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*   Permission for short-selling of equity shares to Foreign Institutional Investors by SEBI

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Permission for short-selling of equity shares to Foreign Institutional Investors by SEBI TOP

The Reserve Bank of India (RBI) in consultation with the Government of India and Securities and Exchange Board of India (SEBI), has decided to permit SEBI registered Foreign Institutional Investors (FIIs) and sub-accounts of FIIs to short sell, lend and borrow equity shares of Indian companies and will be subject to such conditions as prescribed by the RBI and SEBI /other regulatory agencies from time to time from February 1, 2008.

FIIs will only be able to short-selling / borrowing / lending of equity shares subject to the current Foreign Direct Investment (FDI) policy. Short-selling of equity shares by FIIs will not be permitted in equity shares which are in the ban list or caution list of the RBI. Borrowing of equity shares by FIIs will only be for the purpose of delivery into short sale. The margin, collateral shall be maintained by FIIs only in the form of cash. No interest will be paid to the FII on such margin/collateral.

The designated custodian banks will have to separately report all transactions pertaining to short-selling of equity shares and lending and borrowing of equity shares by FIIs in their daily reporting with a suitable remark (short sold/lent/borrowed equity shares) for the purpose of monitoring by the Reserve Bank.

Upto now under Foreign Exchange Management Act or any other law it was not specified that in what time frame shares in Indian company should be issued to any person or company resident outside India. But now RBI has amended the law to the effect that if the shares or convertible debentures are not issued within 180 days from the date of receipt of the inward remittance or date of debit to NRE / FCNR (B) account, the amount of consideration so received shall be refunded to the person concerned by outward remittance through normal banking channels or by credit to his NRE / FCNR (B) account, as the case may be;

Further RBI may, on an application made to it and for sufficient reasons permit an India company to refund the amount of consideration received towards issue of security, if such amount is outstanding beyond a period of 180 days from the date of receipt.

Delhi Metro Rail Corporation "DMRC" has become the first railway project in the world to earn carbon credit. United Nations has registered the Metro under the Clean Development Mechanism enabling it to claim carbon credits. DMRC will earn Certified Emission Reductions for the use of regenerative braking system in its rolling stock.

THE Supreme Court of India has ruled that international arbitration awards are not immune from challenge in the Indian courts of law. The provisions of Indian Arbitration and Conciliation Act will apply even to the international commercial arbitrations held outside the country unless the parties, by agreement, exclude all or any of its provisions. Supreme Court ruling set aside an earlier order of the Andhra Pradesh High Court.

High Court had ruled that international award cannot be challenged even if it is against public policy and in contravention of statutory provisions. The Supreme Court passed the verdict on the appeal of an US-based company. Michigan-based Venture Global Engineering had entered into a JV pact with Satyam Computer Services to constitute a company, named as Satyam Venture Engineering Services Ltd.

It was agreed that both the parties will have 50% holding in the JV. According to the shareholders agreement between the two partners, disputes have to be resolved amicably and, failing resolution, such disputes are to be referred to arbitration. In February 2005, disputes arose between the parties. On July 25, 2005, Satyam filed a request for arbitration with the London Court of International Arbitration. On April 3, 2006, an arbitration award was passed, directing the US firm to transfer shares to Satyam.

On April 14, 2006, a petition to recognize and enforce the award was filed before the Michigan court in the US. The appellant filed a suit in a city court of Secunderabad seeking quashing of the award and permanent injunction on transfer of shares under the award. The trial court rejected the plea and the order was challenged in HC. On February 27, 2007, HC dismissed it and the company then appealed in the Supreme Court.

A Supreme Court Bench of Justices Tarun Chatterjee and P Sathasivam said: “The provisions of Part-I of the Act (Arbitration and Conciliation Act, 1996) would apply to all arbitrations, including international commercial arbitrations, and to all proceedings relating thereto. We further hold that where such arbitration is held in India, the provisions of Part-I would compulsorily apply and parties are free to deviate to the extent permitted by the provisions of Part-I. It is also clear that even in the case of international commercial arbitrations held out of India provisions of Part-I would apply unless the parties, by agreement, express or implied, exclude all or any of its provisions.”

1.          Troikaa Pharmaceutical Ltd files Patent lawsuit on Pro Labs TOP

Troikaa Pharmaceutical Ltd, Ahmedabad-based Pharma Company has filed civil suit against the Haridwar-based Pro Laboratories claiming that it has infringed its patented design (D-shape and blue in colour) of the tablet and the trademark name of the company's blockbuster drug, Dynapar, the pain management drug. Market size in India is approximately Rs 2,000 crore. Troikaa Pharma had patented the tablet design and registered the brand name.

Troikaa had got its registered design number 186992 in the year 2001 from the Patent Office and the company had exclusive right on it for 10 years that end in the year 2011. While the Dynapar brand name was registered in 1992 with an exclusive right for 10 years, it was renewed by the company in the year 2004 for another 10 years. Pro Laboratories has asked for time to file the reply.

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