tag:blogger.com,1999:blog-3202774368551476669.post5827255183231043560..comments2023-09-15T16:21:31.980+05:30Comments on INDIAN CORPORATE LAW: Confidentiality Agreements in M&A TransactionsUmakanth Varottilhttp://www.blogger.com/profile/12438677982004444359noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-3202774368551476669.post-40945080692113978822015-11-25T09:31:02.721+05:302015-11-25T09:31:02.721+05:30IMPROMPTU
Attention is drawn to the published arti...IMPROMPTU<br />Attention is drawn to the published article, -<br />Dual-Track M&A/IPO Gain Popularity in Health Care Sector <br /> The dual-track process has been growing in popularity among health care companies, since the IPO process can be helpful... READ MORE »<br /><br />The subject write-up herein, on the other hand, discusses the trend of opinion lately being given by courts on the significantly novel idea of ‘confidentiality agreement (s)’ in relation to M &A transactions.<br />On the first blush that is seen to deal with the propriety or legality, so much so its enforceability in a court of law, of any such agreement of ‘confidentiality’, in order to become operative and being acted upon outside / independent of the commonly known, - regular and normally entered into legal documents, for effectuating any ‘merger and acquisition’ in the corporate world. As independently viewed, to say the least, this is another instance of corporate deciding to ‘test-the-waters’. The idea, howsoever strikingly odd that be, is noted to have passed the muster, if were to infer from the judicial thinking , as observed from the cited court cases. <br />In this context, one perforce comes to think of like past instances in which the very basic, and fundamental , ideals of the age-old concept- ‘contract’- have been attempted, also successfully in a limited way, tweaked, mangled, and gone ahead with. For example, consider stipulations, in-built though, cryptically described as ‘agreement to agree’ (possibly implying, - ‘agreement not to agree’, as well). For more, look-up , -<br />INDIAN CORPORATE LAW: Agreements to Agree<br />indiacorplaw.blogspot.com/2013/05/agreements-to-agree.html<br /><br />In this scenario, obviously, it is now wholly left to the judiciary to decide, on a case to case basis, as to whether to permit, and within what parameters, such attempts to make inroads into the concept of ‘contract’ as originally conceived of and historically covered in the statutory or common law governing contracts. It is here that the judiciary will be faced with the onerous task of calling to aid and prudently applying, besides any other, the broad rule of interpretation, “Updating Construction”.<br /><br />To dilate:<br />Statutory interpretation by Francis Bennion, 2nd Edn. section 288, with the heading ‘Presumption that updating construction to be given’ states one of the rules thus (page 617): <br />It is presumed that Parliament intends the court to apply to an ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law.<br />The (concluding) suggestive observation, - “Although these cases are set in the US context, they would have some relevance to parties in conceptualizing and drafting confidentiality agreements in Indian M&A transactions.”, cannot be taken seriously, without having regard to the foregoing and other related aspects, particularly obtaining in the current scenario; and in any case, has to be considered and taken forward, if so tempted, with the utmost circumspection as warranted. <br />vswaminoreply@blogger.comtag:blogger.com,1999:blog-3202774368551476669.post-30571503662614136392015-11-25T00:47:43.111+05:302015-11-25T00:47:43.111+05:30After 4 years, Law in Perspective on your Blog Rol...After 4 years, Law in Perspective on your Blog Roll finally has a post dated 7th November, 2015! Why this long gap!Anonymousnoreply@blogger.com