This week in Indian law: The Supreme Court declined to order a CBI investigation into the Adani Group, backing SEBI's ongoing regulatory inquiry. The Court held that arbitrator appointment applications must be filed within the limitation period. The personal guarantor insolvency judgment in Dilip Jiwrajka was anticipated. 5 significant legal developments this week across securities regulation and arbitration law.
Top story
SC Declines CBI Probe in Adani-Hindenburg, Backs SEBI Inquiry
Category: securities-market | Date: 2 November 2023 | Source: Supreme Court of India
The Supreme Court declined to order a CBI investigation into the Adani Group in the Adani-Hindenburg matter, instead backing SEBI's ongoing regulatory inquiry as the appropriate mechanism for investigating potential securities law violations. The Court observed that the Expert Committee constituted under its January 2023 order had found no evidence of regulatory failure requiring a parallel investigation. However, the Court directed SEBI to complete its remaining investigations within a specified timeline.
Why it matters: The judgment preserves the primacy of the securities market regulator in investigating market conduct. The Court's refusal to order a CBI probe reinforces the principle that specialised regulatory bodies — not general investigation agencies — are best suited to investigate domain-specific violations. Securities law practitioners should note the Court's endorsement of SEBI's investigative competence while acknowledging the need for timely completion.
Read more: Veritect analysis
Court judgments
SC: Arbitrator Appointment Beyond Three Years Barred by Limitation
Court: Supreme Court of India | Date: 18 May 2023 (prominent in legal discourse during this period)
The Supreme Court in B&T AG v. Ministry of Defence held that applications for appointment of arbitrators under Section 11 of the Arbitration and Conciliation Act 1996 are subject to the limitation period prescribed under the Limitation Act 1963. Applications filed beyond the three-year limitation period are time-barred and courts cannot exercise discretion to condone such delay in appointing arbitrators.
Key point: Parties seeking to invoke arbitration must be vigilant about limitation. Delay beyond three years in applying for arbitrator appointment under Section 11 will result in the application being dismissed as time-barred. This has significant implications for commercial parties who delay the invocation of arbitration clauses.
Also this week
- Dilip Jiwrajka personal guarantor judgment anticipated — The SC was expected to deliver its judgment on the constitutionality of the personal guarantor insolvency provisions under Part III of the IBC, which had been challenged on grounds of discrimination and procedural fairness.
- Parliament Winter Session preparations — The government began preparations for the Winter Session scheduled to commence December 4, with criminal law reform bills (BNS, BNSS, BSA) expected to be reintroduced.
- RBI risk weight circular expected — The RBI was expected to announce increased risk weights on consumer credit and NBFC exposure, with the circular anticipated in mid-November.
Looking ahead
- November 9: SC Dilip Jiwrajka judgment on personal guarantor insolvency under IBC
- November 10: SC expected to rule on Governor's power to withhold assent to state bills
- November 16: RBI risk weight circular expected
- December 4: Parliament Winter Session to commence
This is the Veritect Weekly Legal Roundup for Week 44 of 2023. For daily updates, visit our legal news page. Subscribe to receive this roundup every Monday morning.
Veritect provides this content for informational purposes and does not constitute legal advice.