the loss cannot recover damages for the loss, which could have been avoided.9 The object of this paper is to examine the scope of article 77 of the UN CISG that deals with mitigation of damages, with the help of decided case law. There is no duty on the injured party to mitigate the damages, however, if the injured party claims damages, the party in breach may claim a reduction in the damages in the amount by which the loss should have been mitigated.
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