Re-Recognition of Law You Should Be Congratulated If You Live in a Country Having a Better Situation Than

Re-recognition of Law You should be congratulated if you live in a country having a better situation than

pg 72 Taiwan

M&A DEALS: TECHNOLOGY pg International Arbitration - No pg ARBITRATION IN THAILAND pg SECTOR IS THE DRIVER 86 going back: stay green to be seen 50 TAKES A BIG STEP BACKWARDS 80 Equality drives innovation

Equality is a powerful multiplier of innovation and growth. It inspires creativity and a sense of belonging. At Accenture we’re committed to championing a culture of equality where our people are empowered to be their best, professionally and personally. Because as equals, anything is possible.

accenture.com/equality-in ERA 2 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 3 &5(',76

Ƭ Ƭ ǦǦ

+2125$5< $'9,625<%2$5'

/HJDO0HGLD*URXS $SULO_9ROXPH;,,_,VVXH,

ǤǤ Ǥ ǡ )LUVWSXEOLVKHGLQ0DUFK /HJDO(UDDLPVWRSURYLGH´LQWKHWUHQFKHVµHGLWRULDO WKDWJLYHV&RPPRQ0DQ/DZ6WXGHQWV/DZ\HUV %XVLQHVV/HDGHUVDQG&RUSRUDWH0DQDJHPHQWVD GHWDLOHGRXWORRNRIWKHFXUUHQWOHJDOVFHQDULR

Ƥ ´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·SDUWLFXODUFLUFXPVWDQFHV7KHRZQHUVKLSRIWUDGHPDUNV LVDFNQRZOHGJHG1RSDUWRIWKLVSXEOLFDWLRQRUDQ\SDUWRIWKHFRQWHQWVWKHUHRIPD\EHUHSURGXFHGVWRUHGLQ DUHWULHYDOV\VWHPRUWUDQVPLWWHGLQDQ\IRUPZLWKRXWWKHSHUPLVVLRQRIWKHSXEOLVKHULQZULWLQJ 7LWOH5HJLVWUDWLRQ1R0$+(1*7&51,1R0$+(1* ERA 2 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 3 Editor’s Note

Scheming your way into an arrangement or compromise?

Harmoniously reading the Companies Act and the transaction has taken place and in respect of which Insolvency and BankruptcyNot Code (IBC), the Supreme allowed! the NCLT has made an order. Such persons cannot Court laid down a noteworthy legal position while circumvent the repercussions of being barred under dismissing an ex-promoter’s petition against the Section 29A of the IBC and become eligible to propose a NCLAT’s order making the ex-promoter ineligible to scheme of arrangement or enter into a compromise with propose a scheme of arrangement defined under the creditors under Section 230 of the Companies Act. Section 230 of the Companies Act. No conversation can be complete without The Apex Court noted two critical facts. One, the ex- acknowledging that all of us are together in this promoter was barred from the bidding process under stressful time as someone or the other among our family Section 29A of the IBC as he was a defaulting promoter or friends, acquaintances or colleagues, are fighting a under the insolvency process. And two, the NCLT had brave battle against COVID-19. In these difficult times, ordered the company’s liquidation. we must remember to be empathetic and know that we are all trying our best to stay sane, work hard, and stay In such a factual scenario, the question before the Court safe. was, could the ex-promoter barred under Section 29A of the IBC take control of the company by proposing As the editor and an ardent well-wisher of the legal a scheme of arrangement under Section 230 of the fraternity, I wish to reiterate to all our wonderful Companies Act? readers what every frontline worker and every person in the medical fraternity is sincerely asking us to do: The answer was no. 1. Stay home. 2. Ensure everyone you know stays home. 3. If you have to step out, wear a mask. 4. Talk to those The Court laid down that when the process of invoking around you and help them understand this situation... a scheme of arrangement traced its origin to liquidation we cannot take this lightly. 5. Get the vaccine when it’s proceedings initiated under the IBC, it became necessary your turn. to read both the sets of provisions in harmony and hence the rigors of IBC will apply. And while we stay at home, study/work online, and spend quality family time, we are sure this April edition This is a cautionary note for every person who has of Legal Era with its array of exciting reads in addition to been a defaulting promoter or is in the management or the usual features will keep you constructively engaged. control of a corporate debtor in which a preferential, Here’s wishing you all positivity and growth through undervalued, extortionate credit, or fraudulent consuming cutting-edge knowledge and staying indoors.

Aakriti Raizada ERA 4 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 5 BY THE PEOPLE readers’notes FOR THE PEOPLE

Well done Legal Era on providing a forum for topical areas of legally commercial interest to be canvassed! The new Australian foreign investment rules raise the bar for non- Australian investors to overcome. It is great to be able to describe these new rules based on our experience in a manner which is hopefully both helpful and relevant. Richard Lustig Partner, Baker & McKenzie

My overall experience of collaborating with Legal Era magazine was great. They provide excellent insights and have extensive industry knowledge, which is reflected in their magazine. Mansoor Ali Shoket Partner, Reglaw Chambers

As a legal magazine, Legal Era has kept us really updated and gave a different perspective to the contemporary issues. The magazine, month on month comes up with the most pertinent of the legal policy and regulatory updates which I personally enjoy reading. As the content is very qualitative, it gives us a good platform to share the articles, notes and quotes written by our attorneys. Noorul Hassan Joint Partner, Lakshmikumaran & Sridharan

The magazine is very well-curated, and the authors’ expertise is evident by how the content is presented and written. The topics are always interesting and relevant, and they are addressed in a simple yet professional manner. I am glad that my article has been featured in this magazine and look forward to contributing again.

Laura Voda Counsel, Fichte & Co Legal ERA 4 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 5 QUICK GLANCE

RECENT TRENDS 46 Artificial IN THE Intelligence AND INDIAN Trends In INTELLECTUAL PROPERTY LANDSCAPE Patenting 44 International 50 Arbitration NO GOING BACK STAY GREEN TO BE SEEN Will Section viii CARVE-OUTS Survive GSK v. Teva? 66 56 BREXIT impact on jurisdictional clauses ERA 6 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 7 QUICK GLANCE 46 Artificial Intelligence AND Trends In Re-recognitionRe-recognition Patenting

You should be congratulated if you live in ofof aLaw countryLaw havingTaiwan, a better72 writes situation the author than International 50 Arbitration NO GOING BACK STAY 76 thailand GREEN Solidifying TO BE SEEN Data Protection in

80 ARBITRATION IN THAILAND M&A DEALS TAKES A BIG STEP BACKWARDS Foreign Representatives Subject to Harsh Criminal Penalties

As the vast majority of disputes subject to arbitration in Thailand are governed by Thai laws, foreign representatives, advocates and lawyers have been effectively shut out of the system

TECHNOLOGY SECTOR IS THE DRIVER 86 ERA 6 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 7 contents 44insights RECENT TRENDS IN THE INDIAN INTELLECTUAL PROPERTY LANDSCAPE

Pravin Anand Managing Partner Anand & Anand

50Take on Board International Arbitration - No going back: stay green to be seen

Gautam Bhattacharyya Victoria Spilkin Partner Senior Associate Reed Smith

56Zoom In BREXIT impact on jurisdictional clauses

Huay Yee Kwan Justin Gan Cherilyn Koh Partner Senior Associate Associate Stephenson Harwood

60know the law ARTIFICIAL INTELLIGENCE AND TRENDS IN PATENTING

Ritika Ahuja Jasbir Singh Director Managing Associate Anand & Anand ERA 8 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 9 66ViewPoint Will Section viii Carve-Outs Survive GSK v. Teva?

Brian H. Gold Grant S. Shackelford Associate Associate Buchanan Ingersoll Rooney

72ViewPoint 76 Take on Board Re-recognition of Law Solidifying Data Protection in Thailand

C. F. Tsai Founder Dhiraphol Suwanprateep Partner Deep & Far Baker McKenzie

80Insights ARBITRATION IN THAILAND TAKES A BIG STEP BACKWARDS

Daniel Chernov Managing Partner Siam ADR

86Zoom in M&A DEALS: TECHNOLOGY SECTOR IS DRIVER

Simon Fielder Surabhi Singhi Partner Senior Associate Bird & Bird REGULARS 04 Editor’s note 34 Within The Circle 20 Nation@Glance 05 Readers’ Notes 36 LATERAL MOVES 28 World@Glance 10 Top Stories 92 Fun ‘n’ Frolic ERA 8 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 9 LE Top Stories

Supreme Court Sets Aside NCLAT Order in the Tata-Mistry case: Big win for Tata Sons

As to the background of the case, Cyrus Mistry in December 2012 took over as Chairman of Tata Sons. On 14 October 2016, he was removed from the post by the majority of the Board of Directors of Tata Sons.

On 6 February 2017, an Extraordinary General Meeting was convened and the shareholders voted for the removal of Mistry from the board of Tata Sons. N Chandrasekaran took over as Executive Chairman of Tata Sons.

The present legal battle has its genesis in the company petitions filed by Shapoorji Pallonji The Supreme Court (SC) on 26 March 2021, has Group (SP Group) under Sections 241 and 242 of allowed the appeal of Tata Sons Limited wherein the Companies Act. Two shareholders have moved the company had challenged the order of the to the National Company Law Tribunal (NCLT) over National Company Law Appellate Tribunal (NCLAT) the decision of the company for removing Mistry’s that had directed the reinstatement of Cyrus Mistry and they alleged that it amounted to “oppression” as the Chairperson of Tata Sons Ltd. of minority shareholders and “mismanagement”.

The SC bench comprising of Chief Justice of The NCLT had dismissed the petition of the India SA Bobde, Justices AS Bopanna and V shareholders and an appeal was filed by them Ramasubramanian pronounced the judgment. The before the NCLAT. The Appellate Tribunal had Court has reserved its order on 17 December 2020 proceeded to overturn the order of the NCLT in the instant matter. and against the NCLAT’s order appeals were filed before the Apex Court. The Top Court ruled in favor of Tata Sons and answered all the legal questions in detail. The Advocate Harish Salve represented Tata Sons Court held that the actions of Tata Sons Board Ltd. and Senior Counsel CA Sundaram and Shyam wherein it decided to remove Mistry from the Divan represented Shapoorji Pallonji Group (SP post of Chairperson of the company did not Group) while Senior Advocate Janak Dwarkadas amount to oppression of minority shareholders or represented Cyrus Mistry. mismanagement. The Top Court stated that both the parties (Tata Sons & Cyrus Mistry) can work out Contentions on behalf of Tata Sons on their separation terms. The contentions of Tata Sons was that the Appellate A long battle was going on between Tata Sons and Tribunal granted such a relief to Mistry that was Mistry. The order of the Appellate Tribunal dated not pleaded for and it also lack jurisdiction to 18 December 2019 was challenged by both the declare the company as a ‘Public Company’ when it parties before the SC which had put a stay on the is a ‘Private Company’ u/s 2(68) of the Companies said order on 10 January 2020. Act 2013.

The NCLAT in its judgment passed in 2019 ruled that It was pointed out before the SC that SP group the proceedings of the Board meeting of Tata Sons owns 18 percent stake of the company and Tata wherein Cyrus Mistry was removed as Chairperson Trusts is the holder of 68 percent stake. Hence, the was illegal. The Appellate Tribunal had directed order of the Appellate Tribunal gives control over Tata Sons to reinstate Mistry. companies to minority shareholders. ERA 10 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 11 Top Stories

It was also contended that Cyrus Mistry was not and trust. It was mentioned that the developed appointed as Executive Chairman under any right in the context of a statutory framework which of the minority shareholder. The order of the restricted the role of private trust. Appellate Tribunal of reinstating Mistry in the Tata Sons was against the majority decision of the Another contention was that Tata Trusts could not company. vote on its own shares between 1964 and 2000 due to statutory restrictions and it was a public trustee On behalf of Tata Sons it was submitted that the appointed by the Central Government who could order of the Appellate Tribunal was against the vote on its shares. law and cause interference with Sec. 242 of the Companies Act. On the issue of ‘oppression or mismanagement’ it was urged that a company that is a profit-making The Companies Act, 2013, Section 242 provides that company is not a criterion for deciding whether or if the Tribunal is of the opinion that the facts would not there is oppression or mismanagement. It was justify that it was “just and equitable” that the pointed out that the amendment to the Companies company should be wound up, but such an order Act has made substantial changes regarding the could prejudice the members of the company, then same. the Tribunal can resort to a slew of measures laid down under the said Section. It shall also include It was submitted that the amendment to the removal of Managing Director or any other director Companies Act has expanded the powers of the and appointment of new directors. Tribunal u/s 242 up to a great extent and the Tribunal has absolute power to intervene in the It was argued that bad business decisions, while cases of oppression or prejudice to a member of they may cause loss to the company, cannot be the company under the said provision. classified as ‘mismanagement’ under Section 241 of the Companies Act, 2013. It was further submitted Another contention that was raised by the SP group that a member of Tata Sons cannot complain about was that ‘Articles of Association’ cannot be used by other Tata companies. the company to claim absolute rights. It was urged that there should be some kind of independence in The contention on behalf of Tata Sons was that the decision making and it cannot be a family affair. A Appellate Tribunal has limited power to appoint public charitable trust (the largest shareholder of a director of the company according to Section Tata Sons is Tata Trusts which is a public charitable 242(2)(k) of the Companies Act. Sec. 242 deals with trusts) cannot legally run such companies. the ‘powers of the Tribunal’ and appoint directors is provided under Section 242(2)(k) that is not SP Group contended that the management of a absolute. company is its’ ‘board’. Hence, the Director may take advise but has to act independently and It was further argued that the NCLAT has removed his acts cannot be based on any compulsions or the Executive Chairperson of the company N coercions. Chandrasekaran that was appointed by the board and it ordered for reinstatement of Mistry to On behalf of Cyrus Mistry, Advocate Divan the post. It was urged that it does not have such submitted that the company has violated the absolute powers under Section 242(2)(k) to appoint statutory provisions while removing Mistry from Directors. the post of Chairperson. The procedure adopted by the company was against the concept of ‘corporate democracy’. It was further submitted Contentions on behalf of SP Group and Cyrus that Ratan Tata overpowered the functioning of Mistry the company and he in between took all the major decisions himself. On the other hand, the contentions were made on behalf of SP Group was regarding the relationship Some of the provisions of the Companies Act between Tata Sons and SP Group. The relationship were highlighted by the Advocate representing was 70 years old and was one of mutual relationship Mistry that was allegedly violated by Tata Sons. It ERA 10 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 11 LE Top Stories

includes - Sec. 166 which deals with the mandate entities of Tata Group in lieu of the shares held by of independent functioning of the Director. Sec. them in the unlisted Tata Sons. 118(10) proper secretarial rules were not followed by the company that has to be followed even The SP Group in exchange, wanted grant of shares while giving of notice. The company has allegedly in listed companies of the Tata Sons Group. They violated mandates provisioned under Sec. 149 of further asserted that in case Tata Group intended the Act provides that the Board has to manage the to maintain a certain shareholding level and were company and not the majority shareholder. not willing to part with stocks according to the separation proposal, SP Group was willing to Separation Plan by SP Group: accept shares of Tata Consultancy Services Ltd. or cash. In October 2020, the SP Group offered to settle the dispute and presented a plan of separation in However, Tata Sons rejected the offer as acceptance the form of an affidavit in the Supreme Court. They of the offer would have led to spreading of the also suggested a share-swap arrangement in listed dispute to the other group companies as well.

Supreme Court: ‘Burden of proof’ on Accused Under NI Act that Cheque was not Issued against any debt or liability

provisions of the Act and the onus shifts to the accused on proof of issuance of cheque, to rebut the presumption that the cheque was issued for discharge of any debt or liability in terms of Section 138 of the Act.”

A criminal appeal was filed before the Apex Court against the judgment of the Himachal Pradesh High Court (HC) wherein the HC held that the appellant was guilty of offenses under Section 138 of the NI Act.

The factual matrix of the case is that the appellant had brought non-woven fabric from the respondent. The respondents delivered the goods The Supreme Court (SC) on 9 March 2021, in the to the appellant by a public carrier truck. case titled Sumeti Vij (Appellants - Originally Accused) v. M/s Paramount Tech. Fab Industries The appellant issued two cheques in the name of (Respondents - Originally Complainant) stated that the respondents from her account of the Punjab the burden of proof to show that a cheque was not National Bank to meet the legal existing and issued for discharge of any debt or liability in terms enforceable liabilities. The cheque bounced and of Section 138 of the Negotiable Instruments Act the respondent sent two legal notices to the (NI Act) is on the accused. appellant but did not receive any response within the statutory period. The SC bench comprising Justices Indu Malhotra and Ajay Rastogi stated that Section 139 of the NI The respondents filed two separate complaints Act creates a presumption in favor of the holder of against the appellant under Section 138 of the NI the cheque that the same was received in discharge Act. During the trial, the complainant examined of a debt or liability. three witnesses and placed reliance on the documentary evidence. The Top Court stated, “There is a mandate of presumption of consideration in terms of the The appellant’s statement was recorded under ERA 12 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 13 Top Stories

Section 313 of the Code of Criminal Procedure the presumption that the cheque was issued not (CrPC) by the Trial Court. The appellant claimed for the discharge of any debt or liability in terms of innocence and pleaded false implication in the Section 138 of NI Act. case. However, the appellant did not lead any evidence in defense. The Court stated that it is well settled that the proceedings under Section 138 of the NI Act are The Trial Court acquitted the appellant and held quasi-criminal in nature, and the principles which that the respondent had failed to establish the apply to acquittal in other criminal cases are not material/goods were delivered to the appellant for applicable in the cases instituted under the Act. which the cheques were issued. The bench clarified that “Under Section 139 of the An appeal was filed against the said order before Act, a presumption is raised that the holder of a the High Court (HC). The HC had overturned the cheque received the cheque for the discharge, in decision of the Trial Court and found the appellant whole or in part, of any debt or other liability. To guilty. The primary burden to prove that the cheques rebut this presumption, facts must be adduced were issued by the appellant in lieu of the material by the accused which on a preponderance of supplied was discharged by the respondent. It probability (not beyond reasonable doubt as in the ruled that “The accused to discharge her burden case of criminal offenses), must then be proved.” to rebut in defense as required under Section 139 of the NI Act which was not done in the present The Top Court concluded that the respondent case.” proved that the appellant placed the order for purchasing non-woven fabric, the said goods were An appeal was filed before the SC, and it stated delivered. The appellant issues the cheques to that the burden of proof was on the accused as discharge her liability which was dishonored on the per Section 139 of the NI Act, the standard of proof ground of “insufficient funds”. was of “preponderance of probabilities”. It added that no evidence was led by the appellant The SC noted that there is a mandate of presumption to rebut the presumption that the cheques were of consideration in terms of the provisions of issued for consideration. The SC upheld the the NI Act. It added that the onus shifts to the conviction of the appellant and dismissed the accused on proof of issuance of cheque to rebut appeal.

Bombay High Court on Receiving Uncontested Petition pending for 31 years: ‘Tragic and terrible commentary on justice delivery system’

The Bombay High Court (HC) heard the matter of listing of cases, a 31-year-old uncontested petition Mahomed Chinoy (Petitioner) v. Rasubai Chinoy was filed in 1990 came up for hearing before the (Respondent - Deceased) on 10 March 2021 wherein HC. an objection was raised by the registry on a question pertaining to the requirement of attestation of Will The Judge record in his order that it was ‘truly under Mahomedan Personal Law. inexplicable’, he added, “The first oddity about the matter, and it is truly inexplicable, apart from being The single-judge of the HC Justice Gautam Patel a tragic and terrible commentary on our justice held, “The question of law is thus decided. The delivery system, is that, though uncontested, the objection of the Registry is answered. The Will, matter has been pending in this Court for the last being of a Cutchi Memon, governed by Mahomedan 31 years.” law, does not require attestation.” He further said that “There is indeed a question He was surprised at the instance of inexplicable of law involved. But the answer to it is neither ERA 12 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 13 LE Top Stories

complex nor new. Indeed, that answer is even older than the Petition: the solution is from 1905. It is an answer that the Petition could have received very much earlier. Their wait ends today.”

In the instant matter, the issue was - Whether a Will required attestation and whether the Will was required in a written format under the Mahomedan law. The Will was made in 1980 and Rasubai Chinoy died in 1989 without appointing executors for her Will.

In the said Will, it was mentioned that the inheritance along with income received by the deceased from her paternal aunt was to be returned Justice Gautam Patel to her aunts’ charitable trust after her death. None of the petitioners claimed any part of it. relied upon by Justice Patel and he concluded that In 1990, the petition was filed and the matter Section 63 of the Act deals with attestation of a came up for hearing before the Court wherein an Will by at least two witnesses, however, the said objection was raised by the registry regarding a provision is not applicable to Wills made under the question of law that Will did not have attestation. Mahomedan law. Justice Patel considered the precedent of 1905 of the HC from the year and disposed of the Justice Patel further relied on the judgment in the petition. He framed the following issues for further matter of In re Aba Satar Haji Aboobuker of 1905 consideration of the Court - wherein the Court held that since the Succession Act did not apply to the Mahomedan, and the - Whether a portion of the Act dealing with Probate and Administration Act did not set a testamentary succession under the Indian requirement for attestation in Mahomedan Wills, Succession Act 1925 applies to a Sunni Hanaf there was nothing which makes it compulsory for Mahomedan? Mahomedans to attest their Wills.

- Whether under the law governing Sunni Hanaf Justice Patel granted probate considering the Mahomedans, there is any requirement of the facts of the instant matter similar to the aforesaid attestation of a Will? case. He further remarked, “At this stage perhaps I should enter only one solitary comment: nothing Three provisions of the Indian Succession Act were changes even after 150 years.”

Supreme Court: High Court shouldn’t Exercise ITS Writ Jurisdiction in Arbitrable Matters Unless Issue Involves Public Interest

The Supreme Court (SC) on 26 March 2021, in public interest. the case titled Rapid Metro Rail Gurgaon Limited (Appellant) v. Haryana Mass Rapid Transport The SC bench consisting of Justices DY Corporation & Ors. (Respondents) stated that a Chandrachud, MR Shah, and Sanjiv Khanna High Court (HC) in its jurisdiction under Article stated that “The High Court’s exercise of its 226 of the Constitution should restrain from writ jurisdiction under Article 226 in the present entertaining a dispute that is arbitrable, unless case was justified since non-interference, which the fundamental issue involves the question of would have inevitably led to the disruption ERA 14 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 15 Top Stories

of rapid metro lines for Gurgaon, would have had disastrous consequences for the general public.”

It added that “As a measure of abundant caution, we clarify that ordinarily, the High Court in its jurisdiction under Article 226 would decline to entertain a dispute which is arbitrable.”

The SC made the aforesaid observations while considering appeals filed by the respondents against the order passed by the Punjab and Haryana High Court (HC) in writ petitions filed by Haryana Mass Rapid Transport Corporation (challenging termination notices issued by RMGL).

The HC entertained the writ petition although there was an arbitration clause. An appeal was filed before the Apex Court against the order of the HC and it noted that “The High Court in its jurisdiction under Article 226 would decline to entertain a dispute which is arbitrable. Moreover, dated 20 September 2019, as modified on 4 remedies are available under the Arbitration October 2019 and 15 October 2019; and Conciliation Act, 1996 for seeking interim directions either under Section 9 before the (iv) In terms of clause (v) of the order of the Court vested with jurisdiction or under Section High Court dated 20 September 2019, in 17 before the Arbitral Tribunal itself.” the event of any dispute arising about the correctness of the CAG report, in regard to The Top Court disposed of the appeal and issued the determination of the debt due, any of the the following directions - parties would be at liberty to raise a dispute (i) “HSVP shall within three months from the in the course of arbitral proceedings; date of the present judgment deposit into the Escrow Account 80 percent of the debt (v) Upon compliance with the directions due as determined in the reports of the contained in (i) above, RMGL and RMGSL shall auditors dated 23 June 2020, in the case of execute and handover to HSVP all documents RMGL and RMGSL respectively; which are required for effectuating the transfer of operations, maintenance, and (ii) The deposit into the Escrow Account shall assets to HSVP or their nominees to fulfill the continue to be maintained in Escrow, subject obligation of the concessionaires in Article to any order that may be passed by NCLAT or 25 of the Concession Agreement dated 9 any competent statutory authority, and shall December 2009 and clause (vi) contained not be appropriated by the Escrow Bank in the order of the High Court dated 20 without specific permission; September 2019, as modified on 4 October 2019 and 15 October 2019; and (iii) RMGL and RMGSL on the one hand, and HSVP on the other, are at liberty to pursue (vi) The writ petitions filed before the High Court their rights and remedies in pursuance of the by the respondents shall stand disposed arbitration clause contained in the Concession of.” Agreements on all matters falling within the ambit of the arbitration agreement, including The SC while disposing of the matter based the validity of the notices of termination, any on aforesaid directions also clarified that past or future inter se claims and liabilities its’ judgment shall not affect any ongoing as envisaged in the order of the High Court investigation or criminal proceedings regarding the IL&FS group of companies. ERA 14 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 15 LE Top Stories

Supreme Court: Even if Principal Borrower is Not ‘Corporate Person’ Insolvency proceedings Can be Initiated Against Corporate Guarantor

A notice was issued by the financial creditor to the principal borrower, and the corporate debtor, for demanding the dues. An application u/s 19 of the Recovery of Debts Due to Banks and Financial Institutions Act (Act) was filed by the financial creditor against the principal borrower before the Debt Recovery Tribunal (DRT).

While the proceedings were pending before the Tribunal the principal borrower gave assurances Justices AM Khanwilkar, BR Gavai, to the financial creditor to pay the outstanding and Krishna Murari amount, however, he failed. The financial creditor sent another notice to the corporate debtor on 3 December 2018 for seeking payment under Section 4(1) of the IBC. The Supreme Court (SC) on 26 March 2021, in the case titled Laxmi Pat Surana (Appellant) v. Union A reply was received on behalf of the corporate Bank of India & Anr. (Respondents) ruled that even debtor wherein it was mentioned that it was not if the loan was offered to a proprietary firm that the principal borrower nor owed any financial debt was not a corporate person, action u/s 7 Insolvency to the financial creditor and had not committed & Bankruptcy Code, 2016 (IBC) can lie against the any default in repayment of the stated outstanding corporate guarantor. amount and hence would not be held liable.

The SC bench comprising Justices AM Khanwilkar, Then the financial creditor applied u/s 7 of the IBC BR Gavai, and Krishna Murari was hearing an and initiated CIRP against the corporate debtor. appeal filed against a judgment of the National The National Company Law Tribunal (NCLT) said Company Law Appellate Tribunal (NCLAT). It that the corporate debtor is liable to be proceeded clarified that the Corporate Insolvency Resolution with under u/s 7 of the IBC and the Appellate Process (CIRP) u/s 7 of the IBC can be initiated by Tribunal upheld the decision of the NCLT. Hence, the financial creditor (Bank) against a corporate an appeal was filed before the Apex Court. person concerning guarantee offered regarding a loan account of the principal borrower, who had Issues before the SC committed a default, even if the principal borrower is not a ‘corporate person’. - Whether an action u/s 7 of the IBC be initiated by the financial creditor against the corporate The factual background of the case is that the person regarding guarantee offered in case of respondent sanctioned two loans to M/s. Mahaveer a loan amount of the principal borrower who Construction (Principal Borrower) i.e. a proprietary has defaulted and is not a corporate person firm of the appellant through two loan agreements according to the meaning provided under the made in years 2007 and 2008. IBC?

A guarantee was offered by M/s. Surana Metals - Whether an application u/s 7 of the IBC be filed Limited and the appellant were also a Promoter/ after 3 years from the date of declaration of a Director of the said company. On 30 January 2010, loan account as NPA be barred by limitation? the loan accounts were declared non-performing assets. The Top Court while dealing with the first issue ERA 16 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 17 Top Stories

clarified that in law, the status of the guarantor, The Top Court emphasized that the obligation of who is a corporate person, metamorphoses into a the guarantor is coextensive as that of the principal corporate debtor, the moment principal borrower, borrower as provisioned u/s 128 of the Contract regardless of not being a corporate person, Act. In case of default, the status of the guarantor commits default in payment of a debt which had transforms into a debtor or a corporate debtor if become due and payable. it happens to be a corporate person, within the meaning of Section 3(8) of the IBC. The Court added that in case of a default by the principal borrower, it is the liability of the company The Apex Court while dealing with the second issue (corporate person) being the guarantor, and based rejected the argument of the appellant regarding on it the right of the financial creditor triggers to the maintainability of the application filed by the proceed against the corporate person being the financial creditor u/s 7 of the IBC on the ground of corporate debtor. being barred by limitation. It clarified that a fresh period of limitation is required to be computed The SC bench examined the definitions of terms from the date of acknowledgment of the debt by including “financial creditor” “financial debt”, the principal borrower from time to time. “debt”, “claim” and “default” as defined under the IBC. After examining the said definitions the The Court concluded, “The financial creditors Court held that a right or cause of action would has not only the right to recover the outstanding accrue to the financial creditor to proceed against dues by filing a suit but also has a right to initiate the principal borrower, and the guarantor in equal a resolution process against the corporate person measure if default occurred in repayment of the whose liability is coextensive with that of the amount of debt acting jointly and severally. principal borrower and more so when it activates from the written acknowledgment of liability and The SC draws support from Section 3(37) of the failure of both to discharge that liability.” IBC and stated that it must follow that the lender would be a financial creditor within the meaning While dismissing the appeal the Court said that of the IBC. It further stated that even though “There is no reason to limit the width of Section the principal is not a corporate person, but if a 7 of the Code despite law permitting initiation of corporate person extends a guarantee for the loan CIRP against the corporate debtor, if and when the transaction concerning a principal borrower not default is committed by the principal borrower. being a corporate person, it would still be covered For, the liability and obligation of the guarantor within the meaning of the expression “corporate to pay the outstanding dues would get triggered debtor” in Section 3(8) of the IBC. coextensively.”

Supreme Court: NCLT has limited Jurisdiction in the approval of Resolution Plan submitted by Committee of Creditor

The Supreme Court (SC) in the case titled Jaypee jurisdiction regarding approval of the RP by the Kensington Boulevard Apartments Welfare CoC. It added that the concept is well-explained Association & Ors. (Appellants) v. NBCC (India) u/s 30(2) (Examination of Resolution Plan) and 31 Limited & Ors. (Respondents) held that if the (Approval of Resolution Plan) of the Insolvency National Company Law Tribunal (NCLT) i.e. the and Bankruptcy Code (IBC). Adjudicating Authority finds any inadequacy based on specified parameters in the resolution The Top Court passed the said judgment on plan (RP) approved by the Committee of Creditors receiving a batch of appeals and petitions in (CoC) then the NCLT may ask for re-submission. the case relating to the insolvency of Jaypee Infratech. The Apex Court clarified that in the The SC bench comprising Justices AM Khanwilkar, adjudicatory process regarding the RP there is Dinesh Maheshwari, and Sanjiv Khanna ruled no scope for the interference of the adjudicating that the adjudicating authority has limited authority with the commercial aspects of the ERA 16 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 17 LE Top Stories

major institutional financial creditors, who were the members of the CoC.

Various appeals were filed against the interim order of the Appellate Tribunal before the Apex Court.

Issue before the SC

Justices Dinesh Maheshwari, AM Khanwilkar, Whether the Adjudicating Authority can modify and Sanjiv Khanna or substitute the commercial terms and aspects of the Resolution Plan approved by the CoC? Are there any limitations on the adjudicating authority regarding the same?

decision of the CoC that also includes the The SC put reliance on various precedents substitution of any commercial term. including - K. Sashidhar v. Indian Overseas Bank and Ors.: (2019) 12 SCC 150, Committee of The factual matrix of the case is that a dispute Creditors of Essar Steel India Limited v. Satish arose regarding the RP in the corporate insolvency Kumar Gupta and Ors.: (2020) 8 SCC 531, and resolution process (CIRP) concerning the Maharashtra Seamless Limited v. Padmanabhan corporate debtor, Jaypee Infratech Limited (JIL) Venkatesh and Ors.: (2020) 11 SCC 467 and stated that has impacted several individuals and entities that the jurisdiction of the Appellate Authority is which also included the buyers of flats/apartments circumscribed by the limited grounds of appeal in its real estate development projects. provided in Section 61 of the IBC that deals with ‘Appeals and Appellate Authority’. The RP was submitted by the resolution applicant, NBCC (India) Limited and it was duly approved by The Court further clarified that in the the CoC by a substantial majority of 97.36% of the adjudicatory process regarding an RP under the voting share of the financial creditors. IBC, the adjudicating authority has no scope for interference with the commercial aspects of the The adjudicating authority approved the RP decision of the CoC. however it did certain modifications to the same. The NCLT also gave certain directions The Top Court while dealing with the said issue while accepting some of the objections of the ruled that “If within its limited jurisdiction, dissenting financial creditor bank and the land the Adjudicating Authority (NCLT) finds any providing agency but while rejecting some other, shortcoming in the resolution plan vis-à-vis including those of the holding company of JIL the specified parameters, it would only send and while leaving a few propositions open for the resolution plan back to the Committee of adjudication in the appropriate forum. Creditors, for re-submission after satisfying the parameters delineated by the Code and exposited An appeal was filed by the resolution applicant by this Court.” NBCC against the order of the adjudicating authority before the National Company Law The SC has set aside the order of the adjudicating Appellate Tribunal, New Delhi (NCLAT). The authority wherein the NCLT had made certain Appellate Authority issued notice to the alterations to the RP (approved by the CoC). The unrepresented parties and it passed an interim NCLT further directed that the Interim Resolution order wherein it approved the resolution plan Profession (IRP) should complete the insolvency that should be implemented subject to the proceedings of Jaypee within 45 days. outcome of the appeal. The Apex Court stated that “The matter regarding The Appellate Tribunal also directed that the approval of the resolution plan stands remitted RP may constitute an ‘Interim Monitoring to the Committee of Creditors of JIL and the time Committee’ that shall comprise NBCC and three for completion of the process relating to CIRP ERA 18 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 19 Top Stories

of JIL is extended by another period of 45 days of the corporate debtor, no housing project from the date of this judgment.” of the corporate debtor could be segregated merely for the reason that same has been It further stated that it shall be open to the IRP completed or is nearing completion. for inviting fresh RP only from Suraksha Realty and NBCC, respectively by giving them time to o Jaiprakash Associates Limited (JAL, the submit it within 2 weeks from the date of the holding company of Jaypee) deposited the judgment. amount of R750 crore under the orders passed by this Court in the case titled Chitra Sharma The Court emphasized that IRP would be and Ors. v. Union of India and Ors. (2018) 18 restrained to entertain any ‘expression of SCC 575, and accrued interest thereupon, is interest’ by any other person. the property of JAL and stipulation in the resolution plan concerning its usage by JIL or The SC ruled the following in its judgment- the resolution applicant cannot be approved. The part order of the adjudicating authority is o The Adjudicating Authority has not defaulted set aside wherein it placed this amount in the in disapproving the proposed treatment of asset pool of JIL. dissenting financial creditor in the RP. The SC issued a slew of directions for ensuring o The Adjudicating Authority erred in complete justice in the cause while exercising its substituting the terms of the RP and did powers under Article 142 of the Constitution of India- not send the RP back to the CoC for further consideration rather it suggested the same - The Court remits the matter regarding without a reconsideration of CoC. approval of RP to the CoC of JIL and it extends the time by another 45 days from the date of o The Adjudicating Authority erred by giving the judgment for the completion process. directions to the resolution applicant for making provision for clearance of dues of - Provided for a further extended period for the unclaimed fixed deposit holders. conclusion of CIRP; for constitution of CoC afresh; and permitting the IRP to invite fresh o The NCLT erred in concluding that the RP did expressions of interest for the submission of not aptly deal with the interests of minority resolution plans. shareholders. The grievance of the minority shareholders is not a legal grievance and - The Court directed that the amount of R 750 hence their objections are rejected. crore, ‘which has been deposited in this Court by JAL/JIL shall together with the interest o Regarding the issue of objections raised by YES accrued thereon’ be transferred to NCLT, Bank Limited and about JHL, the subsidiary which would abide by the directions as may of the corporate debtor JIL, are left 361 for be issued by NCLT. resolution by the parties concerned, a viable solution will be given. - After receiving the RP, the IRP shall take all further steps in the manner that the processes o The homebuyers as a class having assented of voting by the CoC and his submission of to the resolution plan of NBCC, any individual the report to the NCLT are accomplished in homebuyer or any association of homebuyers all respects within the extended period of 45 cannot maintain a challenge to the resolution days from the date of this judgment. plan and cannot be treated as a dissenting financial creditor or an aggrieved person; the - The proceedings relating to CIRP of JIL were question of violation of the provisions of the initiated by the Allahabad Bench of the NCLT RERA does not arise. but, later on, the same were transferred to its Principal Bench at New Delhi. Therefore, the The RP in hand is not violative of the mandatory proceedings contemplated by this judgment requirements of the CIRP Regulations, when shall be taken up by the Principal Bench of the RP deal with all the assets and liabilities the NCLT at New Delhi. ERA 18 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 19 LE Nation @ Glance

HIGH COURT & TRIBUNAL NEWS AROUND THE NATION

National Company Law Appellate Tribunal NCLAT: Payment Received in one CIRP Lender’s Claim Maintainable Against Principal Borrower & Corporate Guarantor

The National Company Law Appellate Tribunal (NCLAT) on 8 March 2021 held in the matter of SBI (Appellant) v. Animesh Mukhopadhyay (Respondent) that when two Corporate Insolvency Resolution Process (CIRP) is maintainable, claim in both, subject to adjustments on receipts, would also be maintainable.

The judgment was passed by a two-member bench of Justice AIS Cheema, Member (Judicial), and Dr. Alok Srivastava, Member (Technical). It held, “Till payment is received in one CIRP, a claim can be maintained in both CIRPs for same amount and representation in Committee of Creditors (CoC) in both CIRPs to the extent of amount due will be justified. This is the reason why Section The National Company Law Tribunal (NCLT) received 60(3) provides for the transfer of proceeding to an application from the United Bank of India and Adjudicating Authority where already there is a the Tribunal initiated CIRP against the Principal pending proceeding.” Borrower. The Appellant Bank filed its claim before the Resolution Professional and CIRP is pending The Appellate Tribunal added, “There is no and the Resolution Plan is being evaluated. question of looking into Judgments when Section 60 of Insolvency & Bankruptcy Code (Code) is clear The Appellant contended that it might not get and makes the two CIRPs maintainable in such any substantial sum in the CIRP of the Principal matters. If they are maintainable, claim in both Borrower even if any resolution is found. In the (subject to adjustments on receipts) would also be meantime, CIRP was initiated against Corporate maintainable.” Guarantor on receiving an application by the United Bank of India. The factual background of the case is that the Appellant had granted credit facility in the nature The Appellant bank filed its claim before the of Term Loan to Purple Advertising Services Pvt. Resolution Professional of the Corporate Guarantor. Ltd. (Principal Borrower). But the Resolution Professional discussed the claim with the CoC and opined that the claim was Zenith Finesee India Pvt. Ltd. (Respondent No not tenable as per the law. 1/Corporate Guarantor) was the guarantor for securing the dues of the Principal Borrower. The Appellant approached the NCLT for acceptance Subsequently, the Principal Borrower and the of its claim and its inclusion in CoC. The NCLT Corporate Guarantor became the Non-Performing rejected the pleading of the appellant and held Assets (NPAs). As their liability was co-extensive that its claim against the Corporate Guarantor was they were jointly liable to pay the outstanding dues not admissible as it had filed a claim in the Principal to the Appellant bank. Borrower’s CIRP. ERA 20 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 21 National

An appeal was filed before the Appellate Tribunal State Bank of India v. Athena Energy Ventures and it opined that the NCLT in its order had failed Pvt. Ltd. (2020) SCC online NCLAT 774, wherein to discuss the provisions of the Code. Considering it had referred to Section 60 of the Code and the Section 60 of the Code the NCLAT held that amendment made to sub-Section 2.” when two CIRPs are maintainable, claim in both (subject to adjustments on receipts) would also be The NCLAT allowed the appeal and directed the maintainable. Resolution Professional of the Corporate Guarantor to consider the claim of the Appellant and to The NCLAT added, “The Adjudicating Authority appropriately deal with the Appellant as Financial did not consider the judgment in the matter of Creditor in the CoC.

NCLAT: Financial Creditor can simultaneously initiate CIRP against Principal Borrower and Corporate Guarantor

(Corporate Guarantor) as their liability being coextensive, they became liable to pay outstanding dues for an amount of R 29 crore.

Later, the United Bank of India filed an application with the National Company Law Appellate Tribunal (NCLT) for initiation of CIRP against the Principal Borrower. The SBI has filed its claim before the Resolution Professional (RP) according to the Appellant Bank, it may not get any substantial sum (approx. less than 10% of the dues) in the CIRP of the Principal Borrower even if any resolution is found.

However, after discussing the claim with the CoC, the RP intimated the Appellant bank that the claim In this case, the National Company Law Appellate appears to be “not tenable in the eye of law” and Tribunal (NCLAT) posed with the question of law that the “onus on the admissibility” of the claim is as to whether for the debt due, is it admissible for with the CoC. Aggrieved, the Bank approached the the Financial Creditor to file separate claims:- (i) In NCLT for accepting its claim and for reconstitution the CIRP of the Corporate Guarantor; and (ii) In the of the CoC by including the Appellant as a member CIRP of the Principal Borrower. of CoC.

The Tribunal answered in the affirmative and However, the Adjudicating Authority held that the ruled that a creditor can file two separate claims claim of the Appellant Bank against the Corporate in the Corporate Insolvency Resolution Process Guarantor was not admissible as Appellant had (“CIRP”) of both the Principal Borrower and filed claim in the CIRP which was filed against Guarantor/Surety at the same time under Section the Principal Borrower also. The Adjudicating 60 of Insolvency and Bankruptcy Code, 2016 Authority dismissed the case without discussing (IBC). the provisions as appearing in Section 60 of the IBC which have been amended. As to the facts of the case, the State Bank of India (Appellant) had granted Term Loan to Purple On appeal, the NCLAT held that till the payment is Advertising Services Pvt. Ltd. (Principal Borrower) received in one CIRP, claim can be maintained in which subsequently became Non-Performing Asset both CIRPs, for same amount and representation (NPA) including the present Respondent No.1 in CoC in both CIRPs to the extent of amount due ERA 20 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 21 LE Nation @ Glance

will be justified. The Tribunal also held that Section The Tribunal relied on its earlier judgment in 60(3) of the IBC provides for transfer of proceeding “Edelweiss Asset Reconstruction Company Ltd. V. to Adjudicating Authority where already there is a Sachet Infrastructure Ltd.” wherein it was held that pending proceeding. the Financial Creditor can proceed against the Principal Borrower as well as Corporate Guarantor at the same The Tribunal stated, “There is no question of time, either in CIRPs or file claims in both CIRPs. looking into Judgments when Section 60 of IBC is clear and makes the two CIRPs maintainable The Tribunal directed the Respondent to in such matters. If they are maintainable, claim consider the claim of the Appellant Borrower and in both (subject to adjustments on receipts) appropriately deal with the Appellant as Financial would also be maintainable.” Creditor in the CoC.

BOMBAY High Court

Bombay High Court: Non-payment of ‘Transit Rent’ for Months Signals ‘Social Injustice’

Justice Patel further observed and stated that “Development in a dryly-worded contract, does not tell us what has happened that this community has been literally splintered and torn apart. The contact that has persisted through generations has almost certainly been lost.”

The Court remarked, “Receiving monthly rent is not a SOP, not a matter of ‘convenience’. It is a matter of survival.”

The factual matrix of the case is that a petition was HC Justice Gautam Patel filed by Rajawadi Arunodaya Co-op Housing Society Ltd. from Ghatkopar, Mumbai under Section 9 of The Bombay High Court (HC) in the case titled the Arbitration and Conciliation Act for interim Rajawadi Arunodaya Co-op Hsg Soc Ltd. (Petitioner) reliefs. v. Value Projects Pvt. Ltd. (Respondent) ruled that the non-payment of dues, the delays in project The redevelopment project was delayed by six- completion, and not paying transit rent for months years in completion of project and non-payment of together speaks to an inherent, and constantly rent by the developer. The original building with 20 growing, social injustice. residential and seven commercial units was built before 1985 on 1000 sq meters of land. The single-judge of the Bombay HC Justice Gautam Patel has noted that in matters of redevelopment, On 5 April 2013, the Society had entered into a which are in the realm of private law, there is no deed of redevelopment and handed over vacant such thing as ‘substantial compliance’. The Court possession of the flats in 2015. The developer directed the builder to hand over the possession committed severe default in rent including the of the land, property, and the papers to the society creation of third-party rights that compelled them possession for enabling it to undertake the project to terminate the contract in 2019 and they had to or appoint a new developer. approach the HC. ERA 22 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 23 National

The HC ruled that the balance of convenience possession with an occupation certificate; would lie in society’s favor stating the reason that - Payment of statutory and corporation dues a development project is a money-making source including property tax; and for the developer but it is a matter of survival for a - A demonstration of the financial means to bring society. It added that the hardship to the members the project to completion. is real and immediate; the so-called hardship to the Developers is notional. The HC put reliance on the judgment of the case titled - Gopi Gorwani v. Ideal Cooperative Housing Justice Patel further remarked that “Receiving Society Ltd & Ors, 2013 SCC OnLine Bom 1967, monthly rent is not a SOP, not a matter of wherein it was held that loss of faith and confidence ‘convenience’. It is a matter of survival. Therefore, on account of contractual violations and breaches the non-payment of dues, the delays in project by a developer is sufficient grounds to find for the completion, and not paying transit rent for months society and against the developer. together speaks to an inherent, and constantly growing, social injustice.” The Court while hearing a plea regarding redevelopment row over a six-year delay in He further pointed out that there are different completion of a project in Mumbai stated, “There categories in re-development cases. It emphasized is a very real human tragedy unfolding in case after a situation where a developer leaves the job mid- case and it is tearing apart the social fabric of this way and the society members approach the Court city.” for termination; in that case, the developer must bring forward a proposal covering- Justice Patel concluded, “The non-payment of dues, the delays in project completion, and not - Accumulated arrears of transit rent and other paying transit rent for months together speaks dues; to an inherent, and constantly growing social - The obligation to pay ongoing transit rent until injustice. It should not be allowed to continue.”

Kerala High Court Kerala High Court: No Need to Disclose Nature of Transaction for Issuance of Cheque in Demand Notice u/s 138 OF NI Act

Act (NI Act) need not disclose the nature of the transaction leading to the issuance of the cheque. The HC division bench consisting of Justices K Vinod Chandran and MR Anitha held that the NI Act did not mandate a format for a demand notice. It clarified while answering the reference whether a demand notice without full disclosure of the details of the transaction would be rendered invalid.

It ruled, “The Court cannot legislate by prescribing a particular form and cannot require that the nature of the transaction, leading to the issuance of cheque, be disclosed in the notice when the statute does not provide for it.” The Kerala High Court (HC) on 17 March 2021, in the case titled K Basheer (Appellant) v. C Usman Koya In this case, the question was referred to the HC & Ors. (Respondents) held that a demand notice bench for consideration after a single judge of under Section 138 of the Negotiable Instruments the HC heard an appeal against an order of the ERA 22 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 23 LE Nation @ Glance

Additional Sessions Court that found a divergence It also seeks to avoid the filing of a civil suit and in the HC’s treatment of such cases. The Single a further execution for realization of the decretal Judge had heard an appeal wherein the Additional amount.” Sessions acquitted the respondent (accused). The respondent was charged for a cheque bouncing It added, “This is the reason why Proviso (b) to case. Sec.138 provides that once the cheque is returned on presentation for reason of insufficiency of The Single Judge had ruled that a person accused in a funds or for exceeding the arrangement, the payee complaint under Section 142 of the NI Act is entitled or the holder in due course may make a demand to know the material particulars of the accusation for payment of money by giving a notice in writing leveled before he was tried. It was further stated to the drawer of the cheque, but within 30 days that a suppression of these particulars would entail of the receipt of information of dishonor from the acquittal, without anything more. Bank. Timeframe prescribed under the proviso further is an indication to ensure the bonafides of In the case titled Surendra Das v. State of Kerala, the drawee.” a Single Judge of the HC opined differently and stated that an error or an omission to state the The bench remarked that “The offense u/s.138 of nature of debt or liability in a demand notice does the Act is an offense which would be attracted on not render it invalid. He further stated that the Act the ingredients above referred being satisfied. The did not prescribe a form in which a demand notice statute also provides a presumption in favor of the was to be issued under Section 138(b). holder which cannot be rendered otiose.”

The division bench in the instant matter stated The HC concluded that the NI Act did not prescribe that while drawing inference from the legislative a form for a demand notice and it referred to the scheme and intent, a complaint under Section 138 judgment of the case Central Bank of India & Anr. required certain factual allegations that included v. M/s. Saxons Farms & Ors., wherein it was held that the cheque was drawn in a valid account by that no form of notice is prescribed under Clause the holder, that its presentation was within six (b) of the proviso to Section 138 of the Act. months or validity period; whichever is earlier, that the cheque was dishonored, that the demand was The bench held that the NI Act only required a made by the payee or holder in due course within payee or holder in due course to notify the drawer 30 days of dishonor. of the cheque of its dishonor. It stated that the legislation created a presumption in favor of the It further clarified that the only additional fact that payee once the ingredients of the dishonor were had to be proved was the fact that the drawer did disclosed. This presumption could not be rendered not pay the sum demanded within 15 days from the otiose, the Court emphasized. date of receipt of the demand. The HC while dismissing the appeal concluded that The bench summarized the statutory provision there was no business transaction between the by stating that “The legislative intention is to accused and the complainant as alleged. It further overcome the cumbersome procedure of filing said that a failure to send a reply to a demand police report or complaint and subsequent enquiry notice cannot be used to demolish the case of the or investigation etc., in matters of cheque dishonor. defense. ERA 24 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 25 National

Calcutta High Court No indication of malice if duplicate share certificate not issued by Company: Calcutta High Court

The petitioner-company sought quashing of FIR primarily on the ground that dispute, is squarely governed by the Companies Act, 2013. It referred to Section 46 of the Companies Act that deals with the issuance of duplicate certificate of shares.

It was submitted that the dispute pertains to non- issuance of duplicate share certificates which cannot be termed as an offense under Sections 420 or 406 of the IPC.

The HC noted that the annual return of the Petitioner-company for financial year 2016-2017 indicates that 27,000 shares were transferred by The Calcutta High Court (HC) in the case titled M/s. the respondent in favor of the petitioner. Avion Builders Pvt. Ltd. & Ors. (Petitioners) v. State of West Bengal & Anr. (Respondents) has quashed Regarding the contention of misplacement of a criminal case of Cheating instituted against a the share certificate the bench stated that the company and its Directors over non-issuance of allegations made against the petitioners are bereft duplicate share certificates to the one claiming to of any intention of cheating or misappropriation at be a shareholder in the company. the inception of the transaction. It further noted that no prima facie case of entrustment with or dominion Justice Suvra Ghosh held that if the company does over property or dishonest misappropriation of not issue mere non-issuance of duplicate share property or even ingredient of cheating has found certificates on misplacement being misplaced by place within the four corners of the complaint. an alleged shareholder, it does not indicate malice on part of the company from the inception of the The Court added that “No prima facie case of transaction. entrustment with or dominion over property or dishonest misappropriation of property or even The HC noted that “The equity shares were ingredient of cheating has found place within the admittedly issued against consideration and loss or four corners of the complaint.” misplacement of such shares by the opposite party is a subsequent event which was not contemplated The Court concluded that “If the duplicate share by the parties at the time of issuance of the certificates were deliberately not issued in favor of shares.” the opposite party with criminal intent, such act was done at a subsequent stage only after the original The factual background of the case is that the share certificates were misplaced and no such intent petition was filed for quashing of proceedings is found at the inception of the transaction.” of a complaint registered against the petitioner company and its Directors under Sections 406, The HC held, “No prima facie case of criminal intent 420, and 120B of the Indian Penal Code (IPC) that at the inception having been made out against was pending before the Metropolitan Magistrate. the petitioners in the complaint, I am inclined to The respondent alleged that it held 27,000 equity hold that no criminal offense, far less an offense shares of the company and it refused to issue under Section 420/406 of the IPC is disclosed in the duplicate share certificates despite intimation that complaint and allowing the proceedings to continue the original share certificates were misplaced. shall amount to abuse of the process of law.” ERA 24 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 25 LE Nation @ Glance

Calcutta High Court: Immoveable Property Can be used as Security for Stay of Decree under CPC & Arbitration Act

The petitioner had offered land that has a market value of R65,00,000 against an award worth R67,04,681. It was mentioned in the affidavit that the said land is free from all encumbrances. The petitioner stated in the affidavit that the land has not been let out and is in exclusive possession.

Taking a sympathetic view, the Court said, “This Court must respond to such submission by taking into account the afflicted state of the economy which has affected millions in the country in the aftermath of the pandemic. This Court would have taken a different view had the petitioner requested for a total go-by of the security requirement and The Calcutta High Court (HC) on 19 March 2021, held asked for a stay of the award without offering in the case titled Nitu Shaw (Petitioner) v. Bharat security in any form.” Hitech (Cement) Pvt. Ltd. (Respondent) that there is no bar in the Code of Civil Procedure (CPC) or The HC observed that Section 36(3) of the under the Arbitration & Conciliation Act, 1996 Arbitration Act provides for the procedure for the (Arbitration Act) in accepting immovable property stay of an Award. It stated that the said provision as security for a stay of the decree. does not mention the term ‘security’ and only provides that the Court may impose suitable terms The single judge of the Calcutta HC Justice for the stay of the award. Moushumi Bhattacharya held that cash security is not sine qua non under the statutes. The Court It further clarified that the provision states that made the said observations while emphasizing on the filing of an application for stay of the Court the intention behind seeking security is simply to may, “subject to such conditions as it may deem furnish an effective cushion for the decree. fit” grant stay of operation of such award for reasons to be recorded in writing. The factual matrix of the case is that the dispute between the parties relates to the supply of The Court stated that Section 36(3) of the cement by the respondent to the petitioner where Arbitration Act imparts discretion to the Court for the petitioner was appointed as the clearing and deciding the conditions which may be imposed and forwarding agent by an understanding arrived at the only stated requirement is that the Court must between the parties. indicate its reasons in writing for granting an order of stay of the award in question. The respondent alleged that it supplied the material to the petitioner for which the respondent was to It stated that the intent of the provision regarding get a certain sum of money. The petitioner disputed the stay of a money decree is that the applicant it and that any amount was outstanding from the who seeks stay of a decree must furnish an effective petitioner to the respondent. remedy for the decree-holder to rely on in case the decree fails. The petitioner had moved an application under Section 36 of the Arbitration Act for the stay of In other words, the purpose is to secure the decree- an arbitral award. He contended that it did not holder in a manner that would be conducive to the have sufficient liquidity or financial means to offer decree-holder enjoying the fruits of the decree in as cash security or by way of bank guarantee and the long run. therefore, the title deed of a specified land be deposited with the Registrar. The HC noted that the provisions of the CPC ERA 26 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 27 National

regarding the stay of a money decree do not execution of a decree until the pending suit has prescribe that such stay would only be in monetary been decided. terms. It stated that- Justice Bhattacharya put reliance on the case titled - CPC Order XLI Rule 1(3) deals with the cases of Sihor Nagar Palika Bureau v. Bhabhlubhai Virabhai appeal against a decree for payment of money, & Co., (2005) 4 SCC 1, wherein the Court held that the Appellate Court may allow the appellant to security in the form of the immovable property could deposit the amount disputed in the appeal or be accepted to the satisfaction of the Trial Court. furnish such security in respect thereof as the Court may think fit; Based on the above observations, the HC ruled that “On a conjoint reading of the above provisions it is - CPC Order XXI Rule 26(3) puts a mandate before clear that the intention of the framers of the law, making an order of stay of execution or for which is relevant for consideration in the present restitution of property or the discharge of the case, was to refrain from a strict requirement that judgment-debtor. The Court shall require such security to be furnished for a stay of a decree security from, or impose such conditions upon, would only be in monetary terms.” the judgment-debtor as it thinks fit; The Court directed that “There shall be an order of - Order XXI Rule 26(3) of the CPC mandates that stay of the arbitral award dated 4th March 2019 on before making an order of stay of execution or the petitioner depositing the title deed of the land for restitution of property or the discharge of in question as fully described in the supplementary the judgment-debtor, the Court shall require affidavit within 22 March 2021 with the Registrar, such security from, or impose such conditions Original Side of this Court.” upon, the judgment-debtor as it thinks fit; It added, “This order shall automatically stand - Order XXI Rule 29 of CPC provides that the vacated in the event of default on the part of the Court may on such terms, as it thinks fit, stay petitioner in respect of the aforesaid direction.” $ 5 ( /(XXX*MFHBMFSBPOMJO$FDPN/

&KDQJLQJ ǡ Ƭ 1:25/'HZ

ǡ Ƭ , $VD &RPPXQLW\ ǡ ǡƬ 'PS.PSF*OGPSNBUJPO 1MFBTF$POUBDU ]&NBJMJOGP!MFHBMFSBJO ERA 26 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 27 LE World @ Glance

LEGAL UPDATES FROM ACROSS THE GLOBE

United Kingdom Norton Rose Fulbright spreads wings to cover technology consulting practice

Later in 2019, Madeline set up her own consulting business, where she supported Insurwave as well as working on other consulting projects focused on digitalization in insurance.

Madeline joins Peter McBurney, Professor of Computer Science and former Head of the Department of Informatics at Kings College London, to lead the Technology Consulting Practice.

With a formidable team in Peter and Madeline in place, Norton Rose Fulbright will be offering a variety of services including strategic and practical advise to help clients take full advantage of new and With a formidable team in place, Norton Rose emerging technologies, particularly related to artificial Fulbright can now offer strategic and practical intelligence (AI), distributed ledger technologies (DLT) advise to help clients take full advantage of new and (including Blockchain) and cryptocurrencies. emerging technologies, particularly related to artificial intelligence, distributed ledger technologies (including “Our Technology Consulting Practice continues to do Blockchain) and cryptocurrencies. innovative work with clients and emerging technologies around the globe. Maddy (Madelin Bailey) brings a Global law firm Norton Rose Fulbright has hired the wealth of experience and technical knowledge to the services of Madeline Bailey in its bid to spread its wings team which strengthens and complements our existing and covers every possible aspect of the Technology platform, meaning we can further service clients in Consulting Practice. She joins Norton Rose Fulbright advising on all aspects of technology adoption across all as the Co-Head of its Technology Consulting Practice sectors,” Sean Murphy, Norton Rose Fulbright’s global and will be based in London. head of FinTech as well as its head of technology and innovation in Europe, said. Madeline was previously Global Head of Strategic Initiatives at leading global specialty commercial By combining the practice’s deep technological insurer and reinsurer MS Amlin, where she established knowledge with the firm’s extensive legal and the MS Amlin Edge initiative exploring the latest regulatory expertise, Norton Rose Fulbright can advise megatrends globally in digital, business models and clients across all sectors around the world on all aspects (re)insurance. She has also served on the boards of of the adoption, development and implementation of the various MGA/service companies in the UK, Europe, these emerging technologies. Singapore, Dubai, the US and India. “I am excited to join the team working with Peter to Madeline has the requisite experience of fast emerging further develop the offering. The advances in new Technology Consulting Practice being an industry and emerging disruptive technologies in recent years collaborator at MS Amlin, involved in establishing have been constant and are sure to continue. It is an the first commercial blockchain platform for marine exciting time to join the firm and work with colleagues insurance, Insurwave, alongside global logistics group and clients from around the world, to work to solve A.P. Møller – Mærsk and other industry collaborators, business problems leveraging technology,” Madeline led by consulting firm EY. commented. ERA 28 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 29 International

Norton Rose Fulbright’s Technology Consulting provide insurance protection for the secure vault Practice recently advised on a first-of-its-kind storage of private keys for digital assets such as insurance solution for digital assets. The practice bitcoin and other cryptocurrencies. The Blue Vault provided technical advise to Lloyd’s underwriter solution was developed in collaboration with Marsh, Arch in relation to “Blue Vault”, a new solution to a leading global insurance broker and risk advisor.

France French court slaps hefty fines for deceit against pharmaceutical giant and regulator

A Paris court has levied a hefty fine on the pharmaceutical giant Servier in France’s biggest ever medical scandal that spread across many decades and caused hundreds of deaths.

After a trial that lasted for over 517 hours from September 2019 to July 2020, a Paris court held Servier guilty of “aggravated fraud” and “involuntary manslaughter” over its diabetes and weight loss pill, Mediator.

The court fined Servier €2.7 million and ordered the pharmaceutical giant to pay hundreds of millions more in damages that will be shared out by plaintiffs, the court levied a fine of €303,000 against France’s drug regulator, l’agence nationale de sécurité du médicament et des prollduits de Servier sought to deny the allegations that it santé (ANSM), for failing its mandate to protect knowingly deceived consumers. Its counsel consumers. asserted that Servier did not identify any significant risk before 2009. The Court also pronounced a four-year suspended sentence to Jean-Philippe Seta, the former right- The first alerts on the toxicity of the drug emerged hand man of Servier’s CEO Jacques Servier, who in the 1990s when reports connected it to lesions was subject to initial proceedings but died in 2014. on patients’ heart valves (valve disease), as well as The Court was inundated with more than 6,500 pulmonary arterial hypertension (PAH), which is a petitions seeking justice. Over 400 lawyers worked rare and fatal pathology. on the case in which the central questions was how could Mediator have been prescribed for well over Damages for aggravated deception, manslaughter, three decades, despite repeated alerts regarding it and other harms total hundreds of millions of being a dangerous medicine? The pill was used by euros. Servier had as of 1 March 2021 had sent over 5 million persons until it was pulled out of the 3,884 compensation offers totaling €199.6 million market in 2009. to consumers, €177.6 million of which has already been paid out. The prosecution successfully managed to establish before the Court that Servier had knowingly This, however, will have no impact on the Court concealed the anorectic properties and dangerous order for the pharmaceutical giant to cough up side effects of these pills. €2.7 million as penalty. ERA 28 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 29 LE World @ Glance

United States of America ‘Just Do It’ isn’t a done thing in this case

tab. The back of one shoe says “MSCHF” and the other says “Lil Nas X.”

The accused MSCHF Products Studio has in a way already admitted to the charges leveled against it with its CEO Gabe Whaley admitting in a statement that Nike did not have any involvement whatsoever in the project.

He added that his streetwear company purchased the sneakers from Nike and then made its own modifications before marketing them.

Monetro Lamar Hill, 21, who goes by his stage name Lil Nas X and is a Grammy-winning rapper, released a music video recently in which he is seen dancing The American multinational company Nike Inc with a character wearing devil horns, though the has filed a trademark infringement lawsuit rapper has not been named in the suit. against a New York-based designer who modified its shoes for young rapping sensation Lil Nas X The modified shoes sold out like hotcakes with and launched the same in the retail market as all 666 pairs of the Satan Shoes getting sold off its limited-edition satanic-themed Air Max 97 within a minute of its launch. Each pair of shoes shoes. was priced at $1,018. Nike was forced to issue a media statement that the MDCHF’s Satan Shoes In its suit filed before the New York federal court, is not a product authorized or approved by it and the American MNC has claimed that the MSCHF that it does not endorse it. Product Studio Inc altered its trademarked product without its “permission and authorization”. Nike, which is suing for trademark infringement, dilution and unfair competition, asked the Court The customized footwear are decorated with a to immediately stop MSCHF from fulfilling orders pentagram pendant, pentagram designs on the for the shoes and requested a jury trial to seek heel and an inverted cross on the tongue pull- damages. ERA 30 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 31 International

United States of America US Court evicts France.com domain squatter

A much-debated domain squatting case has finally been settled in favor of the French Republic after cross-border litigation that lasted for nearly six years.

The domain was finally given to its rightful owner with the US Fourth Circuit ruling in favor of the French Republic thereby evicting an illegal squatter who had been using domain France.com to promote his business for over a quarter-century.

The Court held that France is immune from US trademark infringement claims in the case brought by Jean-Noel Frydman, the former owner of France. com. Jean-Noel is a US citizen of French origin who had registered and was running France.com since European Union found in 2018 that “France.com” 1994 to sell French travel services. cannot be registered as a trademark as it is similar to a previous trademark registered in 2010 by Circuit Judge Diana Gribbon Motz, joined by Judges France. Henry Floyd and Allison Jones Rushing, ruled that the French government did not engage in commercial According to the Tribunal, “the signs at issue cover activity that would negate its sovereign immunity identical or similar services and exhibit a particularly when it won the rights to the domain name in a high degree of phonetic and conceptual similarity,” French court from France.com Inc. which causes a likelihood of confusion.

Jean-Noël Frydman had registered a company Not ready to give in without exhausting all available called France.com Inc. in California and owned legal options, France.com Inc. subsequently sued both US and EU trademarks protecting the name. the French Republic in a Virginia Federal Court for Frydman’s trouble started when his company cybersquatting and trademark infringement. sued a Dutch company in French Court in Paris for infringing on the trademarks. The French The US District Court Judge Liam O’Grady in government intervened by asserting that it had the Alexandria rejected the French government’s sole right to use the name “France” commercially request to dismiss the case under the Foreign under French law. Sovereign Immunities Act in 2019.

The French Court had rendered a judgment in favor The Fourth Circuit, on appeal, observed that the of the French government in 2015. The French US Supreme Court had already deemed sovereign Court had then ruled that the company’s use of immunity a threshold question that should be the domain name infringes on the rights of the addressed “as near to the outset of the case as is French Republic to its name. The court ordered the reasonably possible.” transfer of “France.com” to France. The Fourth Circuit gave the decisive ruling bringing The Paris Court of Appeals in 2017 affirmed the the curtains down on the domain dispute case lower court’s decision. saying that France was immune from the claims because neither the commercially reasonable Jean-Noël Frydman encountered another nor the expropriation exemptions apply in this disappointment when the General Court of the instance. ERA 30 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 31 LE World @ Glance

United States of America EU initiates legal action against UK

February this year in which the UK had promised to provide a new operational plan concerning supermarkets and their suppliers, alongside additional investment in digital solutions for traders in accordance with the Protocol.

The Protocol on Ireland and Northern Ireland is the only way to protect the Good Friday (Belfast) Agreement and to preserve peace and stability while avoiding a hard border on the island of Ireland and maintaining the integrity of the EU single market. The EU and the UK agreed on the Protocol together. We are also bound to implement it together. Unilateral decisions and international law violations by the UK defeat its very purpose and undermine trust between The United Kingdom (UK) is on the brink of being us. The UK must properly implement it if we dragged to the European Court of Justice by the are to achieve our objectives, Maroš Šefčovič, a European Union (EU) following its failure to abide Slovak politician serving as Vice-President of the by the provisions of the EU Withdrawal Agreement. European Commission and the EU’s co-chair of the Joint Committee, said in a statement while The European Commission on 15 March 2021 sent justifying the move to serve the legal notice. a letter of formal notice to the UK for breaching the provisions of the Northern Ireland Protocol The UK has been given one month to submit and its good faith obligation under the EU its observations to the letter of formal notice, Withdrawal Agreement. following which the EU Commission will decide whether to continue with the proceedings and The EU notice asked the UK government to refrain request the European Court of Justice to impose from breaching the UK’s international obligations a lump sum or penalty payment. under the Withdrawal Agreement. It has also called upon the UK to enter into bilateral consultations The EU is also contemplating providing another in the Joint Committee in good faith, to reach a notice to commence consultations under Article mutually agreed solution by the end of March. 169 of the Withdrawal Agreement, which provides for a Dispute Settlement Mechanism process. The notice follows the UK government’s statement earlier this month that indicated its Failure to solve the Northern Ireland Protocol intention to unilaterally delay the full application impasse could witness the issue being referred of the Protocol on Ireland and Northern Ireland to binding arbitration, which in turn may impose concerning the Movement of goods and pet financial sanctions by the arbitration panel. travel from Great Britain to Northern Ireland. This would affect extending the grace period This is the second occasion that the EU and the UK about implementing the new rules for exports have locked horns over the implementation of the from the British mainland to Northern Ireland. Withdrawal Agreement after the UK government attempted to adopt the Internal Market Bill The UK government had made a commitment (UKIMB), which would have unilaterally override at the EU-UK Joint Committee meeting in parts of the country’s Brexit deal with the EU. ERA 32 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 33 International

35(6(176 $ 5 /(*$/ ( :20(1,1 /$:(;&(//(1&( $:$5'6

:,11(566+$//%($11281&('21 0D\ $ 5 /(*$/ ( :20(1,1 /$:$:$5'6

Ð6IGSKRM^MRK;SQIR0IEHIVWLMT*MRIWWI %GLMIZIQIRXWÑ

-R8SHE] W7SGMIX] -'SRXVSP1]3[R0MJI ,%RH,S[-0MZI-X ´'(&,'( 宓宕守宖守宑宗完宑宊季宓宄宕宗宑守宕宒宕宊宄宑完宝守宇季孩季宆宒宑宆守完宙守宇季宅宜´

)25025((148,5,(63/($6(&$// (PDLOXVDWVKUXWL#OHJDOHUDLQ_NKXVKEX#OHJDOHUDLQ ERA 32 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 33 _ LE Within the Circle

Shardul Amarchand Mangaldas & Co. advises ICICI Securities and JM Financial Limited to invest in Poly Medicure

Shardul Amarchand Mangaldas & Co. advised on the R400 crore qualified institutions placement by Poly Medicure Limited. ICICI Securities Limited and JM Financial Limited acted as Book Running Lead Managers.

The transaction team was led by Prashant Gupta, National Practice Head; Sayantan Dutta, Partner; Anjali Verghese, Senior Associate; Maharghya Biswas, Associate and Tripti Pandey, Associate.

Squire Patton Boggs (MEA) LLP advised ICICI Securities Limited and JM Financial Limited on United States Legal aspect.

Shardul Amarchand Mangaldas & Co. advised acquisition of Flutter Entertainment in Junglee Games

Shardul Amarchand Mangaldas & Co. advised Flutter Entertainment Plc. to acquire 50.06% of the securities of Junglee Games Inc. - a leading online real money gaming company in India including shares of Ankush Gera. The date of closing was 28 January 2021.

The transaction team was led by Puja Sondhi, Partner; Aayush Kapoor, Partner; Aakanksha Dalal, Senior Associate; Harjas Singh, Associate.

The transaction team was supported by the following specialist teams: Payments Systems team (led by Zubin Mehta, Partner), Intellectual Property team (led by Mukul Baweja, Partner), employment team (led by Pooja Ramchandani, Partner), Data Privacy team (led by Shahana Chatterji, Partner) and tax teams (led by Amit Singhania, Direct Tax Partner and Rajat Bose, Indirect Tax Partner). Junglee Games, Michelman & Robinson LLP were legal counsel to Junglee Games (ii) Arthur Other advisors on the deal were: (i) Horatio Cox LLP were legal counsel to Flutter and (iii) Partners were exclusive financial advisors to Paul Hastings were the US counsels to Flutter. ERA 34 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 35 Deal Corner

CAM acts on Adani Ports and SEZ Ltd. Acquisition of Stake in Gangavaram Port

Cyril Amarchand Mangaldas advised Adani Ports and Special Economic Zone Limited (Adani Ports) on acquisition of 58.10% stake held by D.V.S. Raju and other promoter entities (Promoters) in Gangavaram Port Limited (Gangavaram Port) for R 3,604 crore. The transaction follows 31.50% stake acquisition from Warburg Pincus Group.

Earlier this month, Adani Ports had announced the acquisition of Warburg Pincus group’s 31.50% stake in Gangavaram Port. Once the current acquisition receives requisite approvals, Adani Ports will end up owning 89.60% stake in Gangavaram Port.

The General Corporate and Competition Law teams of Cyril Amarchand Mangaldas advised Adani Ports on the Transaction. The Competition Law team was led by Avaantika Kakkar, Partner (Head – Competition), Anshuman The Transaction was led by Smruti Shah, Partner; Sakle, Partner; with support from Kaustav and Paridhi Adani, Partner, with support from Kundu, Principal Associate; Ruchi Verma, Senior Aviral Chauhan, Senior Associate and Neham Tayal, Associate. Senior Associate. The Transaction is subject to approval from The due diligence team was led by Paridhi Adani, Competition Commission of India. Partner; with support from Aniket Singhania, Senior Consultant; Esha Sanas, Associate; and Rual The Transaction was signed on March 23, 2021 and Chudukattil, Associate. is expected to be closed by September 30, 2021.

.12:

7+(.12:7+(//$$:<(56: $ 5 ( /(XXX*MFHBMFSBPOMJO$FDPN/ )RU6XEVFULSWLRQ5HODWHG(QTXLULHV HPDLOXVDWLQIR#OHJDOHUDLQ25&RQWDFW_ ERA 34 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 35 LE Lateral Moves

Lateral Moves

Jackie Holland joins Cleary Gottlieb to strengthen its UK competition practice

“We are delighted to welcome Jackie to our firm,” said Cleary Gottlieb Managing Partner Michael Gerstenzang. “She brings formidable talent to our market-leading competition practice.”

Jackie said, “I’m thrilled and honored to be joining Cleary Gottlieb’s outstanding competition team. Their global antitrust practice is among the best in the world, and I’m really looking forward to being part of the group. I’ve known many of the firm’s lawyers for years and have been very impressed by how quickly they’ve established one of the leading practices in town. It’s a fascinating time to be a competition lawyer in London given the CMA’s enhanced role in the Leading UK antitrust lawyer Jackie Holland is all post-Brexit world. I can’t wait to get started.” set to join Cleary Gottlieb in its London office as a partner. Her appointment is part of the firm’s According to Nicholas Levy, Cleary Gottlieb’s endeavor to strengthen its UK competition competition partner in London, UK has been practice. witnessing an increased role of the CMA’s following Brexit. Cleary Gottlieb’s London office With over 25 years of experience in private is experiencing accelerated growth to deal with practice, merger control, State aid, competition cases previously managed exclusively in Brussels. litigation, and sectoral regulation, Jackie was “Jackie brings a wealth of experience to our a Senior Director of the Office of Fair Trading, team. A leader of the bar, she is hugely respected the predecessor to the Competition and Markets within the UK competition community. We’re Authority (CMA), where she was a Phase 1 merger delighted to have her among us,” Nicholas said. decision-maker. “Cleary has one of the strongest competition She excelled in that role and helped to reform law practices in the world... To complement our the agency’s merger control regime and antitrust leading EU, U.S., and international practices, we procedures, and introduced a Procedural Officer have grown our UK practice substantially in recent to oversee the agency’s casework. years, advising on many of the most challenging UK matters of recent years. Jackie’s arrival will enhance Cleary Gottlieb is a leading global antitrust our UK and other European practices.” said Maurits practice. Jackie will join a team of highly regarded Dolmans, competition partner in London. lawyers in the field, including other former senior officials from the U.S. Federal Trade Commission, Competition partner Paul Gilbert termed Jackie the U.S. Department of Justice, the UK CMA, and as an exceptional lawyer. “I have worked the European Commission’s Directorate-General with Jackie at the Office of Fair Trading and in for Competition, as well as several lawyers private practice, and am excited to be doing so who have worked at the European Courts in again. She’s a fantastic colleague and will bring Luxembourg. tremendous experience to our team.” ERA 36 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 37 Lateral Moves

King & Spalding gets Ken Beale as international arbitration partner

American law firm King & Spalding has roped in international arbitration lawyer Kenneth D. Beale as a partner in the firm’s Trial & Global Disputes Practice. Beale will be initially located in its London office relocate to Washington, D.C. in the fall.

Beale specializes in advising on commercial and investor-state arbitrations before leading arbitral institutions, including the ICC, LCIA, SCC, VIAC, and HKIAC, as well as in matters under the UNCITRAL Rules.

He has experience with disputes in the oil and gas, financial services, telecommunications, energy and manufacturing sectors, as well as with breach of contract, joint venture, and post-M&A disputes. So far he has advised on more than 100 high-stakes financial services, make him a key addition to King & arbitrations throughout the world. Spalding disputes practice, Andy Bayman added.

Beale was associated with Boies Schiller Flexner’s Beale, who is ranked in Chambers & Partners, has London office as the Administrative Partner. King & taught international arbitration as an adjunct Spalding had made several hires in the recent past professor of law at numerous universities, most in California, New York and Washington D.C. recently at the University of Pennsylvania Law School. “Ken (Beale) is an ideal fit for our firm, with incredibly strong links with K&S colleagues in the US while also “King & Spalding has a momentum and trajectory as slotting in perfectly with our leading international a firm that make(s) it the place to be,” said Beale. arbitration platform,” said Andy Bayman, chair of “K&S is the global market leader for international the firm’s Trial & Global Disputes Practice. arbitration, and I have known and respected many of the firm’s partners and am excited to work with Beale’s experience in international disputes, them to solve our clients’ most difficult challenges especially in strategic areas such as energy and and needs.”

Latham & Watkins elects Lisa Watts its new Vice Chair

American law firm Latham & Watkins LLP has Lisa currently is an Executive Committee member announced the election of its New York partner Lisa since 2018. She joins Chicago partner Brad Kotler, Watts as the firm’s new Vice Chair with immediate who currently serves as one of the firm’s two Vice effect. Chairs.

Lisa succeeds Ora Fisher, the Bay Area partner Lisa is recognized as a highly respected tax who served as Vice Chair since October 2011. Ora practitioner. Alongside her prominent commercial is slated to retire later this year after rendering practice, she has held numerous leadership nearly three decades of glorious service to Latham positions at the firm. She was previously Global & Watkins. Chair of the Training & Career Enhancement ERA 36 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 37 LE Lateral Moves

with the most inspiring and hard-working people. I’m excited to have this opportunity as Vice Chair to work with my partners, colleagues, and clients to grow and succeed together.”

Ora Fisher added: “Lisa has a special combination of intellect, enthusiasm, and business savvy that makes her a natural and successful leader. Her deep institutional knowledge of our firm and understanding of the business issues our clients face will also serve her well as Vice Chair.”

Lisa joined Latham & Watkins in 1999 after receiving her JD from the New York University (NYU) School of Law. She also holds an LLM from NYU School Committee (2016-18), Local Department Chair of of Law and an undergraduate degree from Brown the Tax Department in New York (2011-16), and Co- University. Chair of the Women Enriching Business Committee in New York (2012-2014). “Through our client work and on the Executive Committee, I’ve come to know Lisa as someone “Over the past two decades, Lisa has built with undeniable rigor and a relentless pursuit of an impressive track record of leadership and excellence,” said Vice Chair Brad Kotler. “I am unwavering dedication to our clients. She has excited to serve alongside Lisa as Vice Chairs of brought fresh insights, sound judgment, and a the firm, and I thank Ora for being such a great determined drive to the Executive Committee, and mentor and colleague to me and countless others I look forward to continuing to work closely with at Latham.” her, Brad, and the Executive Committee to lead the firm forward,” said Rich Trobman, Chair and “Lisa has demonstrated a strong commitment Managing Partner of Latham & Watkins. to each issue she takes on. She brings passion, a strategic perspective, and extraordinary analytical The Latham & Watkins Chair congratulated Lisa skills to everything she does, from helping to on being elected to the new leadership role and build a preeminent tax practice, to providing expressed his gratitude to Ora for her innumerable inspired leadership on professional development contributions to the firm’s success. and diversity matters,” said LeeAnn Black, Chief Operating Officer of Latham & Watkins. “Ora is an outstanding lawyer and gifted leader, a true trailblazer, a beloved friend and colleague, Lisa is reputed for providing strategic solutions to and a role model to so many at our firm and in the complex corporate and partnership taxation issues. legal community. Her legacy is significant and will She advises the world’s leading private equity firms, be long-lasting,” said Trobman. public and private companies, investment banks, real estate investment trusts, and partnerships and Watts commented: “I’m honored and humbled limited liability companies on the tax aspects of to be elected by my partners as Vice Chair of our the significant US and cross-border transactions. great firm. I’m equally honored to follow in Ora’s She has considerable experience advising on footsteps. During my years at Latham, I’ve worked sophisticated transactions.

Inbox ERA 38 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 39 Lateral Moves

ArcelorMittal elevates Sapan Gupta as its Global General Counsel

Sapan had joined ArcelorMittal Nippon Steel in April 2020, as General Counsel with responsibility for legal affairs, compliance and company secretarial affairs.

Previously Sapan was working as a Partner and National Practice Head at Shardul Amarchand Mangaldas. He has also worked with Bajaj Finance where he handled all legal matters in his role as first Chief Legal Officer and before that he was Deputy Head of the legal team at Standard Chartered Bank in South Asia, overseeing all transactions and managing risk in the region.

Sapan has also worked at global law firm Sidley Austin in New York. Sapan Gupta, who is currently the General Counsel of ArcelorMittal Nippon Steel (AMNS) and Vice Sapan has significant experience in various areas of law President at ArcelorMittal Group has been elevated including Dispute Resolutions, Banking and Finance, as the Global General Counsel of ArcelorMittal. Bankruptcy, Fintech, Mergers & Acquisitions, Private Equity, Capital Markets, Industrials, Manufacturing The appointment is effective from June 1, 2021. and Infrastructure.

Pratibha Jain quits Nishith Desai to join Everstone Group as Group General Counsel

In an instance of a major legal reshuffle in the country, Pratibha Jain – a partner at law firm Nishith Desai Associates (NDA) and the founder of the firm’s Delhi office – has quit NDA to join Everstone Group as their Group General Counsel.

She will be replacing PM Devaiah, the Vice Chairman and Group General Counsel at Everstone Group, who has stepped down and would soon join Adani Group as the Group General Counsel of the diversified conglomerate.

Pratibha is scheduled to join Everstone Group as Group General Counsel on 1st May, private equity, mergers and acquisitions, 2021. She will also head the corporate affairs corporate and regulatory advisory and public vertical. policy matters.

Pratibha had joined NDA from Goldman Sachs. She holds a Bachelor of Civil Law degree from She has extensive experience in US and Indian the University of Oxford and LLM degree from securities laws. Her areas of expertise include Harvard University. ERA 38 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 39 LE Lateral Moves

Richa Choudhary moves from AZB & Partners to Trilegal as Partner

In a Press Release by Trilegal, Bhakta Patnaik – Partner and Head of Capital Markets was quoted as saying, “Richa, with her positive attitude, entrepreneurship and technical abilities will add tremendous value not just to our capital markets practice but also the Trilegal brand. We welcome her and I look forward to working with her.”

Nisha Kaur Uberoi, National Head, Competition Law at Trilegal said, “Richa is an excellent lawyer and a welcome addition to our partnership. We look forward to her further enhancing our strong capital markets and securities regulatory practice.” Richa Choudhary who was earlier working with AZB & Partners has moved to Trilegal as Partner in the In the release, Harsh Pais, Partner and Co-Head of Capital Markets Practice. With her addition, firm’s Corporate Practice Group was quoted to be saying, Partnership strength has grown to 58. “Our capital markets practice has a strong pipeline of mandates and Richa adds excellent issuer-side Richa specializes in debt and equity capital markets, capabilities for both debt and equity. as well as regulatory and securities laws. She has also advised on various aspects of securities regulations She is an alumnus of Symbiosis Law School, in the context of investment/acquisition of shares in Pune. Chaudhary has led several domestic and Indian listed companies, takeover regulations, buy- international capital markets transactions for both backs, prevention of insider trading and listing. equity and debt fund raising.

Damini Bhalla joins Zomato as General Counsel

Erstwhile Partner at L&L Partners – Damini Bhalla has joined food delivery start-up Zomato as their General Counsel. She will replace GT Thomas Phillippe who left Zomato last year.

Damini is specialized in Mergers and Acquisitions and Private Equity transactions. While at L&L Partners, she was also involved with the law firm’s funds practice.

Damini has graduated from National Academy of Legal Studies and Research (NALSAR).

Earlier Damini has also worked with the law firm Clifford Chance in their London office. IPO and is planning to file the draft prospectus by April for its IPO that could raise about $650 Zomato has announced Initial Public Offering million. ERA 40 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 41 Lateral Moves

Jitesh Shahani joins S&R Associates as a Partner in Mumbai

investment-grade debt offerings and equity-linked offerings of exchangeable and convertible bonds. He also advises issuers and holders on liability management and restructuring transactions.

Jitesh has previously worked with Linklaters, Baker McKenzie and Allen & Overy in Singapore and L&L Partners in New Delhi.

Jitesh received a B.A., LL.B. (Hons.) from the NALSAR University of Law, Hyderabad in 2005 and an LL.M. from the New York University School of Erstwhile Partner at the firm – L&L Partners – Jitesh Law in 2011. Shahani has joined S&R Associates as a Partner in the Firm’s Mumbai office. S&R Associates has offices in New Delhi and Mumbai. The Firm’s practices include mergers Jitesh Shahani’s practice focuses on equity and debt and acquisitions; capital markets; private equity; capital markets transactions. He has represented litigation and arbitration; banking and finance; issuers and investment banks on a variety of capital restructuring and insolvency; competition law; markets transactions, including public offerings and corporate governance; regulatory; and general private placements, international high-yield and corporate.

Erstwhile Vice Chairman and Group General Counsel at Everstone Group – PM Devaiah is all set to join the Gautam Adani led Adani Group as the Group General Counsel

and was elevated to the position of Vice Chairman & Group General Counsel. At Everstone, he was part of a fully integrated and captive legal team that served internal legal and compliance requirements of all the verticals in the India and Southeast Asia focused private equity and real estate investment company. He was also involved in private equity laws, securities laws, cross-border legal and regulatory issues and compliance oversight over portfolio companies.

Devaiah’s experience spans across a variety of industries, including telecommunications, power, IT services, FMCG, manufacturing, private equity, real A veteran with more than 27 years of experience estate and multimodal transport. He has previously as an in-house counsel, PM Devaiah has worked worked for multinational and leading businesses with various blue chip companies and has handled including Tata Projects, Hindustan Unilever, Carlyle a number of domestic and international legal and Group, ICICI Venture and BPL Cellular. regulatory assignments and projects. Devaiah holds a Bachelor of Commerce, Bachelor of Laws Devaiah joined Everstone in 2007 as General Counsel and Master of Laws from the University of Mysore. ERA 40 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 41 LE Lateral Moves

Manav Raheja joins Veritas Legal as Partner in the Corporate Practice

Manav has rich experience of over 15 years in Corporate practice, having advised on a variety of matters relating to Mergers & Acquisitions, Private Equity and Venture Capital Investment transactions, Joint Ventures and Commercial Dispute Advisory matters.

According to Abhijit Joshi, Managing Partner at Veritas Legal, “Manav is backed by a considerably diverse experience in the corporate advisory and transactions sphere, and his skill-set will be a great value addition to the team, thereby augmenting the corporate practice of the Firm. We welcome Manav to the Firm.”

On moving to Veritas Legal, Manav Raheja Manav Raheja who was working with J Sagar commented, “I am excited to contribute and grow Associates as a Partner has joined Veritas Legal as the practice at Veritas and look forward to the new Partner in the Corporate Practice. chapter in my career.”

RECENT TRENDS IN THE INDIAN INTELLECTUAL PROPERTY LANDSCAPE

Patent cases are on the rise, a majority of which are pharma and agrochemical related while telecom come a close second ERA 44 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 45 Insights

Introduction: or matter is delayed or stuck up, Courts and Tribunals are regularly entertaining applications This article will examine some recent trends in for early hearing of cases. the Indian Intellectual Property landscape, some procedural issues and some substantive issues, viz.

1. On the procedural side, the most momentous Case management Hearing: change has been the time revolution, not only 3. before the Courts and Tribunals but in the The next big change is Case Management by Judges Patent and Trademark Offices in prosecution who can regulate: matters as well. 2. Root and branch changes brought in by the 1. The number of witnesses; Commercial Court Act as per which a lawsuit 2. The duration of cross examination; and can conclude within one to two years. 3. The duration of interim or final arguments.

Judges are not just holding the ring but actively pushing the matter forward suggesting mediation or settlement or passing summary judgment when 1. New modes of serving the Defendant: they do not see need for a full trial. Service of Defendants can be done instantaneously through email, SMS or even WhatsApp. Thereafter, the lawsuit progresses with strict deadlines, which if missed, could result in dismissal of the lawsuit or Recording of Evidence Made Easy: decree of the suit. 4. a. Another change is the collection of evidence. The most important and critical deadlines (which Local Commissioners are appointed regularly cannot be condoned) are as follows: (from retired Judges or senior lawyers) to record evidence. The proceedings can be flexible as to 1. Filing the Written Statement by the Defendant, place, date and time. i.e. maximum 120 days; b. It is usual for evidence to be recorded at the 2. Filing the replication by the Plaintiff, i.e. within business centre of a hotel over the weekend and 45 days of the Written Statement; beyond Court hours. 3. Compliance after obtaining an injunction within c. Where witnesses were unable to physically be a day up to a week or so, as ordered by the present due to illness or retirement or otherwise, Court; and evidence was recorded via Video Conferencing. 4. Appeals from an order of the Judge or the Registrar i.e. a month or 15 days respectively.

Flexible Approach while Adjudicating 5 . IP disputes: Time bound Proceedings before 2 . Trademark & Patent Office and IPAB: i. During the COVID-19 months, the Courts, at all levels (District, High Courts and Supreme Court) have adopted virtual hearings enabling anyone a. The time changes have also come about at from India or overseas to attend a hearing. the Patent Office, as a patent can be granted Judges agree to screen sharing and lawyers within a period of 2 to 4 years and a trademark in a team are able to collaborate from their registered within 1 to 1½ years. b. The speed with which the Intellectual Property respective homes or offices. Appellate Tribunal is hearing and disposing ii. Another recent trend is a liberal and flexible matters is also unprecedented. approach to remedies. IP cases involve injunction c. As a practical advise to anyone whose case and Anton Piller orders at the interim stages. ERA 44 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 45 LE Insights

a case of passing off is far simpler than trying to pull out old records such as invoices, orders and advertisements; photographs from a digital camera; video footage; drone evidence etc. can help prove a case. A certain procedure under Section 65B of the Evidence Act needs to be followed.

6. Developments in disputes related to IP: Trademark Disputes:

a. In trademark cases, the Plaintiff may seek a declaration that the trademark is well known and if granted then the trademark is put on a register maintained by the Trademark Office which has less than 100 trademarks on it. Pravin Anand The strength of being well known is that the Managing Partner proprietor can stop misuse of the mark on any goods and services and the trademark does not have to be used for all those different goods. The Registry will raise a serious objection if anyone seeks to register the mark for different goods even when the proprietor has failed to file an opposition.

b. In recent years, a large number of non- traditional trademarks have been protected by the Indian Courts e.g. EPI leather surface design of LOUIS VUITTON; BERKIN bag and its shape of HERMES; Shape of ZIPPO lighters; FERRERO They involve damages both compensatory and ROCHER chocolate with its crumpled gold foil in punitive at the final stage. Courts also grant a tray; etc. Mareva Injunctions to freeze bank accounts etc.; John Doe orders where the identity of the Domain Name Disputes: counterfeiter is unknown. c. The Courts have also protected Domain names iii. The Indian Courts have taken remedies to and developed principles such as: the harm another level. Actual costs are granted to a on the internet can be massive due to the winning party. If the Defendant is found to be anonymity of the wrong doer and the vast an infringer, he is made to pay back to society, affordable distribution as compared to the in some way, even if he does not have the physical world. finances to pay damages to the Plaintiff. He may be asked to plant thousands of trees to Trade Secrecy Disputes: check pollution and thus benefit the public; to provide community service at an old age home d. In trade secrecy cases, it is now possible to set or at an orphanage; to donate to a hospital or a up a confidentiality club of lawyers and external cancer society, etc. experts (and sometime representative of the parties) who alone can see documents placed iv. In recent years, electronic evidence has become in a sealed cover. admissible. Hence, internet downloads to prove e. The club members can inspect the documents, ERA 46 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 47 Insights

but copies cannot be taken. various collecting societies like IPRS (for f. The members must undertake an affidavit to musical composition and lyrics) or PPL (for honor the confidentiality of the documents. recordings) have stabilized. The newest of the collecting societies, ISRA - for Singer Due to the above, it is now easier to get discovery Performers, has a number of lawsuits for of sales and expert data for computing damages. establishing its rights. Sometimes the documents can even be redacted or be seen only by Attorneys or only by the Judge. m. Film piracy is rampant and a common remedy is to get a John Doe order even before release Mediation: of a new film against a large number of named and unnamed parties who are believed to have g. Another trend is to try mediation in most cases. indulged in piracy. In fact, mediation can be sought even before a lawsuit is commenced, known as the Pre- Modern Disputes in Modern Times: Litigation Mediation. Certain new types of cases are on the rise: Patents and Standard Essential Patent Disputes: n. First are copyright in engineering drawings used to produce three Dimensional articles. The 3D h. Patent cases are on the rise. The majority of reproduction is held to be infringement of copyright these are Pharma and Agrochemical cases while in the said drawings. Such cases are brought when Telecom cases are a close second. The Telecom no design or patent exists and a machine part or auto cases are mostly Standard Essential Patents part, for example, is copied in its full dimensions. (SEPs) where it is usual to prove infringement through claim charts that map the Plaintiff’s o. Second are cases of comparative advertising in patent claims against some cellular or video which competitors keep attacking each other standard (e.g. 3GPP or HEVC). The Defendant’s and injunctions are granted against disparaging device is often tested and also mapped against advertisements, as Courts tolerate puffery but the said standard. not untrue statement or disparaging another’s product. You may praise yourself but not defame i. In these cases, i.e. SEP cases, injunctions are the other. rare and most interim orders concentrate on a financial deposit or a Bank Guarantee to secure p. Third category is web portals and platforms the Plaintiff, should he succeed at trial. selling legitimate goods and certain counterfeit goods. These platforms may be j. It is usual to have foreign expert witnesses protected as intermediaries under Section 79 to prove infringement and defend validity or of the IT Act (Information Technology Act). to prove that the terms of the license offered The law is that if a brand owner invites their by the Plaintiff were fair, reasonable and non- attention to such infringing products, they discriminatory (FRAND). are obliged to take them down. If, however, the portal has actively participated in the Copyright Disputes: sellers’ business, then it may be considered a rogue website and not an intermediary. If this k. A large volume of copyright cases used to is the case, then the URL’s may be restrained, be software cases filed by members of the and in some cases, the whole website may be Business Software Alliance (BSA) but over restrained. the years, these have decreased in numbers. The cases started with piracy of floppy disks and then CD’s. It changed to hard disk loading and then internet websites. It transitioned to end user piracy and now the cloud. 20 years Plaintiffs’ checklist of ‘Do Nots’: has seen a dramatic change in the digital 7. environment. Before Indian Courts, a Plaintiff must remember a l. In the music world, copyright cases of the few things: ERA 46 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 47 LE Know the Law

A. Never to conceal facts or suppress things F. Always check the statement made during from the Court. It is safer to overstate than prosecution of either a patent or a trademark understate. registration to ensure consistency.

B. Try not to delay filing a lawsuit as it may affect G. Explore the WRIT Jurisdiction for quick the balance of convenience and an interim remedies where the patent or trademark office injunction may be denied. is involved.

C. Never say no to a settlement offer. After H. Explore the contempt jurisdiction in case of considering it fairly, you may drop the settlement, violation of a Court order by the opposite but you should look fair before the Court. party. This may bring an early settlement to your action. D. In patent matters, particularly relating to drugs, explore a QUIA TIMET action before the release Since nearly 70% of IP cases are filed before the or launch of the Defendant’s product. Delhi High Court, most of the examples and learning relate to the said Court. Having said that, E. Try and appoint a local person in India, for quick it is imperative to mention that these principles filing as normally processes such as notarization are true for all High Courts having an original and apostille etc. through courier services can jurisdiction, apart from Delhi High Court namely, delay filing urgent actions, applications and Bombay, Madras and Calcutta. appeals.

Author: Pravin Anand Designation: Managing Partner

about Pravin Anand, Managing Partner of Anand and Anand, is a name to reckon with in the areas of intellectual property, litigation and dispute resolution.

He has been a counsel in several landmark intellectual property cases including HMV, which saw the first Anton the Piller order; Philips, the first Mareva injunction order; Philips, India’s first SEP litigation in a DVD player technology matter; Nokia, pre-suit mediation litigation; Hollywood Cigarettes, first Norwich Pharmacal order; Amarnath author Sehgal, which involved the moral rights of artists; Astra Zeneca, the first order under the Hague Convention; and cases for pharmaceutical clients such as Monsanto, Merck, Novartis, Pfizer and Roche.

LE Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature. ERA 48 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 49 ͕͔ ͖͔͖͔Ǧ͖͕ Know the Law (*$/ (5$ /,QGLDQ/HJDO$ZDUGV 5HFRJQLWLRQ2I/HJDO)LQHVVH ,QQRYDWLRQ $FFRPSOLVKPHQWV 120,1((6$11281&(' %(67/$:),502)7+(<($5 29(5$//

6KDUGXO$PDUFKDQG0DQJDOGDV &(1785

:,11(566+$//%($11281&(',1 0$<

ǡǤǤ ȁǤ %M??M{oaMG (PDLOXVDWVKUXWL#OHJDOHUDLQ_NKXVKEX#OHJDOHUDLQ _ ERA 48 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 49 LE Take on Board

As vaccinations are rolled out, spring raises its welcome head and we all cautiously emerge from lockdown, the risk is that we may forget all that we have learnt…

very cloud has a silver lining, or so the saying But in the last twelve months, many of us have goes. At some points during 2020, that learnt that there is another way. A way where sentiment was hard to swallow. But is it documents can be marked-up electronically, E possible that the lining of the dark COVID-19 bundles can be entirely electronic and hearings cloud cast over the world for the last twelve months can be successfully carried out virtually from the might be green, rather than silver? comfort of your own home (in close proximity to your own coffee machine or kettle and your own There is no denying that the worldwide impact of ceramic mug). For many of us, this has been a new COVID-19 has been truly devastating. The loss of learning curve. Yet it is not new. It was all there life has been overwhelming, perhaps too colossal before. Perhaps we just could not see it? for any of us to really contemplate. Moreover, the growing economic impact of the pandemic is, put The Campaign for Greener Arbitrations was simply, frightening. Businesses closing, national founded by international arbitrator Lucy debt rising to unprecedented levels and carefully Greenwood in 2019, well before any of us knew crafted livelihoods devotedly shaped over decades what it meant to be ‘furloughed’. The Campaign left in tatters. Add to that the impact on our was initiated to reduce the environmental impact children’s education and the mental health toll and of international arbitrations with the aim of it is easy to see why 2020 is a year that most of us significantly reducing the carbon footprint of would like to forget. the arbitration community. It started with a simple ‘Green Pledge’. Lucy pledged to reduce But whilst we have been staying home, protecting the impact of her own arbitration practice on our hospital and medical services and running our the environment and, before long, the wider professional and personal lives through the confines arbitration community’s interest was piqued and of Zoom, is it just possible that we have learnt an hundreds of individuals had made their very own important lesson we should never forget? Green Pledge.

Cast your mind back to life pre-March 2020. A new By signing the Green Pledge, individuals and/ arbitration matter falls on a lawyer’s desk in an or organizations sign up to the Campaign’s eight international law firm. In the majority of cases, a guiding principles with the aim of reducing the P.A is instructed to make up several lever arch files carbon emissions generated by their involvement and distribute copies to each member of the team. in international arbitration. Yet, for many of us, As the case progresses, the mountain of files grows the guiding principles will simply underline the and grows, ironically serving to block out light from way we have already been operating in a COVID the office windows. Identical copies are couriered climate. The principles encourage the use of to different cities, even different countries. Both videoconferencing facilities, electronic bundles, parties rush to book flights for countless clients, electronic correspondence and virtual hearings. At lawyers, witnesses, experts and arbitrators to the same time, they discourage unnecessary travel, gather together at a hearing, each turning up every reliance on high-energy consuming workspaces morning with a disposable coffee cup in hand. and wasteful printing. ERA 52 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 53 Take on Board

Over the last couple of years, perhaps spurred on by the effects of the pandemic, the Campaign has gone from strength to strength. Lucy has admirably brought together representatives from key stakeholders in international arbitration including arbitrators, law firms, hearing venues, third party funders, conference organizers, legal journalists, legal technology providers and corporate clients. The goal? To achieve a sustainable change in the way in which arbitrations are managed.

The Campaign has recently launched for public consultation its suggested Framework and six associated draft Green Protocols to promote better

Reed Smith LLP is an Gautam Bhattacharyya PARTNER institutional supporter of the Campaign for Greener Arbitrations and a signatory of the Green Pledge

environmental behavior. In the Campaign’s own words, the draft Green Protocols aim to reduce the carbon footprint of the international arbitration community by guiding organizations and individuals through a series of action items. The six draft protocols are each aimed at a different stakeholder in the international arbitration community. The draft protocols aim to set forth a framework for Victoria Spilkin the implementation of the eight Green Principles. SENIOR ASSOCIATE That’s right. Those same principles mentioned earlier which many of us have already (at least, partly) been implementing in our professional lives during lockdown.

The draft Green Protocols are a thought-provoking read for anyone involved in international arbitration. ERA 52 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 53 LE Take on Board

They provide practical and workable tips and a smart meter and repeatedly remind our children ideas to reduce carbon emissions generated by to turn off the lights, clients will quite rightly demand international arbitration work. Take the draft the same qualities from their professional advisors in Green Protocol for Law Firms, Chambers and Legal the workplace. Not only is this ethically the right thing Service Providers which suggests the installation to do, but clients now justly recognize that it is not of recycling facilities and timed LED lighting always necessary to expend thousands of pounds on sensors in the workplace, as well as partnering international flights, hotels and arbitration venues. with sustainable catering companies. Readers will quickly see that relatively small steps can lead to The Campaign for Greener Arbitrations is, in big environmental gains. many ways, about reducing unnecessary waste. Whilst that waste can (and should) be measured So what’s the risk here? in terms of carbon emissions, single use plastics and lever arch files, perhaps what we have learnt The risk is regression. As vaccinations are rolled is that the arbitration community’s ‘old ways’ out, Spring raises its welcome head and we all can also be measured in wasted costs and time. cautiously emerge from lockdown, the risk is that we forget all that we have learnt. For the sake Reed Smith LLP is an institutional supporter of the of our planet and future generations, we simply Campaign for Greener Arbitrations and a signatory cannot afford to let that happen. But perhaps of the Green Pledge. For further information in there is also a business reason to help persuade us relation to the Campaign, please visit: https://www. to fight the temptation to regress. greenerarbitrations.com/ Gautam Bhattacharyya and Victoria Spilkin are members of Reed Smith’s Just as many of us dutifully recycle at home, install International Arbitration Group.

Author: Gautam Bhattacharyya Designation: Partner Gautam specializes in international commercial arbitration and litigation in a broad number of areas. He is a about member of Reed Smith’s global board, its Executive Committee. He has been a partner in the firm since 2000 and is the former Managing Partner of Reed Smith’s Singapore office. He also co-leads Reed Smith’s India Business Team. the Author: Victoria Spilkin author Designation: Senior Associate Victoria is a Senior Associate in the Commercial Disputes Group. She has a broad range of experience encompassing litigation and alternative dispute resolution, including international arbitration and mediation.

BREXIT impact on jurisdictional clauses

If financiers require a judgment that is enforceable in the EU, then the analysis as to which jurisdiction clause would be most appropriate will now require especially careful consideration and most certainly local law advise. ERA 56 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 57 Zoom In

Huay Yee Kwan Partner

security parties located or based in the EU. If the enforceability of a judgment in the EU is a significant factor in the choice of jurisdiction, where does this leave parties to financing transactions that often provide for submission to the jurisdiction of the English courts?

Jurisdiction clauses

1. Pre and Post IP Completion Day

Prior to IP Completion Day, the jurisdiction of the English courts was largely dictated by Regulation (EU) No. 1215/2012 (the “Recast Brussels Regulation”). If an agreement included a Introduction submission to the courts of a particular EU Member State (which includes the UK), the courts of other In 2016, the United Kingdom (the “UK”) voted to EU Member States were generally required to leave the European Union (the “EU”) as a Member decline jurisdiction, and to defer to and enforce State. Since then, the UK has maintained its the judgment of the courts of that particular EU participation in the EU for a transition period during Member State pertaining to such an agreement. which the EU legislative framework continued to apply to the UK. The transition period has since Following IP Completion Day, the Recast Brussels ended on 31 December 2020 (“IP Completion Regulation has ceased to apply to the UK as the Day”) and today, the UK is officially no longer a UK is no longer considered an EU Member State. member of the EU. One major ramification relates The courts of EU Member States may therefore to the recognition and enforcement of English choose to accept jurisdiction even if an agreement court judgments in EU Member States which is key provides for submission to English courts. The in respect of transactions involving borrowers or question of whether an English court judgment ERA 56 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 57 LE Zoom In

may still be enforceable in EU Member States will be determined by the local laws of each EU Member State and as such the analysis may be less straightforward than the regime previously applicable pre-IP Completion Day.

This has been partially mitigated by UK’s accession to the Hague Choice of Court Convention 2005 (the “Hague Convention”) which came into force in the UK on 1 January 2021.

In relation to an agreement entered into after the Hague Convention was ratified by a participating state (which includes the EU) and where the jurisdiction clause in such an agreement is a two- way exclusive jurisdiction clause submitting to the court of such participating state, the Hague Convention generally requires (although there are some exceptions) all other participating states to:

Justin Gan A. respect parties’ choice of court in such Senior Associate participating state; and B. enforce judgments made by such court.

2. Types of dispute resolution clauses

Parties may now wish to consider the two-way exclusive jurisdiction clause anew when deciding which dispute resolution clause to use for their contracts. Simply put, a two-way exclusive jurisdiction clause is a jurisdiction clause which provides that all parties to an agreement submit to the courts of a certain jurisdiction.

Two other types of dispute resolution clauses currently more commonly used in financing transactions are the following: A. Asymmetrical jurisdiction clause – such a clause restricts one party to commencing proceedings only in the courts which they submitted to in the agreement, whilst allowing the other party to litigate in any jurisdiction.

Cherilyn Koh B. Arbitration clause – such a clause provides Associate that parties will resolve any disputes by way of arbitration rather than through a court-driven procedure.

Developments in the market have also pointed to a suggestion of using an asymmetrical hybrid clause which allows one party to choose between the jurisdiction of the English courts and arbitration, ERA 58 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 59 Zoom In

while restricting the other party to only either English court judgment in the EU via the two- the English courts or arbitration as provided way exclusive jurisdiction clause, against for in the agreement. In this regard, careful the benefits of having flexibility as to where drafting is required. Under English law, while proceedings may be commenced under an such asymmetrical hybrid clauses are valid and asymmetrical jurisdiction clause, which has enforceable, it is uncertain whether such clauses traditionally been the preferred option of will be covered by the Hague Convention (and financiers. With the current uncertainty on perhaps unlikely based on obiter comments at the enforcement of English judgments in the EU, Court of Appeal level in December 2020). Further, parties may also consider whether arbitration the issue of whether such a clause is within the may be more effective as a dispute resolution Hague Convention may not necessarily be decided mechanism in the appropriate transaction in each case under English law – it could be the law documents since it is unlikely that Brexit will of (for example) the country where enforcement affect recognition or enforcement of an arbitral of a judgment is sought. award, which are governed by the New York Convention 1958 and the resulting national In the context of resolving disputes within the laws in each contracting state. UK legal system, with the UK’s official exit from the EU, parties now have to decide if they should Conclusion adopt the two-way exclusive jurisdiction clause for use in agreements instead of the other options If financiers require a judgment that is enforceable available. in the EU, then the analysis as to which jurisdiction clause would be most appropriate will now require Key considerations include weighing up especially careful consideration and most certainly the benefits of ease of enforcement of an local law advise.

Author: Huay Yee Kwan Designation: Partner

Huay Yee Kwan is a partner in our Singapore office. She has a long track record of advising on high value and complex transactions for clients. Her experience encompasses a wide range of asset classes including offshore assets and maritime containers.

Author: Justin Gan about Designation: Senior Associate

Justin helps clients resolve commercial disputes whether in litigation, arbitration, mediation, or pre- the proceedings. He has a strong focus on marine and international trade matters, and also handles non- author contentious work in that sector. He is fluent in Mandarin and his matters often bear a PRC element. Author: Cherilyn Koh Designation: Associate

Cherilyn is in the finance team and has specialized in non-contentious shipping matters since the start of her legal career. She has experience in local and international ship financing transactions, leasing transactions, local and cross-border sale and purchase of vessels and flagging related matters.

Artificial Intelligence AND Trends In Patenting Upon an analysis of patent filing trends worldwide, it has been found that IBM leads the portfolio of AI patents where the focus of patents is natural language processing and the second topmost company is Microsoft, followed by companies such as Samsung, Toshiba and NEC ERA 60 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 61 LE Know the Law

rtificial Intelligence, a fuel for almost learning with life and medical sciences. These every industry today, has shown a combinations suggest areas to watch for rapid paradigm shift in technology over a developments in AI in the near future. period of time and has become a part A of our daily lives. From improvements Some of the functional applications of AI in weather forecasting, boosted crop include computer vision which is by far the yields, enhancement of detection of cancer, most popular with image recognition as its prediction of an epidemic to autonomous subset, and the other functional areas being vehicles to medical diagnosis and advanced natural language processing (NLP), and speech manufacturing, AI is almost everywhere. It has processing. Recent trends have shown a brought about a revolutionary effect in the maximum growth rate in patent filings in the global marketplace. area of computer vision in 2016.

Introduction Trend study

The term “artificial intelligence” is not The objective of this study is to showcase the something new, as it emerged in the 1950s, trends in AI technology in order to discover and innovators and researchers have filed which companies/key players and what patent applications for nearly 3,40,000 AI- institutions are leading AI development, and related inventions and published over 1.6 the target locations of future growth markets million scientific publications till date. (Source: in this domain. WIPO) Upon an analysis of patent filing trends It is to be understood that artificial intelligence worldwide, it has been found that IBM leads does not stand alone; rather it is a blend of the portfolio of AI patents where the focus of four primary techniques as depicted in the patents is natural language processing and the following diagram: second topmost company is Microsoft, followed by companies such as Samsung, Toshiba and NEC. It is a clear indication that these top five applicants own the maximum amount of data, as artificial intelligence is all about data.

In terms of top institutions/organizations, however, China ranks first in the list. 17 out of 20 Chinese organizations lead in AI patenting as well as 10 out of the top 20 in AI-related scientific publications. They are particularly strong in the emerging technique of deep learning. The topmost applicant is the Chinese Academy of Sciences (CAS) with over 2,500 patent families Source: educba.com and over 20,000 scientific papers published on AI. Moreover, CAS possesses the largest deep Out of the above said techniques, Machine learning portfolio as well. Learning has been the most applied technique in inventions going in for patenting. Nearly 70 Another study is the country comparison of per cent of inventions recite an AI technique, patent filings in the US, Europe and India. application or field working in correlation with one another. The commonly used As illustrated below, the number of patent combinations in patent applications are deep filings and patents granted in the last two learning with computer vision, computer vision years 2018-2019 has almost doubled in US with transportation, telecommunication and and EP where major filers such as IBM and security; ontology engineering with natural Microsoft have put across their applications language processing (NLP), and machine before respective patent offices. ERA 62 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 63 Know the Law

Ritika Ahuja Director

Jasbir Singh Managing Associate ERA 62 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 63 LE Know the Law

The above given trends show the extent to which focusing on developing new products based on this technology of AI is spreading worldwide new technology. and patent filing is being encouraged amongst individuals, startups, innovators, as a result of Conclusion performing more and more research using AI as the base and moving on to filing patents. There has been an enormous increase in filing of such applications in India, US and Europe which is estimated to grow further with the increase in demand for such technology.

Precisely, India needs to develop a clear set of guidelines for examining applications based on AI and related technologies. Although, US, EP have provided insights on prosecuting such applications while rejecting the applications, which created a discussion on examination of such applications.

Another update is that recently, USPTO has invited comments from different stakeholders on such technology-related prosecution process.

WIPO has initiated a project where the development The graph shows that in the last five years, there in such applications in different regions is being has been a 500% increase in filings in India and collected and over 250 stakeholders have provided hence, there is an immediate need to protect comments. the new generation of technology. India has been considered as an emerging market for new We have a long way to go for developing and areas and with the talent pool increasing rapidly, interpreting IP law in and around the technology the corporates and other research institutes are based on Artificial intelligence.

Author: Ritika Ahuja Designation: Director With degrees in computer science and electronics and telecommunications, Ritika specializes in patent prosecution, patent drafting and patent analysis in the ICT domain and provides legal opinions on various aspects such as infringement, FTO and patentability. She regularly appears before the Indian Patent Office and the Intellectual about Property Appellate Board. She is adept at handling voluminous patent portfolios of top telecom giants. The hyperactive ICT segment keeps her engaged in practicing the firm’s unpatented but most effective strategy of “smart prosecution”. She had worked for nearly 7 years in the field of patents prior to joining Anand and Anand and has also served as an the academic head of an Intellectual Property Rights Institute for two years in the past. author Author: Jasbir Singh Designation: Managing Associate Jasbir handles patent prosecution in the domains of telecom, software technology and electronics. With more than eight years of hands-on experience in the telecom industry, Jasbir is also proficient in drafting patent specifications. He is a registered patent agent and lawyer and regularly attends hearings at the Indian Patent office.

Although the initial decision in the case raised serious problems for the viability of these carve-outs to avoid patent infringement, after re-argument, it appears that the Court may avoid this issue by focusing more narrowly on the unique facts of this case

n February 23, 2021, the United States 5,760,069, relating to treatment of congestive Court of Appeals for the Federal Circuit heart failure (“CHF”). Teva filed a Paragraph IV heard re-argument in GSK v. Teva, a certification over the ’069 patent, and in 2007, O significant case that the pharmaceutical following expiration of the ’067 patent, launched industry and legal practitioners are following its generic. Teva’s label in 2007 stated that the because of its potential implications for “Section product was approved for treatment of left viii” labeling carve-outs for generic drugs (also ventricular dysfunction following myocardial known as “skinny labels”). Although the initial infarction (“LVD-MI”) and hypertension, but decision in the case raised serious problems for carved out the CHF indication under 21 U.S.C. § the viability of these carve-outs to avoid patent 355(j)(2)(A)(viii) (“Section viii”). At launch, Teva infringement, after re-argument, it appears that also announced that its generic drug was AB-rated the Court may avoid this issue by focusing more to Coreg® in the Orange Book despite this carve- narrowly on the unique facts of this case. out. In 2011, FDA required Teva to amend its label to introduce CHF as an approved indication. GSK v. Teva arises from litigation in the District of Delaware relating to GSK’s Coreg® product GSK filed for reissue of the ’069 patent, which issued (carvedilol). GSK listed two patents in the Orange as U.S. Patent No. RE 40,000, and in 2014, GSK sued Book, U.S. Patent No. 4,503,067, relating to Teva for infringement of the RE ’000 patent. GSK treatment of hypertension, and U.S. Patent No. alleged that Teva induced infringement of the ERA 66 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 67 LE ViewPoint

The District Court found that there was no evidence that any doctor was ever induced to infringe via prescription for CHF by Teva’s label, and that any infringement was not due to Teva, and granted judgment as a matter of law in March 2018.

The Federal Circuit will likely issue its On appeal, the United States Court of Appeals for the Federal Circuit initially reversed this highly anticipated opinion in this case in decision in October 2020, in a split decision with Chief Judge Prost dissenting. The majority 2021. Depending on the reasoning set pointed to Teva’s press releases and marketing forth in the decision, the issues relating communications as sufficient circumstantial evidence of induced infringement. In particular, to Section VIII carve-outs may again the majority focused on Teva’s advertisement of its generic as AB-rated, which it explained would be raised in a petition for rehearing en allow physicians to infer that Teva’s generic was banc or in a petition for certiorari at approved for all of the same uses as Coreg®, including CHF. Chief Judge Prost, in her dissent, the U.S. Supreme Court. wrote that the majority’s holding essentially nullified the practice of “skinny label” launches that are permitted under the Hatch-Waxman Amendments.

Following the decision, Teva petitioned for RE’000 patent both before and after 2011 based rehearing and rehearing en banc. Industry groups, on advertising and on the literal label language for public interest groups, and members of Congress treatment of LVD-MI, which it alleged infringed. filed amicus curiae briefs both in support of and in Teva argued that it had carved out the infringing opposition to rehearing the case. On February 9, CHF indication, and that it was compelled by FDA to 2021, the Court granted the petition and ordered add CHF to its label, so there was no evidence that oral argument focused on the issue of whether the Teva caused physicians to prescribe its product for jury had sufficient evidence of induced infringement infringing uses. prior to 2011.

A jury agreed with GSK in June 2017, awarding $235 At oral argument on February 23, both the Court million in damages. Teva moved for judgment as a and GSK sought to focus the case on evidence matter of law, arguing that there was no evidence other than the AB-rating and advertisement of that it caused any infringement by physicians before or rating. GSK’s counsel focused on its argument that after the label amendment. GSK argued that Teva’s because LVD-MI was an infringing use, Teva did not label, advertisements, and other materials were actually carve out all patented uses of the RE’000 circumstantial evidence of induced infringement. patent. The Court questioned this, focusing on ERA 68 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 69 ViewPoint

an Orange Book use-code that only included CHF. GSK’s counsel nevertheless did not concede that the AB-rating, the press releases, and the partial label itself were all evidence of inducement of infringement for treatment CHF.

Teva’s counsel began by focusing on Hatch- Waxman’s policy of allowing the public to use drugs for unpatented uses, but was questioned by Judge Newman about whether a finding in its favor might deter the research that leads to discovery of newer uses for old drugs. Teva’s counsel argued in response that this was not a concern because patent protection would be available if a generic did actually induce infringement of patented uses, which Teva argued it did not do here. Teva’s argument ultimately was focused on whether GSK had presented the jury with sufficient expert testimony that LVD-MI infringed, and whether Teva presented any contrary evidence. Teva’s counsel pointed to testimony from its own expert, and also Brian H. Gold argued that the Court could decide as a matter Associate of law whether the label induced infringing uses. Teva argued that if this was a non-infringing use, then the remaining evidence could not support infringement.

Based upon the questions at oral argument, it appears that the Court will first focus on whether GSK presented sufficient evidence that LVD-MI was an infringing use, and thus whether the label induced physicians to infringe via this use. If the Court holds that there was not sufficient evidence, it may once again have to address whether there is evidence of inducing infringement by prescription for CHF based on Teva’s press releases and marketing in spite of the Section viii carve-out. In this case, the decision would have significant

Grant S. Shackelford Associate ERA 68 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 69 LE ViewPoint

implications for generic drug companies and their on the reasoning set forth in the decision, the ability to satisfy FDA law requirements to get issues relating to Section viii carve-outs may again approval for unpatented uses without infringing be raised in a petition for rehearing en banc or in patents for carved-out, patented uses. a petition for certiorari at the U.S. Supreme Court. One thing is clear: both branded and generic drug The Federal Circuit will likely issue its highly- companies have a vested interest in the outcome anticipated opinion in this case in 2021. Depending of GSK v. Teva.

Author: Brian Gold Designation: Associate Brian represents clients on a breadth of intellectual property matters, with an emphasis on patent litigation. He has represented clients in disputes before the International Trade Commission, Federal Circuit and U.S. District Courts. Brian’s work spans a broad spectrum of technologies, including cathode materials for lithium-ion batteries, RFID technology used in electronic toll collection, networking devices, digital two-way radios, residential HVAC equipment and cellular technology. As part of his litigation practice, Brian has experience preparing pleadings, drafting motions, analyzing and preparing contentions, working with experts, preparing written discovery requests and responses, taking and about defending depositions, summary judgment briefing, trial, post-trial briefing and appellate briefing. the Author: Grant S. Shackelford Designation: Associate author Grant represents clients on a breadth of intellectual property matters, with an emphasis on patent litigation. He has extensive experience in representing clients in disputes before federal district courts, the Federal Circuit and inter partes matters before the USPTO. Grant’s litigation work has spanned a broad spectrum of technologies, with a focus on pharmaceutical cases under the Hatch-Waxman Act. As part of his litigation practice, Grant has extensive experience preparing pleadings, drafting motions, analyzing and preparing contentions, working with experts, preparing written discovery requests and responses, taking and defending depositions, summary judgment briefing and appellate briefing. He is also experienced in all phases of inter partes review proceedings. In addition to litigation, Grant regularly engages in client counseling, preparing patent validity and infringement opinions as well as opinions on patentability and freedom-to-operate.

LE Disclaimer – The views expressed in this article are the personal views of the authors and are purely informative in nature. ERA 70 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 71 ViewPoint 68%6&5,%(72 $ 5 ( /(XXX*MFHBMFSBPOMJO$FDPN/

6XEVFULEH1RZ

'$,/<1HZVOHWWHU$QG/HJDO8SGDWHV,Q

'LJLWDOPDJD]LQHLQ<285LQER[

Re-recognitionRe-recognition

You should be congratulated if you live in ofof aLaw countryLaw havingTaiwan, a better writes situation the author than ERA 72 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 73 LE ViewPoint

nder Merriam-Webster there are six entries political system is to improve the life and to chase for “law”, the first of which is normally freedom, democracy and justice. understood in the law industry all over the Uworld and is the topic to be discussed here. The current ruling party, Democratic Progress Specifically, the first entry includes 5 items, the first Party (DPP), was fostered to grow by the past two of which each have three prongs, as follows: ruling party, Kuo-Ming Tang Party (KMT) which was defeated by the Communist Party and fled from a(1): a binding custom or practice of a community: Mainland China to Taiwan in 1949. DPP inter alia a rule of conduct or action prescribed or (1) used violence to stop KMT from implementing formally recognized as binding or enforced kinds of policies and criticized KMT’s inabilities, (2) by a controlling authority gathered together all opposite entities, e.g. pro- environment groups by promising to follow their (2): the whole body of such customs, practices, proposals after getting the ruling power… After or rules where the courts exist to uphold, winning the last election, DPP inter alia (A) tried interpret, and apply the law all efforts in smothering KMT in order that KMT can no more win the future elections, (B) closed (3): COMMON LAW an opposite TV station, (C) threatened all media to b (1): the control brought about by the existence get punished or no more public advertisements if or enforcement of such law unfriendly to them, (D) established network troops (2): the action of laws considered as a means to attack and caused policemen to visit selected of redressing wrongs influential persons expressing unfavorable (3): the agency of or an agent of established opinions to them, (E) shared national budgets only with those who support DPP or are their friends, c: a rule or order that it is advisable or obligatory (F) either disregards or ignores any law which to observe illegalizes their decisions or policies…

d: something compatible with or enforceable by From the above incomplete passages, we can established law easily find the following issues: if a government owning the state power often does wrongs but e: CONTROL, AUTHORITY straightforwardly ignores their illegal nature, what From the above, it appears to us that a law does the law mean, where do people find the is or should be generally a good custom or authority to enforce the law, how may people seek practice or authority for redressing wrongs. the law or justice, why should we bear the law to be defined in this way, when can we get the law to In Wikipedia, “Law is a system of rules created timely reflect the justice…? and enforced through social or governmental institutions to regulate behavior, with its precise DPP is an expert in election, creating public definition a matter of longstanding debate. It opinion, forging how great they have made small has been variously described as a science and the achievements and disguising how innocent they art of justice.” From this, although the precise are when there is a disaster or mishap they directly definition for law may be uneasy, it is apparent to or indirectly cultivated. If you are lucky enough to know that the law relates to science and/or justice. live in a country not having the above issues and if Although it may be hard again to precisely define Taiwan is too small to draw your attention to the what science and justice respectively are, it should above effects, you may feel helpful in immersing never be difficult to distinguish between wrongs yourself into the same atmosphere when this and justice/science for a layman or especially a article is authored, if you think of the case where well-educated political person. Donald Trump led the US.

If you find no loophole in the above deduction, self- In the atmosphere, you want to know what the law believe in leading a fully rational or logical life and means, where to find the real or effective laws, how regard laws having their supremacy in governing to get laws valid to all including the ruler or ruling better lives, you may feel painful for living in the party, when your country can eventually conform current world after you know the political realities to rule of law, why could the world, the country or happening at least in Taiwan if you believe that a the law be so shaped… ERA 74 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 75 ViewPoint

In such society, the laws are either effective only when they favor DPP, but are ineffective when unfavorable, or interpreted by DPP what the laws actually mean. In such a situation, does anyone feel there is a law in Taiwan? Certainly, if a law will not jeopardize the ruling power or potentiality of DPP, that law is a law. Any other law unconformable to DPP’s ruling interests, that law may not be a law. For a foreigner, this situation may not be a problem. It may be imaginable that it is a great hardship for a person not supporting DPP or really fond of rule of law because what he thinks, speaks, runs a business… may or will violate the law as defined by DPP.

Is the above situation occurring only in Taiwan? How should the nationals do if their country has the above situation? You should be congratulated if you live in a country having a better situation. If you like logical reasoning and feel that your country may have a slight extent of the above atmosphere, you might feel annoyed or excited upon digging this question into a deeper level. Do you think C. F. Tsai there is an answer for this annoyance? Or, would FOUNDER you rather not bother yourself to be trapped in this boring question? If there is a person heavily plagued by this queer issue, I may like to squeeze my life of insufficient sleeping hours to write another article aggravating or alleviating the issue. March 31, 2021 in Taipei.

Author: C. F. Tsai about Designation: Founder While I keeps the accidental historical chance to be the first Taiwan patent practitioner both having technological and law backgrounds and qualified as a local attorney-at-law, and the sole practitioner passing the Taiwan bar (or the high) examinations both in technological and law fields, I extensively got involved from 1972 in works related to mechanical, electric, electronic, civil engineering, chemical, semiconductor and medical fields in the patent industry after earning marine engineering bachelor from National Chiao Tung University. I finished my law degree from author National Taiwan University, and master law degree from Soo Chow University. I founded Deep & Far attorneys-at- law in 1992. I read books authored thousands of years ago every day.

LE Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature. ERA 74 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 75 LE Take on Board

The PDPA adopts similar principles to that of the EU General Data Protection Regulation (GDPR) which allows for comprehensive protection of data subjects’ rights… ERA 76 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 77 Take on Board Solidifying thailand Data Protection in ERA 76 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 77 LE Take on Board

affected sectors, causing the government to deem implementing a new law unviable during this time. The postponement of the fully effective date of the PDPA to 1st June 2021 was a welcome one, as it was able to alleviate the impact on the public and private sectors as well as the general public.

Perhaps the most important aspect for data subjects is that the new law will give them the right to erase, object, rectify and access their personal data upon request. Not only does this protect the data subjects, but it also ensures accuracy of information and the potential to prevent being inundated by unwanted third party marketing messages. It also gives businesses and organizations a clearer understanding of how to best handle consumers’ personal data.

The PDPA adopts similar principles to that of the EU General Data Protection Regulation (GDPR) Dhiraphol Suwanprateep which allows for comprehensive protection of Partner data subjects’ rights, whilst at the same time being beneficial for international businesses as they can implement comparable security measures across multiple jurisdictions. This should be of particular relevance to the integration of the EU GDPR’s concepts for implementing the ASEAN Data Management Framework (DMF) and Model Contractual Clauses (MCCs) for cross-border data transfers, as the Personal Data Protection Committee (PDPC) of Thailand, who will act as the competent authority under the PDPA, will likely ack in May 2019, the Thai government follow the DMF and MCCs with the same concepts announced a new data privacy law intended of the GDPR to assist in the interoperability to raise the standards of data privacy to between ASEAN Member States. those of its international counterparts. BPersonal data has become increasingly valuable PDPA requirements that have been influenced by in the digital age, which has piqued the interest the GDPR include sensitive personal data albeit of all manner of businesses in gathering personal with more restrictive legal exemptions under information. This has led the government to the PDPA, lawfulness of processing, consent recognize the importance of protecting the rights requirements, privacy notices, and the rights of of their citizens through law, thus the need to data subjects with a few specific details that will efficiently protect personal data and put in place be tailored to business operations in Thailand. It effective remedial measures for data subjects is also worth noting that, while the requirements whose data protection rights are violated. for Data Protection Officers (DPO), data breach notifications and the cross-border transfer of personal data will follow the provisions set out The Personal Data Protection Act B.E. 2562 (2019), or by the GDPR, there will be supplementary rules, PDPA for short, was first published in the Royal Thai qualifications and/or criteria added by the PDPC, Government Gazette and was originally scheduled although they have yet to be released. to come into effect on 27 May 2020. However, the COVID-19 outbreak and its effects on the economy As the PDPA is not yet effective, there are currently and society were cited as major obstacles for all no sub-regulations or official guidelines relevant ERA 78 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 79 Take on Board

to the cross-border transfer of personal data, ASEAN member states, especially where digital meaning adequate data protection standards are infrastructures and digital platforms that would lacking in this area. As this is a significant part of typically transfer large amounts of personal data data protection and considering that the DMF and from several locations are concerned. MCCs mostly have the same principles as the PDPA, the relevant sub-regulations and guidelines that Conversely, MCCs may create legal binding will be established under the PDPA would likely agreements. Therefore, it would help organizations be tailored to the DMF and MCCs’ concepts. The and businesses to create standard contractual only likely difference would be with certain parts clauses that are in line with other ASEAN Member that are not consistent between the PDPA and States when carrying out the activities of the cross- GDPR, for example, the definition of personal data border transfer of personal data. Furthermore, under the PDPA also includes the personal data of organizations and businesses are able to amend the deceased persons. clauses to better suit their needs, as long as they do not contradict the MCCs and any applicable data It is of utmost importance that organizations protection laws, and are also free to provide the and businesses from all industries that handle commercial terms and conditions upon a mutual personal data in any capacity in Thailand are agreement between all parties involved. prepared to comply with the PDPA when it comes into full effect on 1 June 2021. This can prove Although the PDPA was originally announced in the challenging considering sub-regulations have yet Government Gazette on 27 May 2019, no official to be announced, however, for those organizations guidance has been issued under the PDPA at the wishing to get a headstart, the DMF and MCCs time of writing. So far, only one sub-regulation has may well be able to assist in mitigating the risks been issued by the Ministry of Digital Economy for processing personal data, which would help and Society (MDES), which provides guidance save time and internal resources when applying on the security measures that must be taken measures for the compliance of the PDPA. to safeguard personal data during the current postponement period of the PDPA. Also, the Businesses and organizations can be safe in the competent authority under the PDPA, namely knowledge that the DMF and MCCs would not the PDPC, has not yet been officially established. create any negative impact towards those who are However, more comprehensive sub-regulations subjected to the PDPA. As the DMF only provides are due to be issued on 27th May 2021 and once the best practices which have no legal binding, it new law comes into effect on 1st June 2021, it is to would be beneficial to everyone involved to adapt be expected that the establishment of the PDPC their processes and procedures for the cross- will also be announced. border transfer of personal data to fit with other

Author: Dhiraphol Suwanprateep about Designation: Partner

Dhiraphol Suwanprateep is Head of the Technology, Media and Telecoms Industry Group and Co-Head of the Intellectual Property and Technology Practice Group at Baker McKenzie in Bangkok. Dhiraphol has a vast amount the of experience in advising clients on government initiatives, particularly Thailand’s Digital Economy Plan and has conducted substantial work with an array of businesses in implementing Thailand’s new Data Privacy law. author Dhiraphol’s expertise in areas such as telecommunications law, computer crime and data privacy, online business operations and cybersecurity has made him a highly coveted contributor for a variety of leading publications.

LE Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature. ERA 78 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 79 LE Insights ERA 80 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 81 Insights ARBITRATION IN THAILAND TAKES A BIG STEP BACKWARDS Foreign Representatives Subject to Harsh Criminal Penalties

As the vast majority of disputes subject to arbitration in Thailand are governed by Thai laws, foreign representatives, advocates and lawyers have been effectively shut out of the system ERA 80 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 81 LE Insights

are nevertheless prohibited under immigration and labor laws from working in Thailand as duly appointed party representatives.

Black’s Law Dictionary defined the Latin term, “mutatis mutandis”, as “all necessary changes RE: “Arbitration in Thailand Takes a Giant having been made” or “with the necessary Leap Forward”; Legal Era (October 2019) changes”. Thus, in order for the 2019 amendments erhaps we spoke too soon when the Thai to Thailand’s Arbitration Act to have their Government amended the Arbitration Act. intended effect, all necessary changes should be made to allow foreign representatives (advocates In April 2019, Thailand’s Arbitration Act and lawyers) to secure their certificates, visas, Pwas amended to welcome the participation of and work permits – in exactly the same manner as foreign citizens as arbitrators and advocates foreign arbitrators. in arbitration proceedings conducted by the Thai Arbitration Institute (“TAI”) and the Thailand’s Ministry of Labor apparently disagrees. Thailand Arbitration Center (“THAC”). The An intense interagency dispute has arisen between amendments established a detailed procedure for the Ministry of Justice (which administers the a foreign arbitrator to obtain a certificate, visa, Arbitration Act) and the Ministry of Labor (which and work permit for the duration of the arbitration regulates labor and employment). The Ministry proceedings. of Labor has long published a list of “Prohibited Occupations for Foreigners.” In April 2020 (one As stated in the 2019 amendments, the same year after the Arbitration Act was amended), procedure would apply “mutatis mutandis” to the Ministry of Labor issued a notification foreign representatives (often foreign advocates under the curiously named “Emergency Decree and foreign lawyers): on Foreign Working Management” to expand the list of prohibited occupations. Section 23/6. For arbitration proceedings in the Kingdom, the parties to the dispute may The notification adopted broad new restrictions appoint one or several foreigners to be their on foreign citizens engaged in certain professional representatives to act on their behalf, and the services, including legal and accounting services. provisions of this Chapter shall apply to the said Under the “Emergency Decree”, arbitration services representatives mutatis mutandis. are defined as legal services to be provided solely by Thai citizens (though not necessarily by licensed Thai Arbitration Act (No. 2); (B.E. 2562; 2019) attorneys) with two notable exceptions: (1) services provided by an arbitrator; and (2) services provided in As it turned out, despite the legislative intent of relation to cases which are not governed by Thai law. the 2019 amendment, foreign representatives are still prohibited from engaging in arbitration work The Ministry of Labor appears to be more concerned if the underlying dispute is governed by the laws with nationality than the quality of legal services. of the Kingdom of Thailand. As the vast majority After all, a license to practice law is not required of disputes subject to arbitration in Thailand are in Thailand to represent a party in arbitration. governed by Thai laws, foreign representatives, Under Thailand’s “Lawyers Act” (B.E. 2528; 1985), advocates and lawyers have been effectively a license to practice law is only required “to appear shut out of the system. And while a party may in court, prepare a plaint or answer, appellate plaint appoint “one or several foreigners to be their or appellate answer for both Court of Appeal and representatives”, such foreign representatives the Supreme Court, motion, petition or statements ERA 82 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 83 Insights

incidental to a court proceeding on behalf of another person…”

Thus, any Thai citizen (whether lawyer or layman) may be appointed as a party representative in arbitration – regardless of the law governing the dispute or the representatives knowledge thereof. However, a foreign citizen may only be appointed as a party representative in relation to disputes which are not governed by Thai law.

The revised notification adopted even more onerous restrictions against foreign accounting (and auditing) professionals, who are broadly prohibited from performing even secondary or tertiary support functions (including accounting education, consulting, development, training, and use of computers, software, and electronic devices).

Any foreign person – including any foreign Daniel Chernov lawyer, accountant, or auditor -- who works Managing Partner in violation of the “Emergency Decree on Foreign Working Management” is subject to imprisonment for a term not exceeding five years or a fine of two thousand Baht (or both).

Foreign professionals providing such controversial services (even with a valid certificate, visa and work permit in hand) should expect to receive an unannounced visit from Officer Friendly to inspect visas and work permits, to interrogate employees, Any Thai citizen (whether lawyer or and to otherwise ensure that the foreign professional is not providing services which are layman) may be appointed as a party restricted for Thai citizens. representative in arbitration – regardless of the law governing the dispute or the Few foreign professionals are eager to be imprisoned in Thailand for work permit violations. representative’s knowledge thereof. (Indeed, some Thai jails are already overcrowded However, a foreign citizen may only be with rising numbers of student protesters and appointed as a party representative political prisoners. One can only imagine the potential synergies among imprisoned students in relation to disputes which are not and foreign legal and accounting professionals governed by Thai law. sharing the same jail cells. The possibilities are endless…).

Not surprisingly, several leading international arbitration practitioners have already relocated to Singapore, apparently preferring to work under the international-standard rules of the Singapore International Arbitration Centre (SIAC). The final outcome of the ongoing interagency dispute between the Ministry of Justice and ERA 82 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 83 LE Insights

Ministry of Labor with respect to the participation could not appear alone (solo) before arbitral of foreign lawyers and advocates in arbitration tribunals in Thailand due to the simple reason :,7+ remains to be seen, though the Ministry of Labor that the Arbitration Act (Section 25, Paragraph has certainly won the latest battle. For the time 2) requires that evidence be introduced under 7+( being, given Thailand’s harsh criminal penalties, the Code of Civil Procedure. Thus, foreign 287 2/' arbitration advocacy is the exclusive domain of practitioners have always appeared together a modest number of bilingual or multilingual Thai (ab ipsis) with experienced Thai litigators in :,7+ arbitration practitioners (other than disputes cooperative multicultural legal teams. governed by foreign laws, as noted above). ,1 7+( In the author’s humble opinion, the Thai legal industry 1(: The multicultural teams of local and foreign has little to fear from a handful of experienced practitioners -- which had previously experienced foreign practitioners. Foreign competition and so much success before arbitral tribunals in multicultural cooperation can only improve the quality Thailand -- are effectively prohibited for the of professional legal services in the long run. foreseeable future (praevisum futurum). Apparently, when it comes to foreign lawyers and As a practical matter, foreign practitioners representatives, mutatis non mutandis est. ZZZOHJDOHUDRQOLQHFRP

Author: Daniel Chernov about Designation: Managing Partner Daniel was admitted to the District of Columbia Bar Association in Washington, D.C. after graduating from Georgetown University Law Center in 1986. Subsequently, over the following 30 years, Daniel gained extensive the international legal experience in the United States (Washington, D.C.), Japan (Tokyo), Vietnam (Ho Chi Minh City) and Thailand (Bangkok). While initially focusing his legal practice on foreign direct investment in Asia, Daniel author developed substantial expertise in resolving international business conflicts in multicultural environments through civil litigation and alternative dispute resolution (arbitration, mediation, and negotiation).

LE Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature. $ 5 ( ERA 84 April 2021 | LEGAL ERA | www.legaleraonline.com /(*$/0(',$*5283 www.legaleraonline.com | LEGAL | April 2021 85 /#:5)&1&01-&(*'035)&1&01-&$0'/5)&1&01-& Insights

:,7+ 2877+( 2/' :,7+ ,1 7+( 1(:

ZZZOHJDOHUDRQOLQHFRP $ 5 ( ERA 84 April 2021 | LEGAL ERA | www.legaleraonline.com /(*$/0(',$*5283 www.legaleraonline.com | LEGAL | April 2021 85 /#:5)&1&01-&(*'035)&1&01-&$0'/5)&1&01-& LE Zoom In M&A DEALS

TECHNOLOGY SECTOR IS THE DRIVER ERA 86 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 87 Zoom In

The secret of “change is to focus all of your energy, not on fighting the old, but on building the new.” - Socrates ERA 86 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 87 LE Zoom In

Statistics for the mergers and acquisitions (M&A) activity in the year 2020 showed technology M&A spending was the highest since the dot-com collapse as the total value of technology and telecom transactions touched USD 600 billion

Introduction to digital media solutions, online gaming, cloud- based solutions and online marketplaces. This is The year 2020 was marked by an economic slowdown also driven by a change in the consumer behavior with the onset of the pandemic. However, the where consumers now prefer to eat, shop, socialize statistics for the mergers and acquisitions (M&A) and entertain themselves from within their homes activity in the year 2020 showed technology making traditional options less relevant. M&A spending was the highest since the dot- com collapse as the total value of technology and Legal issues in technology transactions telecom transactions touched USD 600 billion1. This surge in transactions in the technology industry Bird & Bird’s long-term strategic focus has been on can be seen as an acknowledgment of the role industries that are being disrupted by technology. that technology will play in the post-COVID era and In this article, we will discuss the key legal issues in companies have rushed to bank on any opportunity technology M&A transactions at each stage. This that may drive them to the new virtual future. article focuses on particularities and processes in technology transactions without any emphasis on We highlight some of the main players among a specific jurisdiction. the 2020 buyers in the technology industry from Ciesco’s and Bird & Bird’s ‘2020 Global M&A Review A. Deal structuring and 2021 Outlook’ report (the Report), which you can find here. The acquisition by Salesforce of Most of the technology deals are private deals and Slack Technologies for USD 27.7 billion in 2020 is usually involve one or more VC or PE firms. These the largest deal in the cloud SaaS industry to date. firms generally require set up of a new holding Twitter and Cognizant acquired 7 companies each company structure for deal implementation. in 2020. It was a slow year for tech giants like Determination of the jurisdiction and the corporate Facebook and Alphabet (Google’s parent company) form of the holding company is critical to the deal with fewer acquisitions largely due to the anti-trust and is based on factors such as tax efficiency, and anti-competition law regulatory pressures they flexibility of the legal framework to organize the have been facing for ‘monopolizing’ their relevant governance structure of the company, acceptability sectors. Other notable transactions in the industry to the broader investor community to facilitate were Verizon’s acquisition of BlueJeans, a cloud- subsequent funding rounds, the possibility to based videoconferencing and events platform and include differential and preferential shareholder Zoom’s acquisition of Keybase for its end-to-end rights in the constitutive documentation and encryption expertise. We continue to see a number facilitation of an exit or an eventual public listing. of M&A transactions in Europe for our Indian headquartered technology sector clients. It is also important to consider if the transaction will conclude as an asset or share deal and how As stated in the Report, the focus of the active the price will be determined (based on last technology buyers has shifted from the data and audited accounts i.e. a locked box approach or content production focused companies in 2019 a completion accounts mechanism whereunder

1 451 Research’s M&A KnowledgeBase ERA 88 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 89 Zoom In

the enterprise value will be adjusted based on completion accounts prepared by the buyer post acquisition).

B. Due diligence

The next step is to identify the assets on which due diligence should be performed. In a technology company, intellectual property (IP) is invariably the primary asset being purchased. The areas of focus for IP due diligence involve verification of ownership and control of IP assets, strength and value of IP assets, liability for infringement, if any and assignability. Depending on the nature of the technology being used, there may also be concerns regarding data protection and data may be an important asset in a business being acquired. With implementation of the General Data Protection Regulation (GDPR) in the European Union and the United Kingdom and increased risk of financial Simon Fielder Partner

Technology focused deals are likely to be the frontrunners. With the ‘new normal’ being more technology driven, aggressive competition among potential buyers/investors and price competitiveness is going to be the new future in

technology M&A deals. Surabhi Singhi Senior Associate penalties for a failure to comply with the relevant rules and with further data regulation expected in the near future in many countries, buyers are asking more questions and increasingly expecting data privacy compliance, particularly where the target is a data heavy business.

Due diligence also needs to establish if any previous security breaches may result in continuing liabilities ERA 88 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 89 LE Zoom In

whether from a compliance perspective or from the arrangements with the third party who owns the perspective of potential litigation. Further, some underlying IP. data sources are critical to a company’s business and are often subject to license agreements. As C. Transactional documentation part of the due diligence checks, it is important to identify potentially problematic terms and those As part of the transactional documentation, it is which deviate from industry norms and advise on key that necessary and adequate warranties and the associated risks. indemnities must be negotiated. The common grounds of discussion revolve around the When conducting due diligence exercises, aggregate liability cap of the seller/founder under especially in start-ups in the technology sector, the warranties and indemnities. The most common we often notice that the target does not own the warranty claims arise in relation to, financial core IP assets – in some cases, the assets might be statements, IP, compliance with law and material owned by the founders in their individual capacity contracts. Due to the volatile and increasingly or by third parties without adequate / industry evolving environment in the technology sector, acceptable licensing arrangements in place; in we are finding the standard warranty catalog to other cases, they might be owned by developers be inadequate in technology transactions and it is who worked for the company on a consultancy important for the warranty catalog to be adapted basis. We recently advised a venture capital to the nature of the target’s business and core firm on investment in a company developing assets. Governing law and dispute resolution case management software for lawyers to put provisions will be important points to consider in place necessary IP assignment arrangements in the context of transaction documentation. We between the target and its affiliate in India and have recently worked on the disposal of an Indian simultaneously advised on protection of the based social games developer to a European listed target’s IP from the development work being acquirer where English law was chosen as the undertaken by its affiliate’s employees in India. compromise between the parties. We have seen a As part of due diligence, such risks need to be number of deals where parties have chosen English identified and resolved prior to completion by law along with an appropriate arbitration provision requiring the company to put in place appropriate to govern transaction documents even where the intellectual property assignment or licensing buyer and seller are not located in the UK, as they ERA 90 April 2021 | LEGAL ERA | www.legaleraonline.com www.legaleraonline.com | LEGAL | April 2021 91 Zoom In

derive comfort from the approach under English transitional services/management agreements (as law to enforcement of contractual terms and the founders or the existing management are usually amount of legal precedent available to assist in the key in technology companies) and consider new interpretation of contract provisions. internal policies to make sure that the company’s compliance levels fit into the buyer/investor Specialist insurance is increasingly available that group’s compliance structure. may provide cover against breach of general warranties and indemnities and even specific As enactment of data privacy/protection laws is intellectual infringements. When advising the seller imminent in India and several other countries, multi- on a recent M&A transaction in the UK, the buyer national companies need to ensure that their global uncovered a concern that the target company compliance programs follow GDPR requirements might be infringing a third party’s patent. We were as well as local laws. We recently advised a Spanish able to assist the seller in obtaining both general fund client on investment in the tech transmission warranty and indemnity insurance and specific business based in the Netherlands, UAE and India, intellectual property infringement insurance, which especially in relation to the GDPR compliance of allowed the seller to achieve a “clean exit” while the target group and policies to ensure compliance still offering the buyer a level of desired protection post acquisition. through insurance. Future outlook D. Post closing actions/integration As the Report points out, technology focused While warranties and/or indemnities protect the companies are sitting on cash piles and are keen buyer from historical risks, any risks or gaps identified to make further investments in 2021. Technology during the due diligence should be remedied to focused deals are likely to be frontrunners. With protect from the risk of any future liability (for the ‘new normal’ being more technology driven, example, fixing IP ownership issues or putting aggressive competition among potential buyers/ in place adequate data licensing arrangements). investors and price competitiveness is going to be It is also necessary to plan and put in place any the new future in technology M&A deals.

Author: Simon Fielder Designation: Partner I am a partner in our London office Corporate Group. I specialize in corporate transactional work covering international M&A, joint ventures, equity and debt financings and listings on the UK stock markets. I frequently work with overseas companies looking to expand their businesses or raise finance in Europe. I have been a director and about advisory board member of a number of digital media and technology companies listed in the UK and overseas.

the Author: Surabhi Singhi author Designation: Senior Associate I’m a senior associate in our Corporate Group, based in the UAE, where I work as a lead counsel in M&A transactions. I also specialize in provision of employment law solutions to our clients. Having qualified as a lawyer in 2009, I’ve worked with clients in sectors including aviation, retail and consumer, energy, infrastructure, financial services, healthcare, telecommunications and technology. I advise on regional and cross-border M&As, joint ventures, spin- offs, restructurings, IPOs, business establishment, as well as regulatory matters.