Legal & Industry Updates - October 2020
SPECIAL EVENTS
Knowledge Session Conducted by Ivy Law on the New Labour Codes, October 30, 2020
Ivy Law conducted a knowledge session on the new labour codes, consolidating 29 labour laws. Kaveri Kumar, Founder and Head of Corporate Practice was the key note speaker and focused on the flexibility provided to employers under the provisions of the new codes. The session emphasised on the obligations of employer’s basis the new changes enforced by the codes. The focus of the session was also on the impact of the new labour codes on business operations, compliance requirements of employers and rights of workers.
Webinar on Termination of Commercial Contracts - The Legal Landscape, Drafting a Termination Clause and Termination Notice, October 4, 2020
The team at Ivy Law participated in a webinar on the ‘Termination of Commercial Contracts - The Legal Landscape, Drafting a Termination Clause and Termination Notice’, conducted by the Virtual Lawyer, focusing on the ways to terminate contracts. The webinar gave insights on legal provisions and amendments of 2018 under the Specific Relief Act, 1963 which govern termination and enforceability of contracts. Additionally, the discussion also extended to the types of termination clauses and its drafting. The importance of termination notice was also emphasized.
LEGAL & INDUSTRY UPDATES
Amazon Approaches Singapore Arbitration Centre to Halt Reliance-Future Deal (source 1, source 2)
As reported by Economic Times, Amazon has approached the Singapore International Arbitration Centre (SIAC) to halt Reliance Industries' deal to acquire Future Group's retail assets. Amazon claimed, Future Group breached their contract under which Amazon took an indirect stake in Future group’s retail business.Amazon has also sent a legal notice to Future Coupon, the promoter entity where it bought 49% stake, claiming that the contract stipulated that Future Coupon cannot sell any shares to Reliance or any other competitor and that Amazon had the right of first refusal, restricting sale of any stake or asset to a third party. Amazon had raised objections to Future Coupon, for not seeking Amzon’s consent when Amazon had the first right for any stake sale. Further, in a recent development it is reported that SIAC has passed an interim order granted by the emergency arbitrator requiring Future Group to halt its plans of selling its retail business to Reliance Group and await the final judgment on the plea filed by Amazon. The interim order is valid for 90 days and SIAC will issue its final verdict in this period.
Amazon & Flipkart in Receipt of Notices for not Displaying Country of Origin Details (source)
As reported by Economic Times, the government has issued notices to Amazon and Flipkart, asking them to explain within a prescribed timeline, why no action should be taken against them for not displaying the country of origin on products they offer. The notice stated that non-display of the country of origin on products, violates Section 18 (1) (Declarations on pre-packaged commodities) of the Legal Metrology Act 2009, read with Rule6(10) of the Legal Metrology (Packaged Commodity) Rules 2011, which is punishable under Section 36 (1) (Penalty for selling, etc., of non-standard packages) of the Legal Metrology Act, 2009. It was clarified that in the marketplace model of ecommerce, the responsibility for the accuracy of declarations lies with the manufacturer, seller, dealer or importer of the goods. The online platforms have been asked to provide the names of the owns, partners, directors, and people responsible for the conduct of the business.
Delhi High Court's Prima Facie Opinion of DELHIVERY: Phonetically Generic Word Cannot be Registered (source)
As held by the Hon’ble Delhi High Court in the matter of Delhivery Private Limited. v. Treasure Vase Ventures Private Limited., a prima facie opinion has been formed by the court that the mark ‘DELHIVERY’ was a phonetically generic word and thus cannot be registered so as to seek the benefit of statutory rights. Delhivery Private Ltd (Plaintiff) had moved the High Court against Treasure Vase Ventures Private Limited (Defendant), alleging infringement of its trademark ‘DELHIVERY’. Analysing the merits of the case, the Court observed that the Plaintiff's attempt was to read ‘DELHIVERY’ as ‘DELHI’ and ‘VERY’, thus asserting that the mark was different from the generic word ‘delivery’. The Court stated, when the claim is that ‘DELIVER-E’ is deceptively similar to ‘DELHIVERY’, the Plaintiff was relating its mark to the generic word ‘delivery'. Remarking that ‘DELHIVERY’, when pronounced in a routine manner, meant ‘delivery’, the Court opined that ‘DELHIVERY’ was phonetically a generic word. The Court also rejected the Plaintiff's contention that since the Defendant had itself applied for registration of the mark ‘DELIVER-E’, it could not plead that the mark ‘DELHIVERY’ was a descriptive word. In view of this, the Court vacated the ex-parte order of interim injunction against the Defendant.
Collective Dominance & its Absence in Indian Competition Law (source)
As reported by Economic Times, the inclusion of Xiaomi India and TCL India, in an antitrust complaint against Google’s alleged abuse of dominance in the smart TV operating system (OS) market has brought to the fore questions of collective dominance and its absence in Indian competition law.The two smart TV manufacturers have been made party to the case since they are seen as restricting the entry of other OS developers into the market by voluntarily agreeing to anticompetitive clauses in Google’s terms of service.Collective dominance refers to a market in which two or more independent players, having economic links, jointly hold a superior market position relative to other players in that market.Since such cases are untenable as per existing laws, they remain unanalyzed, leaving a gap in the law.
Government Sets Up a Panel of Secretaries to Streamline Telecom Spectrum Allocation (source)
As reported by Economic Times, the government has constituted a panel of secretaries to streamline the spectrum allocation process and examine the possibility of drawing up an annual calendar for auction of airwaves that will give telcos a clear road map of the quantum as well as the frequency of spectrum on offer for commercial use.Besides the cabinet secretary, the panel comprises of the secretaries of home, defence, railways, telecom, I&B and department of space.Telcos have for long been demanding that the government gives a clear road map for auctioning spectrum, which would help them plan and allocate resources efficiently, roll out latest technologies, optimise networks and ensure quality services.
Ministry of Micro, Small & Medium Enterprises (MSME) Initiates Payment Efforts for MSME’s (source)
As per the press release issued by the Ministry of MSMEon October 19th, 2020, the Union Ministry of MSME’s has substantially widened its request to India Inc. for making payments to MSMEs against their dues of goods and services rendered. MSME Ministry has written to the top management of over 2800 corporatesby name, to make payments of pending dues of MSMEs.The MSME Ministry has also drawn attention of Corporate India towards important administrative, legal and fintech based provisions with regard to MSME payments.The key focus has been on legal provisions under the MSME Development Act, 2006, which mandates to make the payments to MSMEs within 45 days. As per related regulations, corporate entities are also required to file half-yearly returns with the Ministry of Corporate Affairs,regarding dues owed to MSMEs. In many cases it was observed by the MSME Ministry, that this too was not being done. The MSME Ministry has requested the corporates for their attention and needful action on these aspects.
Foreign Direct Investment in the Space Sector (source)
As reported by the Times of India, India’s new space policy will not just open up the sector to private Indian entities, but also encourage foreign direct investment (FDI) and allow foreign companies to set up facilities in the space sector. These bold initiatives are likely to be part of the policy framework, Department of Science is preparing. These initiatives include FDI in the space sector, with or without tie-ups with Indian firms, and allowing international entities to engage in a host of space related activities. Indian companies can form tie ups with foreign satellite companies.
FDI with Smallest Chinese Holding to Require Government Nod (source)
As reported by the Economic Times, FDI proposals with even minuscule Chinese holding will need government approval, with the Centre abandoning its earlier plan to set a floor for “significant beneficial ownership”.In April, when the Cabinet approved the plan for screening of FDI proposals from countries bordering India, the government had discussed the option to set the threshold at either 10%, the provision in the Companies Act, or 25%, the prescription in the Prevention of Money Laundering Act. The threshold view seems to have changed, as the Cabinet decision did not mention a minimum or maximum limit, thus even a small fraction, is intended to be covered. A threshold for “significant beneficial ownership” was meant to ensure that certain bordering countries do not enter India via third countries such as Singapore or Mauritius.The move is being closely watched by start-upshavingChinese investments.Further, it is reported, that an inter-ministerial group is preparing guidelines on the matter, to be followed by ministries ranging from commerce and industry to power and telecom. The proposed guidelines will assist ministries on assessing FDI proposals and will not be binding. Separately, the government is toying with the idea of legal changes, to ensure that the norms are not diluted in future. This may entail amendments to the Companies Act and Foreign Exchange Management Act, which governs FDI.
Establishment of a Self-Regulatory Organisation for Payment System Operators (source)
As per the notification issued by the Reserve Bank of India (RBI), on October 22nd, 2020, a framework for establishing a Self-Regulatory Organisation (SRO) for Payment System Operators (PSOs) is announced. An SRO is a non-governmental organisation that sets and enforces rules and standards relating to the conduct of member entities in the industry, with the aim of protecting the customer and promoting ethical and professional standards. RBI had placed a draft framework for public comments and based on the comments and suggestions received, it has finalised the ‘Framework for Grant of Recognition as a SRO. Interested groups / association of PSOs (banks as well as non-banks) seeking recognition as an SRO can apply to the Department of Payment and Settlement Systems.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.