tag:blogger.com,1999:blog-3202774368551476669.post7861359768532323968..comments2023-09-15T16:21:31.980+05:30Comments on INDIAN CORPORATE LAW: Legality of Derivatives: Emerging SignsUmakanth Varottilhttp://www.blogger.com/profile/12438677982004444359noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3202774368551476669.post-81713652386302825732008-10-16T00:11:00.000+05:302008-10-16T00:11:00.000+05:30It may be of interest that the first case in India...It may be of interest that the first case in India challenging the Derivative Contracts was filed in the Madras High Court in a case concerning Sundaram Brake Linings and Kotak Bank. The company challenged that the derivative contracts were opposed to public policy, wagering contracts and that they were therefore liable to be struck down as being illegal. We had appeared for the Bank and argued that since there was an arbitration clause in the ISDA master agreement (International Swap Dealers Association), the Court will have no jurisdiction to even entertain the suit. An interesting issue was raised on the applicability of Section 8 of the Arbitration & Conciliation Act, 1996 in a situation where the very contract is challenged on the ground of being opposed to public policy or that it was a wagering contract. The court in a detailed judgment which now a reported case, held that the law in India was made to promote arbitration and hence it had no jurisdiction to entertain the dispute and made a distinction between Section 45 and Section 8 of the Arbitration & Conciliation Act, 1996 and relegated parties to arbitration.Karthik Seshadrihttps://www.blogger.com/profile/08818529509366717555noreply@blogger.com