India Business Law Journal reveals the most significant deals and disputes of 2019 and the law firms that worked tirelessly to bring them to fruition

The best transactions for the past year in India came against a backdrop of economic gloom, with a defiant government attempting to ward off negative business sentiment while simultaneously singing the praises of a vibrant and rewarding place to do business.

To shore up resolve in the private sector, the government cut the corporate tax rate to 22% and moved to decriminalize offenses under the Companies Act.

But it was always going to be a difficult sell. The view from international organizations was a negative one and the International Monetary Fund (IMF) in January 2020 cut its economic growth estimate for India’s 2020 fiscal year to 4.8%, while the Asian Development Bank (ADB) lowered its forecast to 5.1% around the start of 2020. In contrast, the Organisation for Economic Co-operation and Development (OECD), which is normally seen as one of the more pessimistic on the Indian economy, forecast a higher rate of 5.9% growth last September.

Declines were especially apparent in the auto and real estate sectors. The auto sector has seen the steepest drop in 20 years, while the property sector faced challenges due to an increase in unsold inventory in major cities and a liquidity crisis that has stalled many projects.

The Insolvency and Bankruptcy Code, 2016 (IBC), one of the most promising laws in recent years, won some important successes in the courtroom, including the Essar Steel verdict, which will see banks recover more than 90% of the debt owed to them. The Supreme Court in the Swiss Ribbons matter upheld the constitutional validity of the IBC and also laid several issues pertaining to the code to rest.

However, the IBC remains far from reaching its objective of preserving corporate debtors as a going concern, and of their resorting to liquidation as a last resort. Of the 2,542 companies admitted in the corporate insolvency process as of September 2019, 156 ended with the approval of a resolution plan, while 587 companies ended in liquidation.

Deal values fell to US$73 billion in 2019 from a 2018 high of US$121 billion, as M&A values sank back to 2017 figures, according to PwC. At the ground level, deal tracking website Acuris noted a drop of about 50% in deal values on work done by many of the country’s largest law firms over the previous year, while deal numbers remained consistent.

And yet, despite the gloom, India remains a place where billion-dollar deals are common. The M&A space saw promising deals including the US$12 billion merger of Gruh Finance and Bandhan Bank, and UPL Corporation’s US$3 billion acquisition of Arysta LifeScience. The year also saw law firms submit many interesting deals to India Business Law Journal, especially in the white-collar crime and IP dispute areas. Due to the constraints of this article we must shortlist the submissions.

METHODOLOGY

India Business Law Journal selected 50 landmark deals and disputes that were completed between November 2018 and November 2019, following intensive research and consultation. The deals and cases were chosen subjectively based on transactional data, submissions received from Indian and international law firms, and interviews with India-focused legal and corporate professionals.

In deciding the winning deals and cases, our editorial team evaluated the significance of all shortlisted contenders from a legal and regulatory standpoint. Deals were chosen not only for their size, but for the novelty and complexity of the transaction or case, and for any precedents that may have been established. The same criteria were applied in choosing the star deals.

Capital marketsDisputesInsolvencyJoint venturesMergers & AcquisitionsOther

Capital Markets


Vodafone Idea’s ₹250 billion rights issue

VALUEPRINCIPAL LAW FIRMS
US$3.5 billionCyril Amarchand Mangaldas
S&R Associates
Sidley Austin

Vodafone Idea raised ₹250 billion (US$3.5 billion) in one of the largest rights issues in the country. This was Vodafone Idea’s first capital raising after the merger of Vodafone India and Idea Cellular in August 2018.

Vodafone offered about 20 billion equity shares at ₹12.50 per equity share. The issue was covered about 1.08 times. Vodafone Idea had 32% of the revenue market share as of December 2018, and 387 million subscribers. The promoter shareholders, Vodafone Group and Aditya Birla Group, picked up ₹110 billion and ₹72.5 billion worth of shares, respectively.

S&R Associates advised Vodafone India, Cyril Amarchand Mangaldas acted as Indian legal counsel to bookrunning lead managers Kotak Mahindra Capital, DSP Merrill Lynch, Morgan Stanley India, HDFC Bank and SBI Capital Markets. The Singapore and New York offices of Sidley Austin acted as special US counsel to the lead managers.

Bharti Airtel’s rights issue

VALUEPRINCIPAL LAW FIRMS
US$3.5 billionAZB & Partners
Shardul Amarchand Mangaldas & Co

Indian telecoms company Bharti Airtel raised ₹250 billion (US$3.5 billion) from one of the largest rights issues in the country. The mobile operator issued 1,133,591,075 equity shares at ₹220 per share, aggregating to about ₹249 million.

This deal was one of the largest public equity capital-raising exercises in India to date. The deal involved many complexities because of the size of the issue including complex structuring, corporate and tax matters, litigation of the issuer and its multiple subsidiaries, and discussions on different Securities and Exchange Board of India (SEBI) regulations.

AZB advised the issuer, Bharti Airtel. Shardul Amarchand Mangaldas & Co acted as Indian counsel to bookrunners Axis Capital, JP Morgan India, Goldman Sachs, HSBC Securities and Capital Markets, and ICICI Securities. Latham & Watkins advised bookrunners on US law.

Axis Bank’s US$1.75bn qualified institutional placement

VALUEPRINCIPAL LAW FIRMS
US$1.75 billionAZB & Partners
Latham & Watkins
Shardul Amarchand Mangaldas & Co

Axis Bank, India’s third-largest private commercial bank in terms of deposits, advances and number of branches, raised US$1.75 billion from a qualified institutional placement in the largest such private sector arrangement and the second-largest qualified institutional placement in India to date. The bank offered 198,728,139 equity shares in the placement and was offering it at a 5% discount to the market price. The books were oversubscribed.

The bank intended to use the net proceeds to enhance its capital adequacy, and for general corporate purposes. Shardul Amarchand advised the issuer, Axis Bank. AZB & Partners and Latham & Watkins were Indian and US counsel to the bookrunners, respectively.

State Bank of India’s dual tranche, senior notes issuance

VALUEPRINCIPAL LAW FIRMS
US$1.2 billionAllen & Overy
J Sagar Associates
Linklaters
Shardul Amarchand Mangaldas & Co

The State Bank of India (SBI) became the first Indian issuer in 2019 to make a Rule 144A bond offering. The bank made a US$1.25 billion dual tranche Regulation S/Rule 144A senior notes issuance, which included US$400 million of 4% notes due 2022, and US$850 million of 4.37% notes due 2024. The bonds were listed on the Singapore Stock Exchange and the India International Exchange, GIFT City.

This was the first Rule 144A bond offering by an Indian issuer in 2019, and marked the SBI’s return to US capital markets following its record-setting qualified institutional placement in 2017.

Allen & Overy advised the SBI on US law, while Shardul Amarchand Mangaldas & Co advised the bank on aspects of Indian law. Linklaters Singapore was the adviser to initial subscribers on US and English law, while J Sagar Associates advised them on aspects of Indian law.

The State Bank of India is the country’s largest bank with more than 22,300 branches and 420 million customers.

Greenko’s US$1bn bond offering

VALUEPRINCIPAL LAW FIRMS
US$1 billionAshurst
Cyril Amarchand Mangaldas
Mayer Brown
Shearman & Sterling
Talwar Thakore & Associates
YKJ Legal

Indian renewable energy company Greenko Energy issued Asia’s largest green bond offering of the year, raising US$950 million. It was the largest high-yield bond issuance from India for 2019. It is the third issuance from the Indian clean energy producer, which has 4.1 gigawatts of operational capacity across wind, solar and hydro power. Greenko’s shareholders include GIC Holdings and the Abu Dhabi Investment Authority.

The notes comprised two tranches – US$500 million 5.55% senior notes due 2025, and US$450 million 5.95% senior notes due 2026. The notes are guaranteed on a senior basis by Greenko Energy Holdings, and secured by a share pledge over the capital stock of Greenko Solar and a first priority security interest in an escrow account of the net proceeds from the sale of the notes, before the release, to lending or subscription of offerings by Greenko’s Indian subsidiaries.

Shearman & Sterling represented Greenko Energy and Greenko Solar (Mauritius). The Shearman team included partner Andrew Schleider and associate Jeremy Wang. Cyril Amarchand Mangaldas was Indian legal counsel to the issuer and YKJ Legal was Mauritius counsel to the issuer.

Ashurst was US counsel and Talwar Thakore & Associates was Indian counsel to the bookrunners. The Ashurst team was led by partner Anna-Marie Slot, assisted by partner Jeffrey Koppele, counsel Natalia Sokolova and Ethan Perry, and senior associates Chin Lee and Robert Thurlow. Mayer Brown was the US counsel to the trustees.

STAR DEALS

Embassy Office Parks REIT initial public offering

VALUEPRINCIPAL LAW FIRMS
US$670 millionClifford Chance
Cyril Amarchand Mangaldas
Latham & Watkins
S&R Associates
Simpson Thacher & Bartlett

The Embassy Office Parks IPO in March 2019 was the first listing by a real estate investment trust (REIT) in India. The ₹47.5 billion IPO saw investors bid for about 183.5 million shares, or about 2.57 times the 71.3 million on offer.

The lead managers were Morgan Stanley India, Kotak Mahindra Capital, JP Morgan India, DSP Merrill Lynch, Axis Capital, Credit Suisse Securities (India), Deutsche Equities India, HSBC Securities and Capital Markets (India), IIFL Holdings, JM Financial, and Nomura Financial Advisory and Securities (India).

Latham & Watkins represented the lead managers on the deal, while S&R Associates was Indian counsel. Cyril Amarchand Mangaldas and Clifford Chance were legal advisers to the Embassy REIT. Simpson Thacher & Bartlett was international counsel to Blackstone.

“This was a highly complex transaction involving capital markets, competition law, debt financing and M&A aspects,” said an S&R Associates spokesperson. “The transaction set a precedent for the real estate investment trust market in India.”

Transaction approvals were required from several regulators including SEBI, the Competition Commission of India (CCI), special economic zone authorities and local land authorities.

It is Asia’s largest REIT to date in terms of portfolio size and is co-sponsored by the Blackstone group and the Embassy group. The REIT resulted in the pooling of 13 assets owned by Embassy and Blackstone, amounting to ₹32.7 billion.

Capital marketsDisputesInsolvencyJoint venturesMergers & AcquisitionsOther

Disputes


Moratorium order for ITNL

VALUEPRINCIPAL LAW FIRMS
US$14 billionShardul Amarchand Mangaldas & Co

Shardul Amarchand Mangaldas advised Infrastructure Leasing & Financial Services’ (IL&FS) largest subsidiary, IL&FS Transportation Networks (ITNL), in preparing bid documentation, and assisted the financial and transaction advisers in conducting the sale process of business undertakings and projects of ITNL, both in India and abroad, and on corporate compliance, including listing obligations.

In 2018, IL&FS, one of India’s largest infrastructure financing companies, defaulted on its debt obligations of about US$14 billion, leading to severe disruption in the Indian financial and infrastructure sectors.

One of the challenges in unwinding this debt was that the resolution process prescribed under the IBC was not available, because it is a non-banking finance company.

ITNL has 28 build-operate-transfer infrastructure projects that are being sold as part of the debt unwind plan. It has some of the largest infrastructure projects in India, including the Chenani-Nashri tunnel, which will be India’s longest tunnel. This was a significant deal in the Indian infrastructure sector because of the number, size and importance of ITNL’s projects.

High-profile insolvency of Binani Cements

VALUEPRINCIPAL LAW FIRMS
US$1.1 billionArgus Partners
L&L Partners

The Binani Cements insolvency case became the first successful big-ticket matter to result in 100% recovery for all creditors. The Supreme Court in November 2018 upheld an order of the NCLAT that approved a ₹79 billion offer by Ultratech Cement to buy Binani. The offer by Ultratech had faced a serious challenge from Dalmia Cements, which was heard before the NCLT, NCLAT, and the Supreme Court.

The NCLAT in its judgment had said: “The first order objective is resolution. The second order objective is maximization of the value of assets of the corporate debtor, and the third order objective is promoting entrepreneurship, availability of credit and balancing the [various] interests. This order of objectives is sacrosanct.”

The Committee of Creditors (CoC) stated that after the deadline for submission of resolution plans it would only engage with the highest resolution applicant, and not others. Dalmia emerged as the highest bidder. However, Ultratech submitted a revised plan after the deadline. The NCLT urged the CoC to consider both plans, and it voted unanimously in favour of Ultratech’s resolution proposal.

Argus Partners advised the CoC on the corporate insolvency resolution process (CIRP). A key element of the case for the firm pertained to the need to weigh the importance of value maximization versus timely completion of the CIRP. Argus negotiated complex resolution plans, in the first instance with Dalmia Cements, and subsequently with Ultratech. It held meetings and discussions with the other bidders for the assets, and the firm’s offices in New Delhi, Mumbai and Kolkata simultaneously worked on the matter.

The team included lead and managing partner Krishnava Dutt, senior partner R Sudhinder, and partners Soorjya Ganguli, Aastha, Adity Chaudhury, Arka Majumdar and Pooja Chakrabarti. L&L Partners advised the resolution professional Vijay Iyer and his team from Deloitte Touche Tohmatsu India.

Zee and Indiabulls dispute over 4 loans

VALUEPRINCIPAL LAW FIRMS
US$104 millionTrust Legal

Zee Entertainment Enterprises was faced with a litigation while undertaking the country’s largest disinvestment in the media and entertainment sector in the past 25 years. The dispute was with Indiabulls Housing Finance over four loan transactions amounting to US$104 million.

Indiabulls sought a stay against the proposed stake sale. However, the Delhi High Court did not restrain the stake sale, and Indiabulls appointed former chief justice B D Ahmed as an arbitrator in accordance with its loan agreement.

Trust Legal represented Zee Entertainment Enterprises and 16 other entities of Essel Group in the dispute before the Delhi High Court, and the arbitral proceedings. The team included managing partner Sudhir Mishra, partners Ritwika Nanda and Petal Chandhok. Promoter Essel Group has been steadily selling its stake in Zee Entertainment Enterprises to repay lenders more than US$1.6 billion.

Nippon Steel trademark dispute

VALUEPRINCIPAL LAW FIRMS
N/AGajria & Co
Remfry & Sagar

The Bombay High Court, in the trademark infringement dispute Nippon Steel & Sumitomo Metal Corporation v Kishor D Jain & Anr, awarded the highest recorded amount in India to date. Nippon Steel Company filed a lawsuit against the defendants for selling counterfeit iron pipes made to appear like the plaintiff’s products. The suit for a permanent injunction was based on a complaint by Yanbu Steel Company from Saudi Arabia. Yanbu Steel raised the issue about the quality of carbon seamless pipes for use in oil plants that it had sourced from the defendants, believing the same had been manufactured by Nippon. The pipes supplied by the defendants were accompanied by forged and fabricated certificates purportedly issued by the plaintiff and bearing its trademarks and logos.

Remfry & Sagar filed the lawsuit in question on behalf of Nippon Steel through its solicitors Gajria & Co in Mumbai. The court in March 2019 passed an ex parte ad interim injunction restraining the defendants from infringing on the plaintiff’s registered trademarks. Court receivers then visited the defendants’ premises and seized various branded and unbranded iron pipes, as well as mirror copies of the defendants’ electronic records.

The court noted that the plaintiff’s products are used in extremely sensitive areas, where the quality of apparatus is of utmost importance. It also observed that the defendant’s actions impacted the reputation of the company and the country. Justice SJ Kathawalla awarded costs of ₹50 million at the plaintiff’s behest and directed the defendants to pay the amount to the Tata Memorial Hospital in Mumbai, which is a specialist centre for cancer treatment and research.

The court also directed the defendants to furnish personal undertakings including, addressing communications to every entity to which spurious pipes under the plaintiff’s marks had been supplied to. The verdict indicated the strict approach of the courts to curb misuse, especially where the infringing activity could cause severe harm to consumers.

Cyrus Investments Pvt Ltd & Anr v Tata Sons & Ors

VALUEPRINCIPAL LAW FIRMS
N/AChambers of Jaitley and Bakhshi
Karanjawala & Co
Makhija & Associates
Mulla & Mulla
Shardul Amarchand Mangaldas & Co

Certain minority shareholders of Tata Sons, which are owned and controlled by Cyrus Mistry and his family, filed a petition under sections 241, 242 and 244 of the Companies Act, 2013, raising allegations of oppression and mismanagement against the dominant shareholders of Tata Sons, the trustees of Sir Dorabji Tata Trust and Sir Ratan Tata Trust, including Ratan Tata.

Petitioners alleged that the trustees, particularly Tata and Noshir Soonawala, interfered in the affairs of Tata Sons on the strength of certain affirmative/veto rights enshrined in the articles in favour of Tata Trusts. The petition called into question past business decisions allegedly for ulterior ends. The petition also impugned the removal of Cyrus Mistry as the chairman of the board of directors of Tata Sons, and the operating companies of the Tata Group.

The NCLT dismissed the petition, holding that no case for oppression and mismanagement has been made out in respect of any of the allegations levelled by the petitioners. On appeal, the NCLAT quashed the NCLT order and ordered the reinstatement of Cyrus Mistry as chairman of Tata Sons.

Karanjawala & Co represented Tata Sons before the NCLAT, while Mulla & Mulla represented some of the trustees of Sir Dorabji Tata Trust and Sir Ratan Tata Trust. Chambers of Jaitley and Bakshi and Akshay Makhija represented the appellants. Shardul Amarchand Mangaldas & Co advised, acted and represented Tata Sons, Tata and Amit Chandra in the NCLT and the NCLAT.

WS Industries takes on exchanges

VALUEPRINCIPAL LAW FIRMS
N/ABharucha & Partners

The WS Industries (India) Limited v BSE Limited and National Stock Exchange of India Limited dispute before the Securities Appellate Tribunal (SAT) was the first instance where the tribunal clarified how penalties prescribed in the Standard Operating Procedure (SOP) circular should be levied. The Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) had imposed penalties on more than 250 companies for non-compliance with the listing and disclosure requirements of the SEBI since the circular was issued in May 2018.

Both stock exchanges had separately levied a penalty on WS Industries for not appointing a woman director on its board of directors, as per the SEBI rules on the composition of boards. The stock exchanges had also penalized other companies for not appointing a compliance officer and share transfer agent. Other reasons for penalties include not submitting shareholder complaints statements in time, not constituting the nomination and remuneration committee, and the audit committee.

The tribunal, in its September 2019 order, noted that the SOP circular provided stock exchanges with the flexibility to decide whether penalties should be imposed, and deviate from the standard procedure where necessary. The BSE, in its defence, said it had charted out circumstances in its SOP where penalties for companies could be waived or reduced. But the WS Industries case was not among these circumstances. The tribunal noted that the BSE’s SOP was an indicative list of events that was not exhaustive in nature.

The tribunal also asked the SEBI to consider that stock exchanges should only be able to impose a single penalty for the same violation, instead of separate penalties by the exchanges.

Bharucha & Partners represented WS Industries in the dispute. The team included partner Ajai Achuthan, and associates Mehul Jain and Chirag Chabbra.

“The observations of the SAT in this order will have an impact on Indian listed companies and other intermediaries,” says Achuthan, “since this order streamlines the processes which the stock exchanges must follow while imposing penalties under the SOP circular.” Achuthan added that the challenging aspect for the firm was that there were no precedents that provided clarity on the interplay between listing regulations, the SOP circular and the BSE’s SOP.

STAR DEALS

McDonald’s dispute with Indian JV partner

VALUEPRINCIPAL LAW FIRMS
N/AS&R Associates

McDonald’s Corporation in May 2019 reached an agreement with its estranged business partner, Vikram Bakshi, ending a shareholder’s dispute that lasted six years. McDonald’s acquired 50% of the equity share capital of Connaught Plaza Restaurants Limited (CPRL), which was the former joint venture of McDonald’s in north and east India.

The dispute began in August 2013, when McDonald’s sought the removal of Bakshi as the CPRL’s managing director. The NCLT reinstated him in July 2017, but the following month McDonald’s terminated its franchise relationship with CPRL, which led to the closure of some of its 169 restaurants. The dispute included hearings before the Supreme Court, Delhi High Court, the NCLAT and the London Court of International Arbitration.

S&R Associates represented McDonald’s in the proceedings. The firm’s team included partner Niti Dixit, counsel Abhishek Tewari and associates Raunaq B Mathur and Zahra Aziz. In addition, the firm advised on M&A, corporate, regulatory, employment and competition law matters. Shardul Amarchand Mangaldas & Co represented Vikram Bakshi Holdings.

Big payout for Philips

VALUEPRINCIPAL LAW FIRMS
N/AAnand and Anand

The Delhi High Court in April 2019, in the cases of Philips v Amazestore & Ors, and Philips v Amitkumar Kantilal Jain & Ors, awarded one of the highest amounts of damages in a copyright and design infringement case. The court awarded damages of ₹31.5 million against the defendants for imitating the design of Philips’ Advanced Trimmer 3000 series product.

In the case, Philips filed two suits. The first one was for piracy of a registered design and the other was for infringement of copyright, and the court consolidated both suits and passed a permanent injunction.

The defendants in the matter were Nova Manufacturing Industries (manufacturer of the infringing product), Badri Electro Supply and Trading Company (owner of the Nova trademark) and Omni Exim Private Limited (importer of the infringed product).

The court arrived at the amount of damages on the basis of how much the infringing activities of the defendants had cost Philips.

Anand and Anand represented Philips on the matter. According to the firm, the defendants were members of an international criminal syndicate and the quantum of damages awarded far outweighed the profits they would have made.

The court also laid down a set of guidelines to determine the grant of damages in intellectual property infringement cases proportionate to the degree of misconduct. The lawyers from Anand and Anand included managing partner Pravin Anand, partner Vaishali Mittal, managing associate Siddhant Chamola and associate Vrinda Gambhir.

Colgate v John Doe trademark dispute

VALUEPRINCIPAL LAW FIRMS
N/AAnand and Anand

Colgate in July 2018 learned through its investigators that a ship from a port in Ningbo, China carrying large quantities of a toothbrush bearing a similar mark, “Coldent”, was making its way to Kolkata.

Colgate approached the Delhi High Court and provided details of the vessel, container numbers, port details and also the similarity between the trade dress of the plaintiff and Coldent.

Section 11(2)(n) of the Customs Act, 1962, gives the government the powers to prohibit the export of goods that are subject to prohibition under the Customs Act, Trademarks Act or Patents Act. Under such circumstances, and hearing the plaintiff’s arguments, the court directed customs officials to immediately freeze the contents of the concerned ship and containers, and to divulge the details of the goods contained, the details of the exporter and importer, and the value and number of goods to the plaintiffs.

The court in April 2019 ruled in favour of Colgate through a settlement agreement with the defendants. The defendants acknowledged the rights of the plaintiffs and made an undertaking not to use the mark Coldent or any other mark similar to those of the plaintiff in the future. The defendants also agreed to co-ordinate with customs officials and destroy the infringing branded toothbrushes.

Anand and Anand represented Colgate, and the firm was represented by managing partner Pravin Anand, partner Dhruv Anand and managing associate Udita M Patro.

STAR DEALS

Defence of constitutionality of the IBC

VALUEPRINCIPAL LAW FIRMS
N/AAgarwal Law Associates
AZB & Partners
Cyril Amarchand Mangaldas
Shardul Amarchand Mangaldas & Co
Udit Kishan & Associates

In Swiss Ribbons Pvt Ltd & Anr v UOI & Ors, the Supreme Court upheld the constitutional validity of the Insolvency and Bankruptcy Code. The bench, comprising Justice Rohinton F Nariman and Justice Navin Sinha, laid to rest several issues in their judgment in January 2019, which arose due to the departure of the code from previous laws governing insolvency in the country.

The petitions challenging the code raised issues relating to the preamble and approach of the code, classification of financial creditors and operational creditors, powers of the resolution professional, constitution of various benches of the NCLT and the NCLAT, and constitutional validity of section 29A.

The Supreme Court dismissed all the petitions and upheld the code in its entirety. It recognized the legislature’s right to experimentation in the field of economic legislation, and the positive impact of the working of the code, and added that the resolution process was not adversarial to the corporate debtor.

The court said: “The primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management, and from a corporate death by liquidation. The code is thus a beneficial legislation, which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors.”

AZB & Partners advised and represented the Reserve Bank of India (RBI) in the proceedings. Agarwal Law Associates, Cyril Amarchand Mangaldas, Udit Kishan & Associates and Shardul Amarchand Mangaldas & Co represented the petitioners.

Dahej petrochemicals’ contract dispute

VALUEPRINCIPAL LAW FIRMS
N/ADrew & Napier
KL Partners
RS Prabhu & Co

The dispute between Daelim Industrial Company Limited, one of Korea’s leading chaebols, and ONGC Petrol Additions Limited (OPAL) arose from the former’s inability to carry out construction of a plant at the Dahej petrochemicals complex. As a result, OPAL cancelled the contract and commenced arbitration proceedings in Singapore. Daelim in its defence stated it was unable to proceed due to its technology partner backing out of the project.

OPAL claimed more than US$200 million in damages. However, the arbitration tribunal in December 2018 rejected the claimant’s claim in respect of more than US$150 million. Thus, Daelim was able to resist more than three-quarters of the claim.

Drew & Napier represented Daelim in the dispute. “[The team] undertook a deep dive into the technical details of the inflated delay claim of US$150 million,” said Mahesh Rai, director, dispute resolution at Drew & Napier. “We uncovered information showing that the delay claim was a sham, as the upstream units of the plant were not ready, and hence any delay by Daelim would have been overshadowed by the larger delays that the plant was facing.” KL Partners were the instructing solicitors for Daelim. RS Prabhu appeared for OPAL.

The Dahej complex, located in Gujarat state, is the largest petrochemicals plant in India, and in Asia.

Copyright infringement suit against Spotify

VALUEPRINCIPAL LAW FIRMS
N/AKhaitan & Co

In a copyright infringement matter initiated by Indian music label Saregama against the music streaming website Spotify, the latter informed the Delhi High Court in April 2019 that it would take down more than 100,000 songs belonging to Saregama.

The court accepted the submission of the defendant and bound Spotify to take down the songs within 10 days from its platform. It then disposed of the matter.

Saregama had filed for an injunction to stop Spotify from using its songs. Spotify received Saregama’s music to host on its platform ahead of the website’s launch in India. The discussions began in February 2018, but the licensing agreement could not be finalized.

However, Spotify retained the songs, citing the Copyright Act’s statutory licensing scheme under section 31D. The section allows any broadcasting organization to communicate to the public any previously published musical work or sound recording by invoking a compulsory licence through a unilateral notice, and paying royalty rates determined by the Intellectual Property Appellate Board in the manner prescribed under the Copyright Rules. The amendment was made keeping radio broadcasters in mind, and a 2016 memorandum by the Department for Promotion of Industry included internet broadcasters.

However, it requires that prior notice be given to the publisher about the duration and territorial area of the broadcast, which is not possible in the case of a streaming website. Spotify was embroiled in a similar dispute with Warner Chappel Music on this aspect. Khaitan & Co represented Saregama in the matter.

Monsanto BT cotton patent restored

VALUEPRINCIPAL LAW FIRMS
N/AAnand and Anand

In the I. Mahyco Monsanto Biotech (India) Pvt Ltd [MMBL] v Nuziveedu Seeds Ltd dispute, the Supreme Court in January 2019 restored Monsanto’s patent for BT cotton.

Before the case was heard by the Supreme Court, both parties had approached the division bench of the Delhi High Court contesting a decision by a Delhi High Court single judge. Nuziveedu Seeds contested the judge’s decision to uphold the validity of the BT cotton patent, while Monsanto challenged the judge’s decision to reinstate the agreement between the parties and pay Monsanto as per the government fixed tariff.

The division bench held that Monsanto’s patent was invalid, being a non-patentable subject matter under section 3(j) of the Indian Patent Act, which is a provision that prevents patents on plants, animals, parts of these, and seeds.

With regards to the division bench’s decision, the Supreme Court held that summary adjudication of a technically complex suit without expert evidence was neither desirable nor permissible in law. The court set aside the order of the division bench. It also restored the order of the single judge and remanded the case to the single judge for disposal.

The Supreme Court observed that it was satisfied that the nature of the injunctive relief granted by the single judge was in order and merited no interference during the pendency of the suit.

The dispute dates back to 2015, after Nuziveedu Seeds refused to pay licence fees for the patented technology to Monsanto, ending their agreement. Nuziveedu had sought a reduction of the fees but Monsanto had refused.

Anand and Anand represented Monsanto on the matter.

STAR DEALS

Supreme Court strikes down RBI circular

VALUEPRINCIPAL LAW FIRMS
N/AAgarwal Law Associates
J Sagar Associates
Link Legal India Law Services

A Supreme Court bench of Justice Rohinton Nariman and Justice Vineet Saran in April 2019 delivered a landmark judgment in the case of Independent Power Producers Association of India v Union of India, which struck down a circular issued by the Reserve Bank of India.

The circular, titled Resolution of Stressed Assets – Revised Framework, gave defaulting companies with a debt higher than ₹20 billion a time limit of 180 days to reach a resolution plan with their lenders, or be taken to bankruptcy court. The Supreme Court held that the RBI circular was ultra vires section 35AA of the Banking Regulation Act, and that the RBI could not have issued general directions to banking companies under section 35AA. In repealing the circular, banks were able to decide their own course of action for the companies affected by the circular.

Link Legal India Law Services advised and represented the power sector through the Independent Power Producers Association of India (IPPAI) as well as GMR Chhattisgarh Energy and GMR Rajahmundry Energy in its challenge to the RBI circular.

“The key challenge by the IPPAI is that its members are not wilful defaulters,” said Atul Sharma, the managing partner at Link Legal. “The reasons for stressed assets in the power sector were on account of issues such as lack of availability of coal and gas, delays in making payments by discoms [power distribution companies], lack of power purchase agreements offered by states, and contractual/tariff-related disputes, all of which were not attributable to independent power producers and were beyond their control.”

Agarwal Law Associates was also advising GMR Chhattisgarh Energy Limited and GMR Rajahmundry Energy Limited. J Sagar Associates represented the Association of Power Producers, Rattan India, GVK, GMR and Coastal Energen.

Capital marketsDisputesInsolvencyJoint venturesMergers & AcquisitionsOther

Insolvency


STAR DEALS

Insolvency resolution of Essar Steel

VALUEPRINCIPAL LAW FIRMS
US$7 billionCyril Amarchand Mangaldas
L&L Partners
S&R Associates
Shardul Amarchand Mangaldas & Co

The insolvency proceedings against Essar Steel had been closely watched, as it had been on the RBI’s list of 12 largest non-performing asset accounts for banks in India. The resolution plan submitted by ArcelorMittal was selected by the CoC after seeing challenges before the NCLT, NCLAT and the Supreme Court.

The Supreme Court in November 2019 laid to rest the battle for the acquisition of Essar Steel, which owed US$7 billion to financial and operational creditors.

The resolution was welcomed by the lending community, as with ArcelorMittal’s resolution plan, and banks are expected to recover 92% of the ₹400 billion debt owed to them. State Bank of India is one of the biggest beneficiaries and is expected to receive ₹120 billion.

“This is one of the largest insolvency resolution proceedings in the country,” said a spokesperson from Shardul Amarchand Mangaldas & Co. “It involves some of the most complex and fundamental issues of jurisprudence and litigation with respect to inter se rights among financial creditors.”

The Supreme Court held that all creditors were not entitled to equal recovery under a resolution plan. It said applying a principle of equality may motivate creditors to vote for liquidation instead of revival of a corporate debtor, which was against the spirit of the IBC. The court also said that the financial wisdom of the CoC could not be questioned as long as the objectives of the IBC are met.

Shardul Amarchand Mangaldas & Co was legal counsel to the CoC. S&R Associates and L&L Partners were legal counsel to ArcelorMittal, while Cyril Amarchand Mangaldas acted as legal counsel for the resolution professional.

UVARCL’s resolution plan in Aircel’s insolvency

VALUEPRINCIPAL LAW FIRMS
US$2.87 billionCyril Amarchand Mangaldas
L&L Partners
Shardul Amarchand Mangaldas & Co

Aircel Group filed for insolvency under the IBC after being unable to repay debts owing to a continuous loss of revenue precipitated by the ongoing telecoms war.

The total admitted debt of Aircel Group was ₹200 billion and the CoC of Aircel group approved the resolution plans submitted by UV Asset Reconstruction Company Limited (UVARCL). L&L Partners assisted UVARCL.

“The telecoms industry is capital intensive and oligopolistic in nature, requiring enormous investments in technology,” said an L&L Partners spokesperson. “The finances of almost all the telecoms players have been destabilized due to a tariff war, and the debt level of telecoms companies.”

“Also, the resolution plan did not entail upfront or guaranteed payment to the creditors, but involves issuance of equity shares and zero coupon optionally convertible debentures, which would be redeemed contingent on monetization of the assets of Aircel Group,” said the spokesperson. The insolvency saw creditors agree to one of the lowest recoveries of the admitted amounts.

Shardul Amarchand Mangaldas & Co was counsel to the resolution professional. Cyril Amarchand Mangaldas was counsel to the CoC. Aircel Group was one of India’s leading innovative mobile service providers with a subscriber base of 87.7 million.

STAR DEALS

Acquisition of Bhushan Power and Steel by JSW Steel

VALUEPRINCIPAL LAW FIRMS
US$2.74 billionCyril Amarchand Mangaldas
L&L Partners
Shardul Amarchand Mangaldas & Co

Indian steel maker Bhushan Power and Steel (BPSL) was acquired by JSW Steel in a corporate insolvency process for US$2.7 billion, after the NCLT accepted its bid. BPSL has large-scale operations across the country, with a 2.3 million tonnes per annum integrated steel and power plant in Orissa, as well as smaller units in West Bengal and Chandigarh.

The steel maker had received bids from Tata Steel, JSW Steel and Liberty House Group after the insolvency resolution professional had invited bids for resolution plans. The deal was notable because of a protracted legal battle on significant points of law.

One issue of contention in the NCLT was with regard to the late entry of Liberty House Group on the question of whether revised financial offers submitted by the resolution applicants could be considered by the CoC at a late stage. The NCLT observed that the CoC has an absolute right to negotiate better terms with the compliant resolution applicants, and that allowing eligible resolution applicants to revise their financial offers is permissible.

Another matter that came up before the NCLAT was the issue of operational creditors in BPSL, which run into thousands. The NCLAT appointed a single representative on behalf of the operational creditors, who was also authorised to attend CoC meetings where the resolution plans were considered.

Shardul Amarchand Mangaldas & Co was the adviser to BPSL, Cyril Amarchand Mangaldas advised the CoC and L&L Partners advised JSW Steel.

Resolution of Ruchi Soya insolvency

VALUEPRINCIPAL LAW FIRMS
US$1.7 billionAthena Legal
Cyril Amarchand Mangaldas
L&L Partners
Vaish Associates Advocates

Ruchi Soya Industries has a wide range of food products that includes cooking oils, nutritional soya foods, top grade vanaspati and bakery fats. However, the company was referred to insolvency proceedings by the NCLT on an application made by its financial creditors. Ruchi Soya had a total debt of about ₹120 billion, which it owed to financial and operational creditors. It was part of the second list of 28 defaulters the Reserve Bank of India had flagged for resolution.

The resolution plan submitted by a consortium headed by consumer goods company Patanjali Ayurved was chosen by the Committee of Creditors. The approval of the CoC came after protracted litigations and more than 16 months since the start of the process.

L&L Partners assisted the CoC in the insolvency matter on the negotiation, strategy, drafting, review and finalization of resolution plans, and provided guidance through the entire insolvency resolution process.

Ruchi Soya’s leading brands include Nutrela, Mahakosh, Sunrich, Ruchi Star and Ruchi Gold. The Patanjali Group is a conglomerate in the field of fast-moving consumer goods (FMCG) products, ayurvedic and medicinal products.

Cyril Amarchand Mangaldas was adviser to the resolution professional of Ruchi Soya. Athena Legal and Vaish Associates Advocates were advisers to Patanjali Ayurved.

Capital marketsDisputesInsolvencyJoint venturesMergers & AcquisitionsOther

Joint ventures


JV of Mahindra & Mahindra and Ford

VALUEPRINCIPAL LAW FIRMS
US$275 millionCyril Amarchand Mangaldas
Hogan Lovells
J Sagar Associates
Khaitan & Co
Linklaters

The joint venture (JV) between Mahindra & Mahindra and Ford Motor Company in October 2019 saw Ford hand over control for most of its India operations to Mahindra. Mahindra owned a 51% controlling stake in the JV and Ford owned a 49% stake.

The JV was valued at ₹19.2 billion and was one of the largest such arrangements between two global automotive business houses in 2019. The JV company will develop, market and distribute Ford brand vehicles in India as well as, Ford and Mahindra brand vehicles in emerging markets.

Ford will transfer its India operations by way of a slump sale to the JV, including its personnel and assembly plants in Chennai and Sanand. Ford will retain the Ford engine plant operations in Sanand, as well as the Global Business Services unit, Ford Credit and Ford Smart Mobility.

J Sagar Associates advised Ford India. The firm’s core transaction team included partners Venkatesh Raman Prasad, Ronak Ajmera and Ashish Suman. The firm also advised on antitrust, tax, and land and labour issues. Ford Motor Company and Ford India were also represented by Hogan Lovells in the US.

Khaitan & Co advised Mahindra and the transaction team was led by partner Bhavik Narsana. The firm conducted a legal due diligence of Ford and advised on real estate and IP aspects. Cyril Amarchand Mangaldas advised Mahindra & Mahindra on Indian competition law. Linklaters provided English law advice to Mahindra.

Total and Adani Joint Venture

VALUEPRINCIPAL LAW FIRMS
N/AAllen & Overy
Clifford Chance
Cyril Amarchand Mangaldas
Trilegal

French oil and gas company Total and Adani will create a 50:50 JV to build a co-branded retail network of 1,500 service stations over 10 years. These service stations will offer Total’s full line-up of fuels and lubricants, as well as a broad range of other products and services. In addition, the JV will develop liquefied natural gas (LNG) regasification terminals, including Dhamra LNG, on the east coast of India. The acquisition forms the largest foreign direct investment in India’s city gas distribution sector to date.

This transaction marks an important foray by one of the world’s biggest energy and oil companies in India. CAM advised Adani and its promoters on the structure, legal and regulatory issues connected with the transaction under Indian law, and drafting, reviewing and negotiating definitive documents with Total. Clifford Chance also advised Adani. Trilegal acted as the Indian legal advisers to Total and were involved in negotiating and finalizing the transaction documents, providing regulatory advice and conducting due diligence, and Allen & Overy was international legal adviser to Total.

Capital marketsDisputesInsolvencyJoint venturesMergers & AcquisitionsOther

Mergers & Acquisitions


India leg of Disney’s 21st Century Fox acquisition

VALUEPRINCIPAL LAW FIRMS
US$71.3 billionAZB & Partners
Talwar Thakore & Associates

This mega acquisition of 21st Century Fox by the Walt Disney Company in March 2019 resulted in the creation of one of the largest media companies in India and the world. The merger required a clearance from the CCI in India and needed to be notified in several other jurisdictions including the EU, China and Australia.

AZB & Partners said the transaction was particularly challenging, given the parties’ combined market share in the English films segment and multiple overlaps between Disney and 21st Century Fox in several markets, including content production and distribution, retail TV, advertising, merchandising, gaming, and digital media and music.

The merger was able to obtain an unconditional phase I clearance from the CCI in a little over a month, while the transaction was subject to phase II scrutiny in the EU. AZB advised Disney on the Indian corporate and merger control aspects, while Talwar Thakore & Associates advised 21st Century Fox.

AZB was represented by partners Ashwath Rau and Roxanne Anderson. Talwar Thakore & Associates was represented by partner P Ram Kumar.

STAR DEALS

Merger of Gruh Finance and Bandhan Bank

VALUEPRINCIPAL LAW FIRMS
US$12 billionArgus Partners
AZB & Partners
Shardul Amarchand Mangaldas & Co

The merger of Bandhan Bank with Gruh Finance was one of the first involving a listed bank and a listed housing finance company. It was also one of the largest, as the combined entity was worth about US$12 billion. The merger provides Bandhan Bank with an entry into western India and the housing finance business. The merger was also required to meet the Reserve Bank of India’s private bank licensing guidelines, and the promoter had to lower his shareholding from 82% to 40%.

The legal teams developing the deal structure were working in a highly regulated space that covered the RBI, the National Housing Bank, NSE, BSE and NCLT. In addition, since the registered address of both entities were in two separate states, separate petitions were filed in the NCLT, in Mumbai and Ahmedabad.

Argus Partners advised Gruh finance, AZB & Partners advised Gruh’s promoter, HDFC, and Shardul Amarchand Mangaldas & Co advised Bandhan Bank.

GSK sells healthcare business to Unilever

VALUEPRINCIPAL LAW FIRMS
US$4.5 billionAZB & Partners
Baker McKenzie
Cyril Amarchand Mangaldas Slaughter & May

GlaxoSmithKline’s (GSK) divestment from Horlicks and other consumer healthcare nutrition brands to Unilever was the largest deal in the consumer goods space in India to date. The deal took place in December 2018 and was valued at ₹317 billion. The deal saw the merger of GSK Consumer Healthcare with Hindustan Unilever Limited (HUL).

The transaction was part of the global acquisition of the health food drinks portfolio of GSK by Unilever in India, Bangladesh and 20 other markets. The India leg of the deal was the most significant and contributed to 90% of the value.

Cyril Amarchand Mangaldas acted as legal counsel to HUL. The firm said the transaction involved close co-ordination between various teams including the deal team, competition team, IP team, tax team and litigation team, as well as with Baker McKenzie and other advisers across jurisdictions.” Baker McKenzie was legal adviser to Unilever.

AZB & Partners advised GSK Consumer Healthcare, and Slaughter & May advised GSK UK and other GSK groups.

Merck sells global health business to P&G

VALUEPRINCIPAL LAW FIRMS
US$4.2 billionCyril Amarchand Mangaldas
Freshfields Bruckhaus Deringer
Jones Day
Platinum Partners

Merck in November 2018 sold its global consumer health business to Procter & Gamble (P&G) for US$4.2 billion, making it one of the company’s largest disposals in recent years. In India, the transaction was carried out via: (1) the sale of Merck’s majority shareholding in Merck Limited, a publicly traded company in India; (2) a mandatory tender offer made by P&G to Merck Limited’s minority shareholders; and (3) the buyback of the non-consumer health business from Merck Limited, the Indian listed entity.

India was one of the most important jurisdictions for the deal given the size of the market. In addition, one of the manufacturing facilities was in India and the relevant Indian subsidiary was a listed company.

Freshfields Bruckhaus Deringer advised Merck and Platinum Partners advised the company on the Indian law aspects. Freshfields and Platinum Partners developed a variety of structuring options as Merck Limited was a listed company, and asset sales as well as related party transactions generally required the consent of the public shareholders.

From among the various options, Merck and P&G ultimately opted for the share sale and buyback structure, and it was successfully implemented in parallel with the global transaction.

Cyril Amarchand Mangaldas was the Indian adviser to P&G, while Jones Day also advised P&G.

STAR DEALS

UPL’s acquisition of Arysta LifeScience

VALUEPRINCIPAL LAW FIRMS
US$4.2 billionAppleby
Baker McKenzie
Cleary Gottlieb Steen & Hamilton
J Sagar Associates
Jones Day
Juris Corp
Platinum Partners

UPL Corporation made use of a US$3 billion syndicated acquisition financing facility to acquire Arysta LifeScience from Platform Specialty Products Corporation. The acquisition was made for US$4.2 billion and completed in February 2019. It was the largest outbound M&A by an Indian company since the 2008 global financial crisis.

The mandated lead arrangers were MUFG, Rabobank, ANZ, Barclays, DBS, First Abu Dhabi Bank, JP Morgan and Societe Generale, and there were more than 20 primary syndicate lenders on the acquisition.

Baker McKenzie acted as lead counsel and English counsel to the mandated lead arrangers. Juris Corp was Indian counsel and Appleby was Mauritius counsel to the mandated lead arrangers. Jones Day was lead and English counsel to UPL, while J Sagar Associates was Indian counsel to UPL.

UPL Corporation is the international arm of UPL, a generic agrochemical company with its headquarters in India. Arysta is a global provider of crop protection solutions.

Separately, Abu Dhabi Investment Authority (ADIA) and TPG made a US$1.2 billion joint equity investment into UPL. Cleary Gottlieb Steen & Hamilton served as counsel to ADIA and TPG, while Platinum Partners provided Indian counsel.

Hindalco Industries subsidiary acquires Aleris

VALUEPRINCIPAL LAW FIRMS
US$2.6 billionCMS Cameron McKenna
Fried Frank Harris Shriver & Jacobson
Latham & Watkins
Lydian

Novelis Inc in October 2019 acquired Aleris Corporation from a group of shareholders that included Oaktree Capital Management and Apollo Global Management. The deal required Novelis to pay US$775 million to Aleris shareholders. Novelis would acquire 13 manufacturing facilities across North America, Asia and Europe, as well as five research and development centres.

Novelis is a subsidiary of Hindalco Industries, which is India’s biggest flat-rolled aluminium producer and part of the Aditya Birla Group.

Latham & Watkins and Lydian represented Hindalco, while Aleris was advised by Fried Frank and CMS Cameron McKenna.

The deal will increase the production capacity of Novelis by nearly a quarter, to 4.4 million tonnes annually.

PFC’s acquisition of REC

VALUEPRINCIPAL LAW FIRMS
US$2.11 billionJ Sagar Associates
L&L Partners
Cyril Amarchand Mangaldas

The government’s sale of its entire 52.6% stake in REC to Power Finance Corporation (PFC) for ₹145 billion in March 2019 was one of the largest M&A transactions for the year.

Both PFC and REC are Navratna central public sector enterprises with combined revenues of about ₹500 billion, and the acquisition was a step towards consolidation of companies operating in the same space and a pre-cursor to the merger of the two power sector finance companies.

J Sagar Associates (JSA) advised the government on the deal. “The deal necessitated a massive and separate exercise to seek the consent of the US-dollar bondholders of REC, holding US$1.8 billion,” says Rohitashwa Prasad, a partner at JSA, which advised REC on this aspect.

Approvals were needed from the RBI and CCI, and an exemption was required from the SEBI for certain provisions of the Listing Obligations and Disclosure Requirements (LODR) regulations.

L&L Partners assisted PFC on all aspects of the transaction including drafting, negotiating and finalizing the share-purchase agreement and other associated documents with stringent timelines. This deal is a major milestone for PFC, which is now positioned to become a promoter and the holding company of REC. Cyril Amarchand Mangaldas advised REC on the matter.

STAR DEALS

Brookfield’s InvIT acquisition of Reliance arm

VALUEPRINCIPAL LAW FIRMS
US$1.9 billionAshurst
AZB & Partners
Khaitan & Co
Shardul Amarchand Mangaldas & Co
Trilegal

Private equity firm Brookfield Asset Management acquired from Reliance Industries a 100% equity interest in Pipeline Infrastructure Private Limited (PIPL) – which owns and operates the East West Pipeline for the transportation of natural gas from Kakinada (Andhra Pradesh) to Baruch (Gujarat) and covering approximately 1460km – for ₹130 billion through a sponsored infrastructure investment trust (InvIT).

This deal had many firsts, notably it was the first “white label” ‘InvIT (a business trust formed without an underlying asset) in India, the first listed InvIT with a foreign incorporated sponsor, the first to hold assets in the oil and gas sector in India, the first to have listed non-convertible debentures (NCDs) as a part of formation transactions. It was also the largest fundraise by an InvIT in India to date.

The deal was structured like a concession, and Reliance had entered into an agreement where it had reserved capacity in the asset and shall make annual payments to the asset, providing assured cash flows for a term of 20 years. The annual payments and consequent assurance of cashflows were proposed to provide annuity-like returns to the unitholders.

AZB & Partners advised the seller, Reliance Industries. Shardul Amarchand Mangaldas & Co advised Brookfield. Ashurst advised on negotiations with respect to the pipeline usage agreement executed with Reliance. Khaitan advised the lead manager of the InvIT offering, and Trilegal advised the lenders on the deal.

Larsen and Toubro’s acquisition of Mindtree

VALUEPRINCIPAL LAW FIRMS
US$1.5 billionAZB & Partners
Baker McKenzie
Cyril Amarchand Mangaldas

The acquisition of technology services company Mindtree by engineering giant Larsen & Toubro (L&T) in July 2019 was the largest hostile takeover of an Indian listed company to date and the first in the Indian IT sector. The takeover bid was publicly opposed by Mindtree’s existing promoters. However, L&T was able to acquire the additional stake through an open offer, and was able to acquire a controlling interest of 60%.

AZB & Partners advised L&T on all aspects of the transaction. Owing to L&T and Mindtree’s global presence, the transaction also triggered merger notifications in the US and Germany.

Baker McKenzie also advised L&T on its acquisition. The firm conducted multi-jurisdictional filing assessments and worked on the merger control filings for the transaction in Germany and the US, owing to the global presence of the acquirer and target company.

Cyril Amarchand Mangaldas advised the sellers, Coffee Day Enterprises Limited, Coffee Day Trading Limited and VG Siddhartha, the founder of Café Coffee Day.

After the takeover, Mindtree’s executive chairman, chief operating officer and managing director stepped down from their roles.

Vijaya and Dena banks merge with Bank of Baroda

VALUEPRINCIPAL LAW FIRMS
US$1.3 billionCyril Amarchand Mangaldas
Shardul Amarchand Mangaldas & Co
Surana & Surana International Attorneys

The amalgamation of Vijaya Bank and Dena Bank with Bank of Baroda in April 2019 made the latter the second-largest public sector bank and third-largest bank in the country. This constituted the first amalgamation of listed nationalized banks having public shareholders, and the first three-way merger of nationalized banks. The transaction was completed in record time since the approval from the board of directors of the three banks was in September 2018.

The amalgamation was laid before each house of parliament and approved by the Union Cabinet in January 2019. The merger was part of the government’s strategy to promote consolidation in the sector, which has been weighed down by non-performing assets.

Cyril Amarchand Mangaldas acted as legal counsel to Bank of Baroda. The firm drafted the amalgamation scheme and advised on various issues in relation to the integration of the three banks. Shardul Amarchand Mangaldas & Co (SAM) was legal counsel to Dena Bank and advised on all aspects relating to the merger. Surana & Surana International Attorneys was legal counsel to Vijaya Bank. The firms also carried out due diligence on the counterparties.

With the amalgamation, Bank of Baroda has more than 9,500 branches, 13,400 ATMs and 120 million customers.

Ctrip acquires MMT shares via share swap

VALUEPRINCIPAL LAW FIRMS
US$1.4 billionCravath Swaine & Moore
Latham & Watkins
S&R Associates
Shardul Amarchand Mangaldas & Co
Skadden Arps Slate Meagher & Flom
Trilegal

Chinese online travel company Ctrip.com increased its stake in Indian online travel site MakeMyTrip (MMT) through a share swap deal with South African technology investor, Naspers.

The swap deal involves Naspers transferring its stake in the Indian company for new shares in Ctrip, aggregating to about a 5.6% stake. The Chinese travel company would then own a 49% stake in MMT.

The transaction was a non-cash deal, and therefore drafting, negotiation and settlement of transaction documentation was unique from the standpoint of risk allocation between the parties.

Shardul Amarchand Mangaldas & Co was Indian counsel to Ctrip and advised on the transaction documents from an Indian law perspective, providing legal due diligence and general legal advisory on the corporate, structuring, tax, employment and competition matters concerning the transaction. Skadden Arps Slate Meagher & Flom was global counsel to Ctrip. Latham & Watkins was global counsel to MakeMyTrip, and S&R Associates was Indian adviser to the company. Trilegal advised Naspers on Indian law, while Cravath Swaine & Moore was global counsel to the seller.

Swiggy Series H financing

VALUEPRINCIPAL LAW FIRMS
US$1 billionCooley
Goodwin Procter
L&L Partners
Nishith Desai Associates
Shardul Amarchand Mangaldas & Co

One of India’s biggest food delivery platforms, Swiggy, raised US$1 billion in its Series H financing in December 2018, making it the largest in the country’s food technology sector to date.

The funding round was led by Naspers and included participation from existing investors such as DST Global, Meituan-Dianping and Coatue Management, along with new investors Tencent Holdings, Hillhouse Capital and Wellington Management.

Shardul Amarchand Mangaldas & Co advised Swiggy, while Nishith Desai Associates represented Naspers, L&L Partners advised Tencent, and Goodwin represented investment funds affiliated with DST Global and Hillhouse Capital Management.

The company planned to use the funds to add more food brands under the Access initiative. This involved subletting small, shared kitchens to restaurant chains that helped them to deliver to new areas through delivery-only kitchens. Swiggy also planned to use the capital to hire mid and senior-level talent for machine learning and engineering roles. It is also focused on building the next generation AI-driven platform for hyperlocal discovery and on-demand delivery.

The funding makes Swiggy the fifth most-valuable startup in India, valued at US$3.3 billion.

Etihad restructures investment in Jet Airways

VALUEPRINCIPAL LAW FIRMS
US$1 billionShearman & Sterling
Trilegal

Etihad Airways, a UAE-based airline, restructured its investment in the now-bankrupt carrier Jet Airways in a transaction that involved the provision of emergency financing and ongoing discussions to take Jet Airways out of the Indian insolvency process.

The deal was a high-profile case that involved interaction with various stakeholders in India and internationally, including banks, aircraft lessors, investors and employees. The foreign direct investment restrictions in India’s aviation industry meant that a resolution involved securing the co-operation of domestic partners. It also involved navigating through the Indian resolution process.

Shearman & Sterling was the adviser to Etihad Airways, while Trilegal was Indian counsel to Etihad.

Tata Steel’s acquisition of Usha Martin’s steel division

VALUEPRINCIPAL LAW FIRMS
US$657 millionArgus Partners
Khaitan & Co

Tata Steel’s acquisition of the steel division of Usha Martin Limited (UML) in April 2019 for ₹45 billion was one of the largest M&A deals in the past year outside the framework of the IBC.

UML’s steel business comprised a specialized 1 mtpa (million tonnes per annum) alloy-based manufacturing capacity in the long products segment, based in Jamshedpur, a producing iron-ore mine, an under-development coal mine and captive power plants.

“The acquisition was through a business transfer route, which was far more complicated than a share acquisition route,” says a spokesperson at Argus Partners. “The closing in a business transfer route needs to be defined post-commercial deliberations and negotiations, as the transfer of each piece of the business may happen separately. The deal perimeter includes a steel plant, an iron ore mine, a coal mine and a power plant.”

Argus Partners advised Tata Steel, while Khaitan & Co advised Usha Martin on the acquisition. The Argus team included lead partner Krishnava Dutt and partners Adity Chaudhury and Arka Majumdar.

Khaitan’s core transaction team included partners Haigreve Khaitan, Anuj Shah and Supratim Chakraborty. Khaitan also advised on real estate, mining, litigation, competition law and banking aspects.

Tata Steel Group is one of the world’s most geographically diversified steel producers, with operations in 26 countries and a commercial presence in more than 50 countries.

Nippon Life acquires equity shares from Reliance Capital

VALUEPRINCIPAL LAW FIRMS
US$646 millionAnderson Mori & Tomotsune
Khaitan & Co
L&L Partners

Nippon Life Insurance signed agreements with Reliance Capital in May 2019 to increase its stake in Reliance Nippon Life Asset Management (RNAM) to 75%. Reliance Capital would exit its stake from RNAM and make a simultaneous offer for sale to other financial investors fetching it ₹60 billion, which it would use to reduce its debt.

Prior to the agreement, both companies held 42% each, while the rest was with public shareholders. Nippon also made an open offer to public shareholders to reach the maximum permissible promoter shareholding of 75%.

Khaitan & Co advised Nippon Life Insurance and conducted the legal due diligence of RNAM and its subsidiaries. It provided a general advisory on the structure of the transaction, and assisted Nippon on regulatory approvals, open offer and stock exchange intimations.

“Due to Reliance Capital’s precarious financial situation, Nippon had to get involved with various lenders,” says a Khaitan & Co spokesperson. “A complex maze of part payment to lenders was established out of the share sale proceeds as a part of the transaction itself, and this was successfully unwound in a manner that protected the interests of Nippon Life as well as the lenders.” Anderson Mori & Tomotsune was foreign legal adviser to Nippon.

“The completion of this deal was significant for the lenders as well as Reliance Capital, given the current state of Indian banks and financial institutions, which are reeling under a liquidity crisis and ever increasing NPAs [non-performing assets],” says Anshuman Mozumdar, a partner at L&L Partners, which acted for Reliance Capital.

“Given the criticality of the transaction for the client and several lenders, the definitive documents were finalized within very short deadlines, with the team working around the clock on consecutive days to negotiate and finalize transaction documents.”

Brookfield buys Hotel Leela Ventures properties

VALUEPRINCIPAL LAW FIRMS
US$550 millionCleary Gottlieb Steen & Hamilton
Shardul Amarchand Mangaldas & Co
Veritas Legal

Debt-hit Indian hotel operator Hotel Leela Ventures sold its properties in Udaipur, Delhi, Chennai, Bangalore and Agra, along with its business of hospitality and hotel management operations, and related intellectual property, to private equity firm Brookfield Asset Management.

The US$550 million deal will go towards helping Hotel Leela Ventures wipe out its nearly US$1 billion of debt. The transaction involved the transfer of several assets by way of a slump sale of four hotel assets, along with a land parcel in Agra. The Leela trademark portfolio in the hotels and hospitality space, including with respect to certain high-profile and Michelin star restaurants, was also transferred to Brookfield.

This transaction had complex elements within real estate and employment. All the assets were fully leveraged, and therefore required co-ordination with the lenders. The deal was done while one of the lenders had filed bankruptcy proceedings against the company. Moreover, ITC Limited, a large hotel owner and a minority shareholder in Hotel Leela Ventures, complained to the SEBI against the sale on the grounds that it was against the interests of minority shareholders. The complaint was dismissed by the regulator.

Veritas Legal was adviser to Hotel Leela Ventures, while Shardul Amarchand Mangaldas & Co and Cleary Gottlieb Steen & Hamilton advised Brookfield.

Shapoorji Pallonji’s sale of renewable projects

VALUEPRINCIPAL LAW FIRMS
US$411 millionKhaitan & Co
Trilegal

Sprng Energy, a renewable energy platform set up by private equity fund Actis, acquired a 400MW portfolio of renewable energy projects from Shapoorji Pallonji Infrastructure.

It was a complex transaction that involved complying with “lock-in” restrictions under the power purchase agreements of certain projects, which allowed funds to be transferred while ensuring that control remained with the seller during the lock-in period. Trilegal was counsel to Actis on transactional representation and due diligence, while Khaitan advised Shapoorji Pallonji Infrastructure.

Blackstone invests in Aakash Educational Services

VALUEPRINCIPAL LAW FIRMS
US$190 millionClifford Chance
S&R Associates
Shardul Amarchand Mangaldas & Co
Trilegal

Blackstone in October 2019 picked up a 37.5% stake in the test prep education company, Aakash Educational Services, for ₹13.5 billion. The transaction involved the issuance of equity shares with differential voting rights (DVR).

Upon certain agreed events envisaged in the shareholders agreement, the DVR shares held by Blackstone Group may have voting rights, which are equal to 20 times the voting rights attached to each equity share. These will entitle the investors to exercise 51% of the voting rights in respect of
the company.

S&R Associates represented Aakash Educational Services and its promoters, while Trilegal advised Blackstone Group on M&A and transactional issues. Shardul Amarchand Mangaldas & Co and Clifford Chance also represented Blackstone.

ADCB’s sale of Indian banking business to DCB Bank

VALUEPRINCIPAL LAW FIRMS
US$67.6 millionBharucha & Partners
Cyril Amarchand Mangaldas

Abu Dhabi Commercial Bank (ADCB), a UAE-based bank, exited its Indian operations completely through the sale of its portfolio of assets and liabilities to Indian lender, DCB Bank. This deal was one of the few bank exits from the Indian market in recent times.

The deal involved the sale of fund-based facilities such as loans, cash credits and non-fund-based facilities such as bank guarantees, letters of credit and promissory notes.

The transaction had many moving parts that made the deal an extremely complex process in terms of structuring. The deal provided an exit to ADCB’s entire Indian banking business, which meant it ceased to exist within the Indian jurisdiction after the deal. This made the process of claiming post facto indemnity/compensation extremely difficult for DCB, so it required additional protection against contingent events.

ADCB’s exit envisaged the transfer of various kinds of assets and liabilities that are governed by different laws and regulations, making the transfer of each of these assets and liabilities substantially very different from each other. Since ADCB was a foreign bank and DCB was an Indian bank, the deal had to consider the interplay of the regulations that applied only to foreign banks with those that apply only to Indian banks.

The matter was time-bound and customer consents were crucial, particularly since ADCB’s primary set of clients were internationally located. The structuring advice also included guidance advice on the optimal way to receive consent from thousands of customers of ADCB.

Bharucha & Partners advised DCB Bank, and the firm’s team was led by Alka Bharucha and assisted by managing associate Ayesha Bharucha and associates Aishwarya Gupta and Shreyan Sengupta.

Cyril Amarchand Mangaldas was Indian counsel to Abu Dhabi Commercial Bank.

Capital marketsDisputesInsolvencyJoint venturesMergers & AcquisitionsOther

Other


Onshoring of Uber BV’s India business

VALUEPRINCIPAL LAW FIRMS
N/AAdvaita Legal
AZB & Partners

Uber BV, a private limited liability company registered in the Netherlands, transferred its rides and food delivery business to Uber India as part of a corporate restructuring. The move was the culmination of Uber’s global strategy, and meant to provide the Indian arm with greater flexibility.

AZB & Partners advised Uber on the transaction, competition law, tax and due diligence aspects of the deal.

Advaita Legal also advised Uber on the restructuring. The firm provided day-to-day handholding and strategic inputs from a GST perspective.

Uber’s India general counsel, Joyjyoti Mishra, led the in-house team on the matter. The deal was completed in October 2019.

Later in January, Uber sold its India food delivery business to restaurant aggregator Zomato.

STAR DEALS

ICICI Bank’s investigation into Chanda Kochhar

VALUEPRINCIPAL LAW FIRMS
N/AL&L Partners

Faced with allegations of quid pro quo deals made by its managing director and CEO, Chanda Kochhar, along with her husband, Deepak Kochhar, ICICI Bank was under pressure to conduct an impartial and independent inquiry. Investigations into the matter by the Central Bureau of Investigation and SEBI meant that “the inquiry had to be as comprehensive as possible and be completed in a time-bound manner,” says an L&L Partners spokesperson.

The bank appointed Justice BN Srikrishna as the head of enquiry to investigate the allegations. L&L Partners guided the forensic review process by tracking and reviewing the findings, and identifying additional issues to be examined in detail by the appointed forensic consultants.

“During the inquiry, extensive legal and strategic advice was provided to the HOE [head of enquiry]. The L&L team also conducted, along with the HOE, the investigative interviews of various executive and employees of the bank as part of the inquiry,” says the firm’s spokesperson. “[We undertook] a comprehensive review of company law, SEBI regulations, RBI circulars and the bank’s internal policies to address the myriad and complex legal issues, and the voluminous factual findings involved.”

ICICI Bank issued a statement in January 2019 that the enquiry report concluded that, “Primarily on account of ineffectively dealing with conflicts of interest and due disclosure or recusal requirements, that Chanda Kochhar was in violation of the ICICI Bank code of conduct, its framework for dealing with conflicts of interest and fiduciary duties, and in terms of applicable Indian laws, rules and regulations.”

ICICI said it treated Kochhar’s separation from the bank as a “termination for cause” under the bank’s policies.

Termination of CEO of multinational’s Indian subsidiary

VALUEPRINCIPAL LAW FIRMS
N/AClasis Law

Clasis Law worked with an Indian subsidiary of a US-headquartered multinational company for the termination of its senior management employee.

“The termination of employment had to be planned in a meticulous manner,” said Vikram Bhargava, a partner at Clasis Law. “The employee was the senior-most and longest serving official of the company in India.”

The firm advised the company on the termination options available, risks involved, monetary entitlements of the senior management employee, and the termination-related documentation. The firm also prepared template scripts for representatives of the company, for their meetings with the employees.

Assisting arrangement between clearing houses and exchanges

VALUEPRINCIPAL LAW FIRMS
N/AEconomic Laws Practice
Juris Corp

The SEBI in November 2018 had issued guidelines for interoperability among clearing corporations to improve utilization of margin and capital resources in the securities market. The guidelines envisaged linking the clearing corporations and allowing market participants to consolidate their clearing and settlement functions at a single clearing corporation, irrespective of the stock exchange on which they executed the trade. Prior to the guidelines, participants were required to take membership of a particular stock exchange and its clearing corporation.

Juris Corp acted as a counsel to the National Stock Exchange regarding the interoperability arrangement between the clearing corporations and other stock exchanges. The firm advised on the structure and workflow mechanism of the interoperability arrangement within the framework of the extant laws. It reviewed the bylaws, rules and regulations of the NSE and the requisite documentation in relation to the interoperability arrangement. Economic Laws Practice was legal counsel appointed by NSE Clearing Limited.

Ola’s UK launch

VALUEPRINCIPAL LAW FIRMS
N/AGarrigues
Mason Heyes & Curran
Taylor Wessing

Ola, an Indian cab hailing app operator, launched its transportation platform in 15 cities in the UK, each with a multitude of boroughs and councils with their own rules and regulations.

The cab hailing industry is under increasing regulatory scrutiny, and the regulations are complex. The law in this area is rapidly developing as it tries to keep pace with the dynamic technology and commercial models deployed by providers.

Taylor Wessing advised Ola on the UK regulations applicable to taxi businesses, as well as data protection, planning, commercial contracts and employment law, and covered a wide range of specialist areas including regulatory/licensing, financial services regulation, data protection, planning and employment law. Taylor Wessing’s German, Austrian, French and Netherlands offices advised on the respective regional regulatory issues, while Garrigues advised on Spanish and Portuguese regulatory issues, and Mason Hayes & Curran advised on issues in Ireland.

STAR DEALS

Star Deals

DEAL NAMELAW FIRMS CATEGORYVALUE
Merger of Gruh Finance Limited
and Bandhan Bank Limited
Argus Partners
AZB & Partners
Shardul Amarchand Mangaldas & Co
M&AUS$12 billion
Insolvency resolution of Essar SteelCyril Amarchand Mangaldas
L&L Partners
S&R Associates
Shardul Amarchand Mangaldas & Co
InsolvencyUS$7 billion
UPL’s acquisition of Arysta LifeScienceAppleby
Baker McKenzie
Cleary Gottlieb Steen & Hamilton
J Sagar Associates
Jones Day
Juris Corp
Platinum Partners
M&AUS$4.2 billion
Acquisition of Bhushan Power
and Steel by JSW Steel
Cyril Amarchand Mangaldas
L&L Partners
Shardul Amarchand Mangaldas & Co
InsolvencyUS$2.74 billion
Brookfield’s InvIT’s acquisition
of Reliance arm
Ashurst
AZB & Partners
Khaitan & Co
Shardul Amarchand & Mangaldas & Co
Trilegal
M&AUS$1.9 billion
Embassy Office Parks REIT initial public offeringClifford Chance
Cyril Amarchand Mangaldas
Latham & Watkins
S&R Associates
Simpson Thatcher & Bartlett
Capital marketsUS$670 million
McDonald’s dispute with Indian JV partnerS&R AssociatesDisputesN/A
Defence of constitutionality of the IBCAgarwal Law Associates
AZB & Partners
Cyril Amarchand Mangaldas
Shardul Amarchand Mangaldas & Co
Udit Kishan & Associates
DisputesN/A
Supreme Court strikes down RBI circularAggarwal Law Associates
J Sagar Associates
Link Legal India Law Services
DisputesN/A
ICICI Bank’s investigation into Chanda KochharL&L PartnersOtherN/A