Tag: study law open university

Categories
Blog

Development of Cybercrime Law in the United Kingdom

Development of cybercrime law in the United Kingdom

The enactment of computer crime specific legislation or cybercrime law in the United Kingdom can be attributed to a number of cases which highlighted the issue of absence of such legislation and the subsequent acquittal of individuals.

R v. Thompson

Firstly, in R v. Thompson,[1] the appellant in Kuwait, had fraudulently caused a bank to credit certain bank balances in England. The access was authorized, however, such access was used for an unlawful purpose. The Theft Act of 1968 was sought to be applied[2]. The primary issue was that of jurisdiction (Kuwait or England) as well as identifying the victim. The court held that for applying the Theft Act, the identification of a human victim is a prerequisite. However, in the present case, the computer system was deceived, rather than a human mind. This highlighted the inadequacy of the existing legal framework to deal with cases where computer was a victim of a crime, rather than a mere facilitator.

R v. Gold and Schifreen

Secondly, in R v. Gold and Schifreen,[3] certain individuals got access to the files contained in British Telecom Prestel Network by seeing the username and password entered by the authorized person, over his shoulders. The accused were charged under the Forgery and Counterfeiting Act of 1981. However, the court held that the accused cannot be prosecuted under the said Act as the use of recorded electronic information did not fall under the definition of ‘false instrument’[4]. Therefore, the act committed by the accused does not come under the ambit of the Forgery and Counterfeiting Act. The outcome of this case highlighted that new age crimes (cybercrimes) cannot be prosecuted under the traditional criminal laws.

Learn more about Cyber Laws with Enhelion’s Online Law firm certified Diploma Course on Cyber Law.

It is pertinent to note that there were a series of case laws wherein the court adopted a more liberal approach to include the new age crimes within the ambit of traditional laws. In Cox v. Riley,[5] the court held that ‘damage’ implies any injury impairing the value and usefulness. Such injury need not be apparent to the naked eyes. Therefore, deleting program from a computer-controlled machine, which renders it unusable, constitutes ‘damage’ under the Criminal Damages Act, 1971. A similar approach was adopted in R v. Whiteley[6].

The increasing instance of computer crimes, the failure of court to effectively prosecute individuals who committed computer crimes, and the significance of ensuring effective prosecution by broadening the scope of existing laws, had a combined effect which led to the enactment of the Computer Abuse Act of 1990[7] in the United Kingdom.

Originally, the 1990 Act brought within its ambit, three categories of offences-

  1. Unauthorized access to programs or data[8];
  2. Unauthorized access with further criminal intent[9] and
  3. Unauthorized modification of data[10].

In Ellis v. DPP,[11] section 1 of the Act was interpreted, and the court held that unauthorized access, even though in absence of damage, comes under the ambit of the 1990 Act.

Learn more about Cyber Laws with Enhelion’s Online Law firm certified Diploma Course on Cyber Law.

The 1990 Act addressed the issue of jurisdictional challenge in cases of computer crime by making it an offence to use a computer in the home country to commit a crime in another country and to commit a crime in the country from a computer in another country[12].

It is pertinent to note that the 1990 Act was not well equipped to deal with computer crimes per se in a comprehensive manner. The issue with respect to section 2 of the Act was highlighted in R v. Bedworth[13], wherein while proving intent, addiction was recognized as a defense. As a result, the Jury acquitted the accused.

Learn more about Cyber Laws with Enhelion’s Online Law firm certified Diploma Course on Cyber Law.

[1] R v. Thompson, (1984) 79 Cr App R 191.

[2] Theft Act, 1968, § 15.

[3] R v. Gold and Schifreen, CACD [1987] QB 1116.

[4] Forgery and Counterfeiting Act, 1981, s. 8(1)(d).

[5] Cox v. Riley, [1986] QBD.

[6] R v Whiteley, [1991] 93 CAR 25.

[7] Computer Abuse Act, 1990.

[8] Id., § 1.

[9] Supra note 18, § 3.

[10] Supra note 18, § 2.

[11] Ellis v. DPP, [2001] EWHC 362.

[12] Supra note 18, § 4.

[13] R v. Bedworth, 1991.

Categories
Blog

Development of Telecommunication Law in British India

The communications system forms the basis of the economic development of a country and plays a key role in every aspect of an individual’s life. The communications system in India has come a long way from the use of telegrams in the 1850s to the extensive use of the Internet in the present times. It is pertinent to note that the foundation of telecommunications in India was laid by the British East India Company (referred to as ‘EIC’ hereafter), and was later developed by the British Government, under the British Crown.

  • Development of Telegraph services under the British regime

Research in the field of telegraph started in India way back in 1833 when a 24-year-old assistant surgeon with the East India Company (EIC), Mr. William O’Shaughnessy, started experimenting with electricity.[1] In 1839, he set up a 13.5-mile-long demonstration telegraph system near Calcutta.[2] During the same time, Samuel F.B. Morse was developing his own demonstration system back in the United States.[3] However, O’Shaughnessy was completely unaware of this development, and therefore, used a different code which was indigenously developed. On successful experimentation, he published a pamphlet about his work, but he was unable to catch the attention of the EIC.

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

The state of affairs changed in 1847 when Lord Dalhousie was appointed as the Governor-General of India.[4] He showed real interest in developing public works like roads, canals, railways, and postal services in India. He also envisioned the potential of the telegraph invented by O’Shaughnessy and authorized him to build a 30 miles long line near Calcutta. This was the first experimental electric telegraph line in India which started between Calcutta and Diamond Harbour in 1851[5]. The success of this electric telegraph line incentivized Lord Dalhousie to authorize O’Shaughnessy to build telegraph lines across India.[6]

O’Shaughnessy completed the work assigned to him by 1854, and as a result, Calcutta was linked to Agra, Bombay and Madras by the telegraph network.[7] From 1851 till 1854, the telegraph was strictly limited to use by the EIC. In April 1854, first telegram was sent from Mumbai to Pune and electronic telegraph facilities were made open to use by the public[8]. Taking these developments and the subsequent need for legislation to regulate the establishment and management of electronic telegraphs in India into consideration, the Electronic Telegraphs Act of 1854[9] was enacted. The 1854 Act provided exclusive right to establishing telegraph lines in India to the EIC, however, the Governor-General of India in Council was given the power to grant the license to any person or company to establish a line[10]. The Act further established a separate Electric Telegraph Department[11]. The Act penalized the laying down of telegraph lines in contravention of the provisions of the Act.[12] It also penalized the persons who willfully caused interruption to the transmission of signals[13].

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

The development of the telegraph system continued and by 1856, 4000 miles of Indian telegraph system was established connecting Calcutta, Agra, Bombay, Peshawar, and Madras.[14] It is believed that the Indian telegraph service played an instrumental role in suppressing the 1857 sepoy mutiny.[15] It proved to be a critical military tool by rapidly providing a reliable system of information which was used by the EIC to mobilize its troops. Owing to the significance of the telegraph network in suppressing the 1857 revolt, a number of Indians tried to destroy the same as an act of vengeance.[16]

The 1857 sepoy mutiny led to a significant change in power in the Indian colony. The Electric Telegraph Act of 1854 was repealed, and the Telegraph Act of 1860[17] was enacted to reflect the shift of power from British EIC to the British Crown. The 1860 Act brought two significant changes to its predecessor. Firstly, it gave the exclusive power previously enjoyed by the EIC to the Governor-General of India in Council[18]. The Governor-General also retained its power to grant licenses to private individuals and companies for establishing the telegraph lines. Secondly, considering the attempts of Indians to destroy the telegraph network post-1857 revolt, the Act of 1860 increased the number of penalties for intruding into the signal room[19] and cutting the line[20].

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

The developments in the telegraph system in India were accelerated once submarine cables were completed between India and Britain in 1870.

The next significant step in the evolution of communications services in India was the enactment of the Indian Telegraph Act of 1876[21], which repealed the 1854 Act[22]. The 1876 Act was applicable to the whole of British India as well as British subjects in the Princely States[23]. The Act is considered as the first comprehensive legislation regulating telegraph services in India. It defined the terms like ‘telegraph’, ‘telegraph officer’ and ‘message’[24]. ‘Telegraph’ was defined as an electric or magnetic telegraph[25]. Just like the 1854 Act, the Governor-General retained his power of exclusive privilege and the right to grant a license under the 1876 Act.[26] The Act further increased the penalties for causing destruction to the telegraph network. The most peculiar feature of the 1876 Act was the provision for the deployment of additional police in places where mischief to telegraphs was repeatedly committed[27]. In such a scenario, the inhabitants of such a place were required to bear the cost of such deployment[28].

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

After the 1876 Act came into force, in 1880, two private telephone companies namely Oriental Telephone Company Ltd. and The Anglo-Indian Telephone Company Ltd. approached the Governor-General of India to propose establishing telephone exchanges in India.[29] They were denied permission on the ground that the introduction of telephones was a Government monopoly and hence the Government itself would commence the work.[30] However, in 1881, the decision was reversed and Oriental Telephone Company Ltd. was granted a license for opening telephone exchanges at Kolkata, Mumbai, Chennai and Ahmedabad. The telephone came to India a little later in 1882.[31]

In 1883, the telegraph services were combined with postal services.[32] In the meanwhile, a Bill proposing the repeal of the 1876 Act was tabled to the Council. The Bill suggested modification of the definition of ‘telegraph’ to be in consonance with the developments in Britain. It also suggested the creation of a new category of penalties. This led to the enactment of the Telegraph Act of 1885[33]. The Act broadened the definition of ‘telegraph’ to include “appliances and apparatus for transmitting or making telegraphic, telephonic or other communications by means of electricity, galvanism or magnetism”[34]. The Act also created a Telegraph Authority, which meant the Director-General of Telegraphs and included any officer empowered by him[35]. Just like its 1860 and 1876 predecessors, the Governor-General enjoyed the exclusive privilege and the right to grant a license under the 1885 Act as well. The Act further granted the power to Government to take possession of licensed telegraphs to intercept messages[36].

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

In 1888, overseas communications were merged with the Director-General of the Indian Telegraph Department.[37]

The next significant development took place in 1902 when cable telegraphs were changed to wireless telegraphs.[38] Therefore, in 1902, the Indian telegraph services went wireless. Furthermore, in 1914, a big administrative change happened. The Postal Department and the Telegraph Department were amalgamated under a single Director-General by amending the definition of ‘telegraph authority under the 1885 Act[39].

The 1885 Act underwent a number of changes in the years 1914, 1930 and 1937. As per the amendment of section 4 in 1914, the Government was given the power to establish and maintain wireless telegraphs on ships within Indian territorial waters and telegraphs other than wireless telegraphs[40]. This provision was further amended in 1930 to include the use of wireless telegraphy on aircraft[41].

  • Development of Radio broadcasting services under the British regime

Respect to radio broadcasting, broadcasting was introduced as a private venture through radio clubs in Calcutta, Madras, Bombay and Lahore in 1923 and 1924.[42] In June 1923, the Radio Club of Bombay made the first-ever broadcast in India. In 1927, Calcutta Radio Club was established. During this time period, there was a daily broadcast of 2-3 hours of music and talks. However, most of these stations faced liquidation within three years of their establishment due to insufficient finances.[43]

The year 1927 also witnessed an agreement between the Government and a private company named Indian Broadcasting Company Ltd. (IBC).[44] This agreement led to the setting up of the Broadcasting Service which began broadcasting in 1927 on an experimental basis in Bombay and later in Calcutta. However, IBC faced liquidation within 3 years of its establishment.[45] The government acquired its assets and established the Indian Broadcasting Service under the Department of Labour and Industries.[46] Since then, broadcasting has remained under the control of the Government in India.

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

Following the establishment of the Indian Broadcasting Service, in 1935, Lionel Fielden was appointed the first Controller of Broadcasting.[47] In the same year, a private radio station, Akashvani Mysore, was set up.[48] In 1936, a radio station was commissioned in Delhi.

The next significant step in the development of radio broadcasting services in India was the renaming of the Indian State Broadcasting Service as ‘All India Radio’, or AIR in June 1936.[49] A new signature tune was added to AIR. The Delhi radio station, established in the same year, became the nucleus of broadcasting at the national level. In 1937, AIR was brought under the Department of Communications and in 1941, under the Department of Information and Broadcasting. The Department of Information and Broadcasting was again changed to the Department of Information and Broadcasting (I&B) on 10th September 1946.[50]

Radio broadcasting underwent considerable developments during World War II. By 1939, the entire country was covered by short-wave service. Taking into account the outbreak of World War, the programme structure of radio underwent a change to meet wartime contingencies. News and political commentaries were introduced and special broadcasts were made for the people on the strategic north-eastern and north-western borders.

  • Regulation of Wireless Telegraphy in the British regime

Wireless telegraphy in India developed in line with the development of radio services. One of the major sources of revenue for the Indian State Broadcasting Service was revenue from the licence fee for working of wireless apparatus under the Indian Telegraph Act, 1885. Owing to the lack of legislation dealing with the unlicensed use of wireless apparatus, the Indian State Broadcasting Service faced substantial revenue losses. To deal with the unlawful possession of wireless telegraphy apparatus, the Indian Wireless Telegraphy Act of 1933[51] was enacted.

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

The 1933 Act defined terms like ‘wireless communication’ and ‘wireless telegraphy apparatus.[52] The Act prohibited the possession of wireless telegraphy apparatus without a license under section 4. The telegraph authority under the Indian Telegraph Act of 1885 was given the power to issue licenses to possess wireless telegraphy apparatus under the Act[53]. The act of possession of wireless telegraphy apparatus without a license was made a punishable offence[54].

  • The relevance of Communication Laws enacted in the British regime after the coming into force of the Constitution of India in 1950

When India became independent, there were over 7000 telegraph offices and about 300 state-owned telephone services, across the country. Furthermore, there were 6 AIR stations at Delhi, Bombay, Calcutta, Madras, Lucknow and Tiruchirapalli, with 18 transmitters, among which six were on the medium wave and the remaining were on short wave.

The legal regime governing the telecommunications sector in India developed to a considerable extent after independence owing to technological changes, however, it is pertinent to note that the government decided to adopt certain key legislation relating to the telecommunications sector which was in force during the British regime. The most significant adoption was the exclusive privilege over the telegraph service and right to grant a license, enjoyed by the Government over the telecommunications sector in the British regime. This status was adopted in the Constitution of India by virtue of Entry 31 of List I in Schedule 7 which puts ‘posts and telegraphs, telephones, wireless, broadcasting, and other like forms of communications’ in the exclusive domain of the Union List[55]. The then Prime Minister of India, Jawaharlal Nehru, was also of the opinion that the telecommunication sector should be retained by the Central Government owing to its criticality to the development of India.

The Telegraph Act of 1885 was amended in the year 1948 to substitute the word ‘Provinces’ with ‘India’[56]. Although the definition of ‘telegraph’ has been amended in the subsequent years to ensure that technological development does not leave out certain services from being regulated by the state, however, the basic premise of the 1885 Act has remained intact over the years.

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

The Wireless Telegraphy Act, 1933 too is still in existence and retains most of the provisions of the original Act.

With respect to radio broadcasting services, All India Radio is in existence even today, under the control of the Ministry of Information and Broadcasting.

Therefore, the British regime did not only help India in laying the infrastructural foundations of communications, it also helped to develop a legal regime governing the same. This legal regime is still operational, with certain amendments aimed at adopting the dynamic nature of technology.

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

[1] John H. Lienhard, Indian Telegraph, https://www.uh.edu/engines/epi1380.htm (last visited Apr. 20 2021).

[2] Id.

[3] Indian telegraph Service, INDIAN PHILATELY, http://www.indianphilately.net/indiantelegraph.html (last visited Apr. 20 2021).

[4] Lienhard, Supra note 1.

[5] Development of posts and telegraph during the British rule, https://madhyapradesh.pscnotes.com/modern-history/development-of-posts-and-telegraph-during-the-british-rule/ (last visited Apr. 20 2021).

[6] Lienhard, Supra note 1.

[7] Supra note 3.

[8] Maninder Dabas, Today in 1854, first telegrpoh was sent in India, INDIA TIMES (Apr, 27, 2017, 4:15 PM), https://www.indiatimes.com/news/today-in-1854-first-telegram-was-sent-in-india-between-mumbai-and-pune-here-is-all-about-the-telegraph-service-that-ende.

[9] Electronic Telegraphs Act, 1854, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in116en.pdf.

[10] Id, § 1.

[11] Supra note 9, § 7.

[12] Supra note 9, § 2.

[13] Supra note 9, § 9.

[14] Lienhard, Supra note 1.

[15] Michael Mann, The deep digital divide: The telephone in British India, 35(1) HISTORICAL SOCIAL RESEARCH 188, 200 (2010).

[16] Id.

[17] Telegraph Act, 1860, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in117en.pdf.

[18] Id, § 2.

[19] Supra note 17, § 9.

[20] Supra note 17, § 10.

[21] Indian Telegraph Act, 1876, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in118en.pdf.

[22] Id, § 2.

[23] Supra note 21, § 1.

[24] Supra note 21, § 3.

[25] Id.

[26] Supra note 21, § 4.

[27] Supra note 21, § 16.

[28] Id.

[29] Gopika G G, Growth and development of telecom sector in India- An overview, 16(9) IOSR-JBM 25, 26 (2014).

[30] Id.

[31] Id.

[32] Id.

[33] Telegraph Act, 1885, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in119en.pdf.

[34] Id, § 3(1).

[35] Supra note 33, § 3(6).

[36] Supra note 33, § 5.

[37] Id.

[38] Gopika G G, Growth and development of telecom sector in India- An overview, 16(9) IOSR-JBM 25, 33 (2014).

[39] Supra note 33, § 3(6).

[40] Act 7 of 1914.

[41] Act 27 of 1930.

[42] Growth and development, PRASAR BHARTI, https://prasarbharati.gov.in/growth-development-air/ (last visited 20 Apr. 2021).

[43] Id.

[44] Alasdair Pinkerton, Radio and the Raj: Broadcasting in British India (1920-1940), 18(2) JOURNAL OF THE ROYAL ASIATIC SOCIETY 167, (2008).

[45] Id. at 175.

[46] Id.

[47] Id.

[48] Supra note 42.

[49] K.C. Archana, 80 years of AIR: Remembering the golden days of All India Radio, INDIA TODAY (June 8, 2016, 3:51 PM), https://www.indiatoday.in/fyi/story/80-years-of-air-remembering-the-golden-days-of-all-india-radio-12987-2016-06-08.

[50] Id.

[51] Indian Wireless Telegraphy Act, 1933, available at https://www.wipo.int/edocs/lexdocs/laws/en/in/in037en.pdf.

[52] Id. § 2.

[53] Supra note 51, § 5.

[54] Supra note 51, § 6.

[55] Constitution of India, 1950, Schedule VII, List I, Entry 31.

[56] Act 45 of 1948.

Categories
Blog

Development of Cybercrime Law in the European Union

At the European Union level, although the possibility of having a comprehensive legal framework dealing with cyber crimes was not a far stretched idea owing to the cooperation at the Union level, however, this idea was not considered until the late 1990s.

Taking into account the growing incidents of cyber crimes, their peculiar nature, and the essential element of international cooperation in this regard, a series of initiatives were taken at the EU level in the form of recommendations and Council conclusions. This was followed by the first legislative proposal by the Commission in early 1998 to deal with certain aspects of computer crimes, i.e. credit card frauds and forgery of non-cash means of payment. However, it was only in May 2001 that the Framework Decision on Combating Fraud and Counterfeiting of Non-Cash Means of Payment was adopted.[1]

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

During the same time, the Council of Europe was taking a number of steps and engaging in negotiations, in collaboration with the G8 countries, USA, Canada, Japan, United Kingdom, Germany, France, Italy, and Russia, with respect to judicial cooperation in this field.  As a result, an agreement was reached in 1997 pertaining to an action plan to combat high-tech and computer-related crimes. One of the action plan’s initiatives is the 24/7 network of law enforcement contact points to combat cybercrime, which is now a part of the current legal framework at the EU level. This network furthers the objective of international cooperation, specifically with respect to the investigation of cybercrimes.

In October 1999, the G8 met again as a follow-up measure of the action plan. This follow-up concluded that the biggest roadblock in combating computer crimes is the identification and tracking of criminals in cyberspace. To overcome this roadblock, many principles were adopted to ensure transnational access to data, simplified mutual assistance, and general permission to access publicly available material in another state without express permission. These principles now form the basis of the current legal regime at the EU level[2].

Meanwhile, the European Committee on Crime Problems[3] (CDPC) decided to set up a committee of experts to deal with cyber-crime in November 1996. Subsequently, the Report submitted by Professor H.W.K. Kaspersen concluded that “it should be looked to another legal instrument with more engagement than a Recommendation, such as a Convention. Such a Convention should not only deal with criminal substantive law matters but also with criminal procedural questions as well as with international criminal law procedures and agreements”.[4]

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

Taking into account the Report submitted to the CDPC, the Council of Europe was successful in formulating the Convention on Cybercrime[5], with an aim to bring minimum harmonization in the acts termed as ‘cybercrime’ in the Member States of the EU.

The Explanatory Report of the Cybercrime Convention highlights the changing nature of crimes and the subsequent need to develop a legal framework to prosecute such crimes exclusively. It states that-

“The technological developments have given rise to unprecedented economic and social changes, but they also have a dark side: the emergence of new types of crime as well as the commission of traditional crimes by means of new technologies.[6] Criminals are increasingly located in places other than where their acts produce their effects. However, domestic laws are generally confined to a specific territory. Thus, solutions to the problems posed must be addressed by international law, necessitating the adoption of adequate international legal instruments”.[7]

The Convention on Cybercrime adopts a holistic approach in dealing with both substantive and procedural aspects[8] of cybercrimes at the EU level. Section 1 of Chapter II covers both criminalization provisions and other connected provisions in the area of computer or computer-related crime by defining nine offences (illegal access, illegal interception, data interference, system interference, misuse of devices, computer-related forgery, computer-related fraud, offences related to child pornography and offences related to copyright and neighbouring rights) grouped into four different categories (offences against the confidentiality, integrity and availability of computer data and systems, computer-related offences, content-related offences and offences related to copyright and neighbouring rights)[9]. It further deals with ancillary liability and sanctions[10].

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

Furthermore, the Convention also contains provisions for traditional as well as computer crime-related mutual assistance and extradition.[11] It also provides for transborder access to stored computer data without mutual assistance, either with consent or without consent, in the case of publicly available data. It also provides for the setting up of a 24/7 network to ensure speedy assistance among the Parties.

Lastly, at the Union level, to address the issue of cooperation at, the Union level, the European Network and Information Security Agency (ENISA) was established in 2004. ENISA was given the responsibility to develop expertise to enhance cooperation between public and private sectors and provide assistance to the Commission and Member States of the EU in their dialogue with industry for the purpose of addressing security-related problems in hardware and software products. It was also required to promote risk assessment activities as well as interoperable risk management routines.[12]

Learn more about Technology Law with Enhelion’s Online Law firm certified Master Course! 

[1] EUR-Lex, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32001F0413 (last visited May 3, 2021).

[2] These principles can now also be found in the Cybercrime Convention.

[3] Decision CDPC/103/211196.

[4] Salaheddin J. Juneidi, Council of Europe Convention on Cyber Crime, IPICS (2002).

[5] The Cybercrime Convention.

[6] Explanatory Report to the Cybercrime Convention, part I(5).

[7] Explanatory Report to the Cybercrime Convention, part I(6).

[8] Supra note 29, chapter II, § 2.

[9] Supra note 29, chapter II, § 1.

[10] Supra note 29, chapter II, §1, title 5.

[11] Supra note 29, art. 25.

[12] ENISA, https://www.enisa.europa.eu/ (last visited May 6, 2021).

Categories
Blog

Rule Of Law in Globalising World

The concept of rule of law finds its origin in the rulings of Chief Justice Sir Edward Coke[1] wherein he emphasised the significance of the King being under the law. However, it was only later that A. V. Dicey in his book: Introduction to the study of the Law of the Constitution, 1885[2], tried developing the concept further. He identified three components of the rule of law[3]–

  1. The supremacy of law
  2. Equality before law
  • Constitution as a result of ordinary law of the land (signifying the relevance of judge-made laws in England)

These components ensured that the rule of law acted as a constraint on the arbitrary exercise of power by the sovereign over its subjects. Therefore, his primary focus was on the way in which the law was made, applied, and enforced (process-focused approach), rather than the actual content of the law (end-focussed approach). This creates a lot of confusion with respect to the applicability of the rule of law. Modern democracies are founded on this principle, however, there are contrasting convictions about what ‘law’ is/should be.

Previously, the concept of rule of law was limited in its application to the sovereign territory of the state as the interactions were primarily intranational. However, over a period of time, with the advent of technology and the movement of people, goods and services across borders, such interaction became international, leading to cross-border disputes. Through the process of globalization, “political, economic, and technological changes have had globalizing ramifications that penetrate state borders in ways that transformed the core rule of law values in the international legal order and have created a shift away from the previously prevailing state-centric system.”[4]

With respect to the applicability of rule of law at the international level, globalisation has made the world one single market where individual and state entities interact with other individuals and entities on a daily basis. Therefore, such interaction cannot be left unchecked with respect to the foundation principle of the legal system i.e. the rule of law. Hence, there is a need to transpose the principle of rule of law, internationally, in light of the globalized world. The significance of rule of law at the international level in the era of globalisation has been pointed out a number of times[5].

However, this transposition is easier said than done. There are some inherent issues in applying the principle globally. Firstly, with respect to whether such a principle, which was originally developed to be applicable to the national legal system, can be applied to the international legal system, in the absence of a central sovereign authority. Secondly, if the answer to the first issue is affirmative, does such international application require a reconceptualization of the original concept of rule of law in order to adapt it to the legal issues arising at the international level. Thirdly, should the international rule of law be limited in its application with respect to the relationship of different sovereign nation-states, or should it also be applied to the relationship of different individuals who are subjects of such nation-states?

The first roadblock towards the applicability of the principle of rule of law in the globalised world today encompasses the fact that there is no common sovereign power in the international arena. There is United Nations, however, the international law establishing such an institution, is a soft law in itself. Besides, it is left to the discretion of the nation-states to decide whether they wish to be a part of the U.N. Since there is no common sovereign, it is often contented by scholars that the rule of law cannot meaningfully exist in the international arena.[6] This further entails the difficulty in ascertaining what constitutes “law” in the international context since there is no “one” sovereign, and no “one” law regulating the conduct of individual nation-states.

Secondly, the Dicean concept of rule of law highlights a very narrow and process-focused approach. Such a framework will not satisfy the end objective of rule of law at the international level, with respect to acting as a constraint against the gross violation of the fundamental human rights of the individuals by the sovereign states. Therefore, the rule of law, when transposed to the international level, should not only be process-oriented but also end-oriented.

However, the nation-states, in light of the growing interaction in the globalized world and the common aim to attain international peace and order, have taken the necessary steps to address these roadblocks in the applicability of the principle internationally[7]. Globalization has a significant contribution to the development of both domestic and international legal frameworks governing and regulating transnational transactions and activities. This has led to the development of international institutions tasked with the implementation of international law to secure peace, order and respect for basic human rights in the international community.

In today’s world, however, the significance of the rule of law stretches far beyond its application to traditional inter-state relations. The second aspect of the rule of law at the international level is the increasing attention of the international community on the impact of the international rule of law on individuals, with respect to the need to protect the inalienable human rights of the individuals. The international humanitarian law and human rights law has ensured that the basic human rights of the “individuals” are brought at the centre stage[8], and that every nation-state is obligated to protect them. These developments have placed legal constraints on the conduct of sovereign states in the international community and prescribed international standards which ensure that substantive aspects of justice are also catered to, at the global level.

However, this individual-focused approach to rule of law at the international level is being implemented at the domestic level, by making the domestic legal system in line with the international standards. In light of this, it is important to keep a check on the discretion provided to the national legal system regarding the substantive rules as rule of law cannot be considered effective in its true essence if the laws are unjust and oppressive.

 

[1] LTJ, http://lawtimesjournal.in/rule-of-law/ (last visited Feb. 1, 2021).

[2] A V DICEY, INTRODUCTION TO THE STUDY OF THE LAW OF THE CONSTITUTION (1885).

[3] Id.

[4] Ruti G. Teitel, Humanity’s Law: Rule of Law for the New Global Politics, 35 CORNELL INT’L L.J. 355, 357 (2002).

[5] The Rio +20 Conference on Sustainable Development Outcome Document, 2012; UN Millennium Development Goals etc.

[6] Charles Sampford, Reconceiving the Rule of Law for a Globalizing World, GLOBALISATION AND THE RULE OF LAW 9, 10 (2005).

[7] UDHR, ICCPR, ICESCR, Convention against Terrorism, Human Trafficking etc.

[8] United Nations Human Rights Committee, the International Criminal Tribunals (ICTY, ICTR), and the International Criminal Court (ICC) etc.

Categories
Blog

Insider Trading in view of the order by SEBI to ban Future group

By: Vatsal Mehrotra

Introduction

Insider trading can be defined as buying or selling of a public company stocks by a person who has non-public and material information about that company or the management decisions to be taken by that company. Depending on when the insider makes the trade, Insider Trading can be categorized as legal or illegal. Material non-public information is defined as any information that could substantially impact an investor’s decision to buy or sell the security that has not been made available to the public yet. This information is largely used in the stock market which engages in trade of shares and securities. The prices for which are subject to fluctuation if there is any important change in the management of the company. Apart from this the fluctuation in the prices of the shares of that company in the stock market, is also visible when important decisions pertaining to mergers, acquisitions or takeovers are undertaken in the company. Knowledge of these changes without the official public announcements is beneficial for the people engaging in such illegal transactions of stocks.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!

It is considered one of the most serious crimes in the capital markets as the inside trader has traded undisclosed price sensitive information regarding the shares of that particular company.
However, if the said trade is done towards any regulatory authority or the prescribed authority then the same trade would not amount to any violation of law. In academic circles the idea of insider trading is still debatable as academicians under circumstances feel that insider trading is important for building the trust and confidence of the employees of the company towards the company. Therefore, one must be careful while treating a trade in securities of a company as insider trading. They must consider all the relevant factors like the nature of information, the existence of substantial connection with the company, etc.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!

Insider Trading in India

The reason insider trading is considered illegal in law is that it gives a person an unfair advantage and persons not having that advantage cannot trade and will be under loss. Moreover, fair opportunity which shall be granted to everyone trading in the stock market to buy and sell the shares will be lost and the holder of the illegal information shall be creating unfair transactions. To counter such a situation, the legislature passed Securities and Exchange Board of India Act, 1992 (SEBI Act, 1992), in which, under section 15G, for insider trading was provided.

The penalty for such an offence was provided to be not less than ten lakh rupees which may extend to twenty-five crores rupees or three times the profit made on such trading. In fact, the SEBI regulations have been amended from time to time. After Hindustan Lever Ltd v. SEBI, (1998) 18 S.C.L. 311AA, the regulations were for the first time amended in 2002 after which the next set of amendments came in 2019 on the recommendations of the Fair Market Committee (FMC). While the most recent reform came after the meeting of the SEBI on 25th June, 2020, where maintaining a structured database containing the nature of unpublished price sensitive information (UPSI) along with the name of the person sharing such information was incorporated.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!

Future Group and Insider Trading ban

SEBI on 3rd February, 2021, banned Kishore Biyani, founder of Future Retail Groups from buying, selling, or dealing in securities of Future Retail for two years. His brother Anil along with several other entities were also banned. This was done in relation to a case filed back in 2017 where enquiry was called in the use of UPSI to trade in Future Retail shares. The SEBI found out that several entities Future Corporate Resources Pvt. Ltd (FCRL), FCRL Employee Welfare Trust, etc., were acting in connivance with the Biyani family for insider trading.

The order stated that the Biyani-family controlled entities were in violation of the regulatory mechanism as they had indulged in insider trading in the shares of group flagship Future Retail Ltd (FRL) prior to an announcement about the consolidation of the group’s offline and online home retail business into a single entity. Following the announcement in April 2017, shares of Future Retail hit a record high. The price of the scrip of FRL increased 4.68% from Rest. 292.60/- per share (closing price on April 19, 2017) to Rs.306.30/- per share (closing price on April 20, 2017).

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!

The order had also clarified that “When a person who has traded in securities has been in possession of unpublished price sensitive information, his trades would be presumed to have been motivated by the knowledge and awareness of such information in his possession. The reasons for which he trades or the purposes to which he applies the proceeds of the transactions are not intended to be relevant for determining whether a person has violated the regulation. He traded when in possession of unpublished price sensitive information is what would need to be demonstrated at the outset to bring a charge.”

In April, 2017, the Future Retails Group consolidated its home retail business, offline operated by its HomeTown stores while online and ecommerce by Blue eServices which owns and manages fabfurnish. This was done to bring “greater visibility on the performance of the home retail business and e-commerce home retail business”. However, Biyani and other related entities started buying FRL shares from March 10th, 2017 when the decision was internally improved even though this was made public on April 20th, 2017 during market hours.
The funds for purchase of the FRL shares during the UPSI period was done on the written instructions and authorization by Kishore Biyani and Anil Biyani to their stockbroker Indiabulls. SEBI fined them heavily for this holding the entities guilty of the crime of insider trading.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!
However, on 6th February, 2021, the ban by the SEBI was challenged and Kishore Biyani moved the Securities Appellate Tribunal (SAT) challenging the ban. In fact, the FRL spokesperson has said “On merits, the SEBI order is untenable since it treats a well-anticipated and publicly well-known impending reorganisation of the home furnishing businesses that the Future Group affected in 2017 to be unpublished information.”

Approach of the Courts in Insider Trading Matter

The juridical approach has always been such that inside traders have been dealt strictly in accordance with law. In Securities Exchange Commission v Rajat Gupta ,747 F.3d 111, the defendant had traded in confidential information worth in billions and he was convicted for a period of two years and fined five million dollars along with returning the profits gained from insider trading.
Gujarat NRE Mineral Resource Limited v. SEBI, (Appeal No. 207 of 2010 decided on 18.11.2011), the main issue was whether investment from one company and selling it to the other company affects the prices of shares. The Appellate Tribunal decided against it as it held that since an investment company’s primary objective is buying and selling of securities, such an act would not amount to price sensitive information. After Hindustan
Hindustan Lever Limited v. SEBI, (1998 SCL 311), the regulations were amended by the SEBI in such a manner that any speculative news published in the newspaper or in electronic media about a company would not amount to publication of price sensitive information.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!

Recommendations to improve regulations against Insider trading

The harmful effects of insider trading is disruptive for the market and certain measures can be taken to prevent such incidents. To prevent such incidents the stock exchanges play a very important role and the proactive approach by them can help by duly monitoring the transactions by the insiders constantly and instantly reporting any suspicious activity by the insider to the SEBI. Furthermore, the regulations can be amended to impose liability on the person who receives the tip for trading in confidential information. Other than that the investors who are contemporaneously trading at the time of insider trading must be given the option to recover the losses suffered from the insider.
Rachana Panguluru, Vamsi Krishna Bodapati, Insider Trading- Comparative study with the UK and India, Manupatra.
This action might refrain the insiders from insider trading because many investors can exercise pressure on the insiders. The companies can also have qualified stock brokers who they make mandatory for all the insiders to purchase stocks only through that particular broker. The qualified broker will check whether the insider purchasing the stock satisfied all the conditions preceding the purchase or not and duly report them to the company.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!
Nonetheless, the efforts undertaken by SEBI to prevent insider trading is commendable and has helped India emerge as a top player in the capital market and its insider trading prohibition laws are equally competing with such laws in the developed countries. SEBI time and again constituted committees to have the regulations and laws on the prohibition of insider trading updated. It is constantly on a run in updating all the laws to prevent insider trading. SEBI started observing the markets to get rid of the insider trading activities at the root level itself.

Learn about Criminal Laws with Enhelion’s Online Law firm certified Master Course!

Categories
Online legal courses

E-Commerce Contracts and the clauses covered under it

By: Alok Rao

Introduction: –
E-commerce is a form of business model, or segments of a larger business model, enabling a company or person to conduct business on an electronic network, typically the Internet. However, there is no specific meaning of the term e-commerce, which is usually used to denote a form of doing business by electronic means rather than by conventional physical means. E-commerce questioned companies’ traditional system trading with customers, putting together diverse business models that empowered consumers.

The most popular business models facilitated by e-commerce are:

  1. B2B: Business to Business (B2B) explains trade transactions between different companies, allowing foreign companies to develop new partnerships with other companies. As between the manufacturer and the wholesaler, or between the wholesaler and the retailer.
  2. B2C: Business to Consumer (B2C) defines companies’ operations providing end customers with goods and/or services. There has always been a direct interaction between companies and customers, but with e-commerce, the traction has been gained in such transactions.
  3. C2C: Business to Consumer (C2C) includes electronically facilitated transactions between consumers through third parties. Traditionally, customers have had interactions with other consumers, but only a handful of these practises have been of a commercial sort.
  4. C2B: Customer to Business (C2B) involves customers supplying goods/services to businesses and generating value for the company.
  5. B2B2C: This is an alternative to the B2C model, and there is an external intermediary sector in this form of the model to assist the first business transaction with the end customer. For example, Flipkart is one of the popular e-commerce portals and offers a stage for customers to buy a wide variety of items, such as books, music, CDs, etc.

As a result, the e-commerce world may appear uncomplicated and economical; there are several legal considerations that an e-commerce company must seriously consider and bear in mind before beginning and while carrying out its operations.

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

E-commerce law in India: –

Information Technology Act, 2000
The first ever e-commerce legislation passed by India’s Government was the Information Technology (IT) Act 2000. It was an act to give effect to the UNCITRAL Model Law on Electronic Commerce, 1996. On 30 January 1997, the General Assembly of the United Nations adopted a resolution commending the Model Law on Electronic Commerce for favourable consideration by the Member States as a Model Law as they pass or amend their rules, given the need for uniformity of the law applicable to alternatives to paper-based methods of communication and storage of information.

The IT Act’s primary purpose was to include legal recognition of transactions carried out through electronic data exchange and other electronic means of communication, generally referred to as electronic commerce (e-commerce). The IT Act 2000 facilitates e-commerce and e-government in the region. It includes guidelines on the legal recognition of electronic records and digital signatures rules for the allocation of e-records, the process and manner of reception, the time and place of dispatch and the receipt of electronic documents. The Act also sets out a legal system which sets out penalties for various cyber offences and crimes. Significantly, under the Act, the Certification Authority is the focal point around which this Act revolves, as most of the provisions relate to the Regulation of Certification Authorities, i.e., the appointment of a CA Controller, the licensing of CAs and the recognition of international CAs. It has also punished crimes such as hacking, damage to the source code of the machine, publication of information that is obscene in electronic form, violation of confidentiality and privacy, and fraudulent granting and use of digital signatures. It also provides civil liability, i.e., cyber contraventions and criminal infringements, fines, the establishment of the Adjudicating Authority and the Cyber Regulatory Appeal Tribunals.

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

The relevant provisions of the Indian Panel Code, 1860, the Indian Evidence Act, 1872, the Banker’s Book Evidence Act, 1891 and the Reserve Bank of India Act, 1934 were also amended to resolve the related issues.

Information Technology (Amendment) Act, 2008
India incorporated the Information Technology (Amendment) Act, 2008 to apply the UNCITRAL Model Law on Electronic Signatures, 2001 in India. The IT Act of 2000 was modified to make it technologically neutral and accepted electronic signatures over-restrictive digital signatures. The Act incorporated several amendments, such as implementing the principle of e-signature, the modification of the definition of intermediary, etc. Also, the State asserted unique powers to monitor websites in order, on the one hand, to protect the privacy and, on the other hand, to control potential misuse leading to tax evasion. It is important to note that this Act acknowledged the legal validity and enforceability of digital signatures and electronic records for the first time in India and concentrated on protected digital signatures and secure electronic documents. These reforms were implemented to reduce the occurrence of electronic forgeries and promote e-commerce transactions.

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

Legal Validity of Electronic Transactions in India: –
There are numerous legal concerns related to the formation and legality of electronic transactions, such as online contracts and compliance issues, which are dealt with below.
Formation of an E-Contract
The most popular types of e-contracts are clickwrap, search wrap and shrink wrap contracts. The terms and conditions of such agreements shall be made available to the contracting party in a manner which is substantially different from the standard paper contracts. By clicking on the wrap contract, the party’s affirmative approval is made by checking the ‘I agree’ tab with a scroll box that allows the acceptance party to access the terms and conditions.
In the case of a browser wrap arrangement, the website’s mere use (or browsing) makes the terms binding on the contracting party.
In a Shrink-wrap agreement, the contracting party can read the terms and conditions only after opening the box inside which the product (usually a licence) is packed. Such contracts are important in the context of e-commerce, primarily because of the form of products associated with shrink-wrap agreements.

Online Contract Validity
The Indian Contract Act, 1872, regulates all e-contracts in India, inter alia, mandate specific pre-requisites for a valid contract, such as free consent and legal consideration. The concern to be considered is how the Indian Contract Act’s specifications can be met with e-contracts. Also, the Information Technology Act, 2000 (‘IT Act’) enhances the legitimacy of e-contracts.
According to the Indian Contract Act, 1872, some of the essential specifications of a legal contract are as follows:

  • The agreement should be entered into with the free consent of the parties.
  • The agreement should be considered lawfully.
  • The parties should have the authority to enter into contracts.
  • The purpose of the contract is to be lawful.
  • Terms and conditions associated with the e-commerce platform are of the utmost importance in ensuring that the e-commerce agreement meets a legal contract’s specifications.

Unless expressly forbidden, clickwrap agreements would be enforceable and legal if the provisions of a valid contract set out in the Indian Contract Act of 1872 were met.

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

There is no provision under the Indian Contract Act that written contracts be physically signed. However, the unique statuses do include the criteria for signature. Furthermore, the very essence of e-commerce is that it is virtually impossible to verify the age of someone who is trading online and who presents problems and liabilities to e-commerce platforms because the situation under Indian law is that a minor is not qualified to enter into a contract and that such an agreement is not enforceable against a minor.
In India, any instrument under which rights are produced or transferred must be stamped. The stamping of the instrument also depends on relevant stamp duty legislation passed by different states in India.

Standard Type of Online Contracts is not appropriate.
There is no well-developed case law in India as to whether the traditional type of online agreements is unwise. However, Indian courts have previously dealt with cases where contract terms, including common form contracts, have been negotiated between parties in unequal negotiating positions. Specific provisions of the Contract Act deal with unenforceable agreements, such as when public policy is opposed to considering the contract or subject-matter of the contract. The agreement itself cannot be valid in such situations.
The courts may place the individual’s responsibility in the leading position to show that the contract was not caused by undue influence.
In the case of ‘LIC India Vs. Consumer Education & Research Centre’
L.I.C. Of India & Anr vs Consumer Education & Research Centre & Ors. Etc. 1995 SCC (5) 482, the Hon’ble Apex Court of India interpreted the insurance policy issued by India’s Life Insurance Corporation by adding certain public interest elements. The court observed that ” in dotted line contracts there would be no occasion for the weaker party to bargain as to assume to have equal bargaining power. He has either to accept or leave the service or goods in terms of the dotted line contract. His option would be either to accept the unreasonable or unfair terms or forgo the service forever.”

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

It is essential to provide well-thought-out terms that shape online contracts to ensure that there is an ample opportunity for consumers to familiarise themselves with the terms of such agreements. In addition to the above, there is also a range of other legal, tax and regulatory concerns, in particular Security Issues, Consumer Protection Issues, Intellectual Property Issues, Content Control, Intermediate Liability, Jurisdictional Issues and Tax Issues, which need to be taken into account when dealing with e-commerce transactions.

Conclusion: –
Rapid growth in e-commerce has generated the need for vibrant and efficient regulatory frameworks to reinforce the legal framework crucial to the success of e-commerce in India. It has always been argued that poor cybersecurity laws in India and the lack of a proper regulatory system for e-commerce are why both Indians and the e-commerce industry face so many challenges in enjoying a consumer-friendly and business-friendly e-commerce climate in India. India does not have any dedicated e-commerce regulatory legislation other than the IT Act that governs India’s e-commerce and transactions. Therefore, the government should create a legal structure for e-commerce so that domestic and foreign trade in India will flourish so that fundamental rights such as privacy, intellectual property, the prevention of fraud, consumer protection, and so on are taken care of. The legal community in India needs the required expertise to direct entrepreneurs, customers, and even courts. The rapidly evolving market module can comply with existing legislation usually applicable to business transactions in standard modules. Simultaneously, it should ensure that the benefits of technology are unhindered by the judicious evolution of law by the learned interpretation of the court, and there is still a consensus that specialized law governing and controlling some aspects of e-commerce is an obligation and an exclusive requirement.

Learn more about Contracts and Drafting with Enhelion’s Online Law firm certified Master Course! 

Categories
Blog

Contracts in the Sports Industry and the Clauses Covered Under it

By: Tanisha Yadav

INTRODUCTION:

Sport is that social phenomenon that has existed from a very long time in all levels of society. It represents the country’s culture and affects people’s lifestyle, health, values, social status, country’s relation, fashion trends, etc.

It is a type of game or contest where people get involved and perform physical activities to compete against each other following definite rules and regulations. Cricket, football, basketball, and volleyball are played by the number of people in different parts of the world.

The sport has now taken the industry’s shape from the last few decades to which we often called the Sports industry. It is a market with an economic dimension, which offers products, services, places and ideas related to sport, fitness or leisure time to its consumers[1] which also involves people, organizations and businesses who facilitate, promote, and organize activities and events based on sports.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

Contract in the Sports Industry:

Sports Contracts are similar to those contracts we come across in our everyday life; they are the mutual agreements that legally bind two or more parties.

Generally speaking, the sports industry’s Contract occurs between the sports organization/sports Agent and player/Athlete.

It defines the rights and responsibilities of the various participants in the business of professional sports.[2]

All the sports contracts are express in which parties give their consensus by words either spoken or written to enter into the Contract by way of offer, acceptance and consideration in Contract. Virtually, in sports contracts, implied contracts are not considered as a real contract as its very hard to prove the implied Sports contract.

Apart from offer, acceptance and consideration, an athlete’s capacity, mutual agreement, mutual obligation and subject matter are the essential ingredients in forming the sports contract. If the athlete is an adult, he can sign the contract, but his legal guardian must sign the Contract if the athlete is minor.

In India, Sports Contracts are governed by The Indian Contract Act, 1872, and The Industrial Disputes Act of 1947.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

Following are the considerable areas/ subject matter in which sports contracts takes place[3]:

  • Endorsement and merchandising Contract
  • Contract of Sponsorship Rights
  • Contracts between Player and managers or Agency contracts.
  • Deal of Membership rights in sporting clubs or organizations.
  • Contract of Image rights
  • The contract for appearances by players
  • Contract of Participation Rights and Obligations.
  • Presenter’s Contract
  • Contract of sale of media rights with event managers, Broadcasters and promoters.
  • Endorsement and merchandising Contract
  • Contract of Player transfer
  • Contract of Brand rights.

Player-Agent Relationship:

The player-Agent relationship is significant in sports contracts, as the player is sometimes so occupied in his sports that he doesn’t get time to negotiate Contract and handle everything. Sometimes the player faces difficulty in understanding terms of the contracts too. In that scenario, the player needs a person to trust, who can look and manage a player’s commercial relationships.

Player: Player is a person who actively participates in any sports requires endurance.

Agent: A agent is a person who carries a fiduciary relationship with the player in which he serves a significant role in negotiating contracts of the professional player and handles finances and public relations.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

TYPES OF SPORTS CONTRACT:

Professional Service Contracts: These contracts are also known as standard player’s contracts. These contracts are usually in a “boilerplate” form. The boilerplate form is the standardized forms in which standard or generic language is used.

These boilerplate forms are used where a state of Contract that can be reused in a new context without having any substantial changes in it.[4] Thus, the wording of these contracts can be used again and again without any alteration or reformation. If a professional athlete is part of a team, usually the athlete receives a standard player’s contract.[5] Hence, the professional service contracts are the same for all the athletes except the differences in salary and athletes’ bonus and involve an employer-employee relationship. Furthermore, these contracts also leave the scope of modification that can be modified by introducing collateral agreements.

Endorsement Contracts: Endorsement contracts are the independent contracts which do not require employer-employee relationship. An endorsement contract is one that grants the sponsor the right to use (i.e., license) the athlete’s name, image, or likeness in connection with advertising the sponsor’s products or services.[6]

Appearance Contracts: The appearance contracts are those contracts which pay the player/athlete for his/her appearance in any public event of any organization, institute or company by way of Contract. Thus, it is a contract between the venue and the athlete. It includes Sports camp, sports tournament etc. It sets out the time and dates for the appearance of an athlete on the venue location.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

Besides, if under any of the kind of contract, the contracting party extends beyond the scope of the terms of the Contract, under section 27 of the Indian Contract Act, 1872, i.e., restraint of trade, it would be void and not enforceable.[7]

CLAUSES COVERED UNDER THE CONTRACT:

Title: Its always essential that there should be a title of the Contract, through which one can identify the very nature of the Contract.

Information Clause: Under this clause, the information of the contracting parties is mentioned. Such as the name and address of the parties to the Contract. It also includes the information that on which date the Contract was made.

Player services Clause[8]: What type of service provided by the player is being discussed under this clause.

Player obligations Clause: This clause contains the obligations of contracting parties towards each other. It elucidates the rights, duties and responsibilities of the parties.

Term clause: This clause specifies the Contract’s duration—the time of Contract from the beginning to the end date. After completing the due date, the Contract automatically terminates, although it is subject to the renewal option of Contract to the parties.

Revenue-sharing Clause: If any organization or a company is hiring the player on the promise of sharing revenue, this clause discloses the information about the percentage and related details shared between the parties to the Contract.

Bonus Clause: This clause states that the player would get a bonus amount on his/her exceptional performance in sport.

Arbitration Clause: This clause expounds that if any dispute, controversy or any claim arises or if the issue related to breach of contract, non-performance or interpretation of Contract occurs then in that case, the matter will be resolved by the arbitrator on request of any of the parties. If parties do not agree on an arbitrator in any case, then in that scenario, both the parties will select one arbitrator. Then both the arbitrators shall select a third, and then the third arbitrator shall arbitrate the dispute.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

Board, lodging, and travel expenses Clause: 

This clause deals with the board, lodging and travel expenses of the player. It states that all the costs mentioned above will be borne by the club or organization hiring the player.

Choice of Forum Clause: Under this clause, the choice of law is mentioned through which contracting parties would like to govern, construe and enforce the Contract. As most of the sports contracts affect the parties belongs to different states, choosing a common law or jurisdiction can save parties from any further jurisdictional issues.

Remuneration and other benefits Clause: This clause states the player’s remuneration for his services.

No-Tempering Clause:  A no-tampering clause which avers that one player cannot attempt to entice another employee to enter negotiations with another club while under Contract to a different team.[9]

Confidentiality clause: Most contracts come with the confidentiality clause; certain things need to be confidential between the contracting parties only. Therefore, under this clause, contracting parties agree to keep the Contract’s contents and related matter confidential. This clause binds the parties to the Contract even after the termination of the Contract.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

Player restrictions/Hazardous Activities Clause: Under this clause, the player agrees that during the duration of the Contract the player will not engage in any other sport or any activity which can involve the substantial risk of any personal injury or which can impair the skill of the player in his sport. Apart from that, this clause contains other restriction on the player by the organization or club for the effective enforcement of the Contract. If the player breaches any of the rules and regulation mentioned under the clause or if the player becomes injured as a direct result in taking part in the given activity, the team/organization can transfer the financial risk onto the player.[10]

Non-assignment Clause: Sports contracts are personal services contract, and therefore it cannot be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.[11]

Termination Clause: A termination clause gives the right to the contracting parties to terminate the sports contract. Commonly, it is based on the failure of the parties’ performance, breach of any material condition, warranties, or the express agreement. Furthermore, in most cases, the contract is terminated because the player is no longer fit for the sport or cannot meet the team’s need.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

Usually, the party seeking to terminate the agreement must give the other advance written notice of his intention to terminate the Contract. As long as the party seeking to terminate the Contract complies with the notice provisions, termination of the Contract is permissible.[12]

Remedies Clause: A breach of Contract can be remedied through monetary damages, restitution or specific performance. Although, the parties seek for the remedial measures which were promised under the clause.

These were the few clauses present in almost every sports contract; there are some other clauses whose inclusion mainly depends on the nature of the sports contract.

CONCLUSION:

In India, the sports industry is at its boom. There are so many sports contracts that are signed every day in this industry. It is quintessential that the contract drafter should take exceptional care while drafting the policies, procedure and clauses under the Contract. Because it prevents the parties from any predicament.

But, it’s so sad that due to lack of proper sports law, Indian sports industry witnesses scandals and unfair dismissal of players. Today, there is a dire need for the introduction of sports legislation. Because it’s the only ray which can address this situation and bring fairness in this industry. Thus, for the Indian sports industry’s consistent growth, a healthy balance in the enforcement of Contract is required.

Learn more about Sports Law with Enhelion’s Online Law firm certified Diploma course by Scriboard Advocates and Legal Consultants!

[1] IGI Global, What is Sports Industry, IGI Global, https://www.igi-global.com/dictionary/concurrence-of-sports-and-entertainment-industries/43855 (last visited on Jul., 17, 2020).

[2] Avinandan Chattopadhyay, Regulation and Liabilities of Parties in Sports Contract, Social Science Research Network, file:///C:/Users/HP/Downloads/SSRN-id2145520.pdf (last visited on Jul., 17, 2020).

[3] Farleys: Solicitors LLP, Sports Contracts and Agreements, Farleys, https://www.farleys.com/solicitors-for-you/sports-law-for-individuals/sports-contracts-and-agreements/ (last visited on Jul., 19, 2020).

[4] James Chen, Boilerplate, Investopedia (Sep., 03, 2019), https://www.investopedia.com/terms/b/boilerplate.asp.

[5] US Legal, Sports Contracts – Basic Principles, US Legal, https://sportslaw.uslegal.com/sports-agents-and-contracts/sports-contracts-basic-principles/ (last visited on Jul., 19, 2020).

[6] Supra note 6.

[7] Supra note 3.

[8] Anirudh Rastogi and Vishak Ranjit, E-Sports Player Contracts: Common Clauses And Potential Legal Issues In India, Ikigai Law: Mondaq (Jun., 18, 2020), https://www.mondaq.com/india/gaming/955392/e-sports-player-contracts-common-clauses-and-potential-legal-issues-in-india.

[9] Supra note 2.

[10] Adam Epstein & Josh Benjamin, Unique Clauses in Sport Contracts, Sh10an: WordPress, https://sh10an.wordpress.com/2015/04/11/unique-clauses-in-sport-contracts/ (last visited on Jul., 19, 2020).

[11] US Legal, Drafting Suggestions for A Sports Contract, US Legal, https://sportslaw.uslegal.com/sports-agents-and-contracts/drafting-suggestions-for-a-sports-contract/ (last visited on Jul., 20, 2020).

[12] Roshan Gopalakrishna & Vidya Narayanaswamy, Sponsorship Contracts – Reasonableness of Contractual Restraints, The Sports Law and Policy Centre (Feb., 10, 2011), https://sportslaw.in/home/2011/02/10/sponsorship-contracts-reasonableness-of-contractual-restraints/.

Categories
Blog

Analysis of Insolvency and Bankruptcy Laws in USA, UK and UAE

By: Anant Tyagi

Earlier, the Insolvency and Bankruptcy law was not very clear in UAE and was very divided into various areas, resulting in complexity and confusion. After 2016 the new bankruptcy law has been created with the strong base to resolve any insolvency issues that the businesses face to protect. The bankruptcy law 2016 was established under commercial companies law to aid enterprises to which range under the small and medium-sized companies based in UAE and are facing economic challenges. The features of the bankruptcy law are as follows:

  1. Financial Recognition

The act aims to boost the concept of Financial restructuring by establishing a regulatory body known as the committee of financial reconstructing. A list will approve this particular committee’s role of experts who are well-versed in bankruptcy and financial reorganization to carry on the task.

  1. Composition

Under the new bankruptcy law, composition approaches are also available to assist the debtor in settling with the creditor. It is up to the creditors to accept the settlement or any part payment. For this arrangement to be possible, a condition must be fulfilled, stating that a debtor must not have stopped payment for more than 30 consecutive days. When the debtor makes an offer of composition, it is submitted to the court, which appoints an expert to analyze whether the composition of finance is sufficient or not.

If the offer of competition is accepted, the court will select an official in charge who will prepare a record of debtor’s creditors to submit to a court. Any composition has to be passed by most creators, which is equal to two-thirds of the debt and equally approved by the court.

Learn more about Insolvency and Bankruptcy with Enhelion’s Online Law firm certified Master Course!

  1. Restructuring and bankruptcy

This particular part of biography law 2016 deals with the restructuring process by aiding the debtors in applying for affection plan for a bankrupt business. It also provides for declaring the bankruptcy to fulfil the obligations. Either of debtor or creditor can request for the commencement of the bankruptcy process. It is required that bankruptcy should be declared within 30 days by the debtor.

When the court accepts the application, the official is selected for selling and reconstruction of business. Insolvency and bankruptcy code process of liquidation starts, the secured creditors are given more preference in the rank than ordinary creditors.

  1. Bounced cheques

Under the UAE law, any non-UAE national person signatory to a bounced cheque faces potential criminal liability. Similarly, in bankruptcy law penal provisions are to be stopped if it is proven that specified check was issued before the commencement of composition/ restructuring. The cheque amount will be added to the total debt of the debtor.

  1. Penalties

The complaint of the new bankruptcy law 2016 has to be backed by a variety of available penalties. The penalty aims to provide both imprisonment and substantial financial fines.

With the help of the new bankruptcy law that gives ample options to bypass bankruptcy, which earlier had a severe penalty for companies going through a bankruptcy is a welcome step in insolvency and bankruptcy. The new is debtor-friendly and provides a way for the companies to repay their debts while continuing the business instead of the older laws that forced companies to shut their operations completely whenever any financial difficulty arose. This law will encourage companies from around the world to enter the UAE market.

Learn more about Insolvency and Bankruptcy with Enhelion’s Online Law firm certified Master Course!

“A new law called corporate information insolvency, and governance act 2020 has been introduced by the United Kingdom with major reforms like “free-standing moratorium” and New Restructure plans. Under the new law, free-standing Moratorium will aid the companies to take shelter from creditor’s action. Under the insolvency and bankruptcy code 2016, whenever a company goes into the Moratorium period, distributor action save the company is not predetermined. Under the new law, free-standing Moratorium will ensure that a company can choose the company’s rescuing. The company is not forced to stick to the formal process, but if there is an informal process to rescue the company, it can even be used. Moratorium period is time-based to ensure that no misuse is taking place and the Moratorium is cancelled if it is final that a company cannot be rescued.” [1]

“Another form that has been introduced under the CIGA is the restructuring plan. The act had introduced a process in which the restructuring plan between the company and creditor required the creditors to vote and sanction the court. However, the cross-class cram-down method has been mentioned that states that the court has the power to give a plan sanction, it requires even if the majority of the class is against it.” [2]A restructuring plan can be approved by the court even if all the creditors are against it if the court feels that the creditors would not be worse off with the suggested Restructure plan than when no Restructure plan was approved.

Learn more about Insolvency and Bankruptcy with Enhelion’s Online Law firm certified Master Course!

The cross-class cram-down method’s possible effect is that the companies will have more flexibility whenever they are proceeding with the restructuring plan even in those situations where the consent of all creditor classes cannot be obtained. But this method also has its challenges because it is mentioned that the court can overrule the descending creditors and sanction the plan if they feel that under the proposed restructuring plan they would not be worse off if no restructuring plan was approved. It burdens court with the responsibility of doing valuations, which is very contentious because a market valuation keeps changing according to the market forces. With the new covid crisis, it will be very problematic for the courts to assume the economic market’s evaluation and outcomes.

One of the significant reforms is that earlier whenever the company was going through financial difficulties and bankruptcy process, the company’s supplier would always seek to get out of the contractual obligation and sever ties with the company rendering the company without any support. The present act will now prohibit the supplier from terminating the contract with the company when it goes into the restructuring plan. The company can focus on paying back their debts and keeping ongoing their business instead of just closing everything down.

Learn more about Insolvency and Bankruptcy with Enhelion’s Online Law firm certified Master Course!

The United States of America constitution has provided the US Congress with the power and authority to enact the laws of bankruptcy in the country. While exercising their power and discretion, the lawmakers passed the bankruptcy Reform Act of 1978 which has largely governed the country’s current bankruptcy law’s bankruptcy issues. The United States bankruptcy code is also referred to as tight 11. It contains the business and individuals’ procedure and practices to follow whenever they are filing for the bankruptcy under the United States Bankruptcy court. Under the US bankruptcy code, both companies and the individuals are allowed to file a bankruptcy petition and seek relief. The most common form of bankruptcy in the United States is mentioned in chapter 7, which also covers the liquidation process. The court appoints the trustee, and the trustee must collect all the non-exempt assets of the debtor.

When the creditors come to know about the company’s condition, it will force a company to file for bankruptcy. Still, apart from the UK and UAE law, the day the petition of bankruptcy is filed in the court, the business will cease to exist. It is up to the court-appointed trustee whether he allows certain operations of the company or not. When it comes to large companies, the trustee may decide to sell the company’s property loss-making division to another flourishing company. The preference is given to the secured creditors, usually the first ones to be paid back. As mentioned before, the US bankruptcy law provides for companies to file bankruptcy and offers individuals to file for liquidation in which they are allowed to keep specific exam properties, but it varies from state to state. The trustee will sell the other assets which are not under the exempt class to pay back the creditors. In the 2005 bankruptcy abuse prevention and Consumer Protection Act, an amendment was made that barred consumer debtors filing bankruptcy because it was felt that this provision would be misused by the credit card companies from losses, resulting in the customers going bankrupt. The act also provides for cross border insolvency state code incorporate with foreign courts to solve cross border insolvency cases. United States of America’s bankruptcy code is one of the oldest coats and is still prevalent without any new law being drafted in present time.

As we can see that the UAE bankruptcy laws for very old and had regressive laws with penal provisions which decided the companies from investing in UAE or any running companies in the UAE. Still, with the new law, they have provided a well-defined process to form restructure plans while running the business remove regressive penal punishments which is a welcome step and encourages the companies to continue their business while also returning the amount in debt instead of just punishing the people running the company and suffering Loss which is the ultimate goal of insolvency and bankruptcy laws.

“On the other hand, the United Kingdom has also introduced a new law for the information c and governance by giving major reforms like a free-standing moratorium that gives the company the freehand to determine the course of action which helps to rescue the company instead of just following the formal procedures and not getting any result. The UK has also given major power to the court to bypass the creditor’s Ascent for the restructure plan in case a court feels that this is the best records available for the company and is being blocked by the creditors for their greed of larger returns which will further worsen the situation.” [3] Meta reforms have also been provided by the act to ensure that the business does not close down and keep ongoing.

Learn more about Insolvency and Bankruptcy with Enhelion’s Online Law firm certified Master Course!

The bankruptcy code of The United States of America probably the oldest but the most reliable piece of legislation for dealing with insolvency but no significant amendments in the laws has made it behind the other laws. While the other laws understand the concept that that can only be paid when the company keeps on running the US law focuses on shutting down the company the day the petition of bankruptcy is filed which is a very regressive step because are not only the chances of getting the debt go down but also the economy suffers when the company closes down and incoming times the US government has to bring amendments to resolve this issue.

[1] corporate information insolvency and governance act 2020 by Andrew Mills and Paul Durban

[2] Pricewaterhouse coopers guide on UK Insolvency and Bankruptcy reforms

[3] Bankruptcy Reform Act of 1978

Learn more about Insolvency and Bankruptcy with Enhelion’s Online Law firm certified Master Course!

Categories
Blog

Pre-Packaged Insolvency

By: Prashant Pathak 

Pre-packaged insolvency (a “pre-pack”) is a sort of liquidation strategy, where a rebuild plan is concurred ahead of time of an organization announcing its bankruptcy. In the United States pre-packs are frequently utilized in a Chapter 11 recording. In the United Kingdom, pre-packs have gotten well known since the Enterprise Act 2002, which has made organization the prevailing bankruptcy method. Such game plans are additionally accessible in Canada under the Companies’ Creditors Arrangements Act.

 What is Pre-Packaged Insolvency?

A “Pre-Packaged Insolvency” is a course of action, where the offer of all or part of an organization’s business or resources is haggled with a buyer before the arrangement of an indebtedness proficient as the manager. The real deal is then executed on the arrangement and endorsement of the bankruptcy proficient (hereinafter alluded to as “IP”). The pre-pack instrument basically encourages the definition of a goal plan before any proper procedures. This plan lessens the time and cash spent on court procedures and straightforwardly moves to getting a reasonable goal for the organization. The fundamental target of pre-packs is to find some kind of harmony between the interests of the leaser and shield the business from liquidation.

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

This may be a novel component in India, yet nations like the United States of America (USA) and the United Kingdom (UK) have effectively executed it in their particular indebtedness rehearses. Since India has no administrative involvement in pre-pack, another structure or alterations to the current arrangements of the IBC would be needed to execute the plan in the current bankruptcy system.

PRE-PACKAGED INSOLVENCY IN UNITED KINKDOM:

The expression “pre-pack deal” has been characterized by the Association of Business Recovery Professionals as “a game plan under which the offer of all or part of an organization’s business or resources is haggled with a buyer before the arrangement of an overseer, and the head impacts the deal quickly on, or soon after, his appointment”. The contrast between a pre-pack deal and an ordinary deal is that in a typical deal the executive business sectors the business and arranges the details of the deal after his arrangement.

The reasons a head sells on a pre-pack premise, instead of after post-arrangement advertising, differ from case to case, yet they regularly include the accompanying contemplations. A pre-pack deal dodges the expenses of exchanging (which implies loan bosses get more back), and undoubtedly, the organization and the executive might not have the assets to exchange. It likewise stays away from the chairman facing the challenges related with exchanging. The estimation of the business may disintegrate during organization exchanging.

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

PRE-PACKAGED INSOLVENCY IN UNITED STATES OF AMERICA:

In the United States, regularly the term pre-packaged bankruptcy is utilized rather than pre-packaged insolvency. An ordinary liquidation case is one in which the account holder records for Chapter 11 help without having concurred ahead of time to the provisions of an arrangement of redesign with its loan bosses. Throughout the Chapter 11 case, the borrower or, if the indebted person doesn’t hold the selective option to propose an arrangement, a lender or loan boss gathering may figure and propose an arrangement of reorganization. An organization going through Chapter 11 redesign is adequately working under the security of the court until it arises. A model is the carrier business; in 2006, over a large portion of the business’ seating limit was on aircrafts that were in Chapter 11.

In a pre-bundled case, the arrangement advocates will have tied down adequate help from loan bosses to affirm their arrangement of redesign preceding petitioning for Chapter 11 rearrangement. Pre-bundled plans of revamping practically consistently disable (for example cover short of what) at least one classes of lenders, thus to guarantee that the arrangement can be affirmed by the liquidation court, the arrangement advocates should make sure about the help of in any event 66% in sum and more than one-half in number of at any rate one such hindered class, notwithstanding guaranteeing the arrangement agrees to any remaining necessities for affirmation. Two procedurally troublesome parts of the cycle are the declaration (which should be organized so as not to trigger authoritative end arrangements) and getting the imperative loan boss approval.

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

In 2009, another element finished the acquisition of proceeding with activities, resources and brand names of General Motors as a piece of the ‘pre-bundled’ Chapter 11 reorganization. As positioned by absolute resources, GM’s liquidation marks one of the biggest corporate Chapter 11 insolvencies in US history. The Chapter 11 documenting was the fourth-biggest in US history, following Lehman Brothers Holdings Inc., Washington Mutual and WorldCom Inc.another substance with the support of the United States Treasury was shaped to secure productive resources, under area 363 of the Bankruptcy Code, with the new organization intending to give a first sale of stock (IPO) of stock in 2010. The excess pre-request leasers claims are paid from the previous partnership’s assets.

EXECUTION OF PRE-PACKAGED IN INDIA:

The Bankruptcy Law Reform Committee, entrusted with contextualizing the IBC, has suggested pre-packs as a suitable option to the customary CIRP in India. As per the report put together by the Committee, the pre-pack plan can be permitted under the NCLT administered plan of course of action. Under this course of action, the pre-pack plan would be exposed to earlier endorsement of the leasers and the important partner prior to being introduced to the NCLT. Further, the NCLT would endorse the arrangement simply subsequent to investigating and guaranteeing that the arrangement fulfills the fundamental necessity as might be recommended under the IBC. Along these lines, the pre-pack plan would basically follow the methodology under IBC, while as yet protecting the matter of the Corporate Debtor.

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

PREFERENCES OF PRE-PACKAGE SCHEME :

Aside from saving the matter of the organization and shielding it from likely liquidation, pre-packs have numerous advantages that are exceptionally difficult to disregard. Initially, they would give a superior re-visitation of the leaser. In the current indebtedness component, frequently during the CIRP, the estimation of the resources gets devalued which in the long run brings about lesser compensation to the banks from the returns of the goal plan. Be that as it may, in the pre-packs component, the estimation of the resources will be haggled ahead of time, subsequently, giving better re-visitations of the lenders.

Furthermore, it’s fundamentally less tedious and modest in contrast with the conventional bankruptcy procedures, since all the basics of the pre-packs, similar to exchange and documentation of the proposed plan, are done heretofore. This decreases the all out cost associated with the cycle and jam the estimation of the business which can be vital for the endurance of independent companies.

Ultimately, pre-packs would work inside the overlap of the legal plan. Rather than a private rebuilding measure, pre-packs would work as a legal upheld goal measure under the IBC. This suggests that pre-pack would be exposed to the endorsement of the NCLT and resulting to the endorsement, all the partners would be limited by the goal plan. This would alleviate the danger of ensuing test and rebelliousness by the loan bosses.

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

Difficulties to and Suggestions for Implementation of the Pre-Pack Scheme:

  1. MORATORIUM:

In the ordinary bankruptcy procedures under Sections 7 or 9 of the IBC, a programmed stay for example ban happen, as far as Section 14. The ban restricts the lenders from authorizing cures against the corporate borrower and its resources. Be that as it may, a borrower looking for pre-packs might not have the assurance of a ban. This would offer ascent to a circumstance where the leasers can move toward the Courts or Tribunals and implement their cures, while the indebted person is arranging a pre-pack goal. Such extra case would undermine the resources of the indebted person, yet in addition power the organization into CIRP or liquidation. To relieve such a danger, the Government should present an arrangement or stretch out the assurance of ban to the pre-pack instrument. This would permit the borrower to zero in on facilitated rebuilding and control the leasers from implementing cures against the account holder’s resources.

On the other hand, without ban, the account holder could consistently speak with the lenders and have a go at keeping up its validity to evade any such circumstance that could overcome the pre-pack goal. This would require the borrower to oblige the interests of leasers and offer all the fundamental data with the lenders. Notwithstanding, accomplishing such collaboration among lenders and indebted person is actually quite difficult. Without a ban, the loan bosses can sever the exchange whenever and authorize their privileges, in this manner overcoming the whole pre-pack goal. In this way, the assurance of the ban will be instrumental in arriving at an effective goal under the pre-pack system.

  1. Absence of Transparency:

The classified nature or absence of straightforwardness is another test to the execution of the pre-pack plot. Since the way toward going into the pre-pack plan is hazy and gets just the consent of the made sure about leasers, there are insufficient motivations to think about the stakes of unstable banks. In such cases, the resources of the indebted person organization might be moved without understanding the worth payable to the unstable lenders. Besides, the classified idea of the plan would deny such leasers the occasion to protest the exchange. Subsequently, sufficient cures and plan of action should be presented in the pre-pack plan to ensure the interest of unstable banks. A sensible time period should be accommodated the unstable lenders to record claims and mention criticisms regarding the arrangement. Also, the command to get endorsement from the NCLT would forestall such treacherous exchanges by partners and address the worries of unstable lenders. This would be critical to assist banks with creating trust in the new strategy.

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

  1. Section 29A of the IBC:

Segment 29A would likewise goes about as a significant obstacle in the presentation of pre-pack plans in India. This arrangement was presented by the Insolvency and Bankruptcy Code (Amendment) Act, 2018, and it forbids the current administration or advertisers of the indebted person organization from recovering command over the resources of the organization. It basically stops the indirect access passages of the defaulting advertisers back to the administration. Since the pre-pack plot is an indebted person started measure, it would be the advertisers who are responsible for the cycle and not the IP. The advertisers haggle with the leasers to hold control of the business and keep it as a going concern. This would conflict with the essential substance of Section 29A and, along these lines, deny corporate borrowers from detailing a goal plan with the lenders.

It tends to be contended that quite a sly way of recapturing control under the pre-pack plan would bring about circumvention of indebtedness laws. In any case, if the powerlessness to reimburse the obligations is brought about by factors like languid financial development (brought about by pandemic like COVID-19), at that point permitting the current advertisers to hold control would be prudent. This would guarantee progression of the business action and limit the interference.

The Government should in this manner, weaken segment 29A to actualize the plan of pre-packs in India. The motivation to weaken segment 29A is to empower proactive indebted individuals (in trouble) to arrange the terms of indebtedness with their leasers. In the event that an arrangement like Section 29A is made pertinent to the elements ready to go for pre-bundled bankruptcy, it might will in general thrashing the goal of such a plan. Along these lines, pre-packs should be liberated from segment 29A.

CONCLUSION:

The COVID-19 pandemic and the resulting lockdown has presented difficulties for Governments around the globe. With each monetary action stopping, organizations are confronting extreme monetary emergency and are driven into indebtedness. The pre-packs conspire, whenever presented, will go about as an impetus in assisting those organizations with enduring.

Since India doesn’t have any earlier administrative involvement in pre-packs, the presentation of this plan would require some genuine thought and due steadiness. The Government should lead a far reaching consider and guarantee that all the issues are killed and a superior instrument is set up.

The COVID-19 episode and the resulting lockdown have influenced the Indian economy antagonistically, making monetary difficulties a few organizations the nation over. In the wake of the common circumstance and to forestall mass indebtedness procedures, the President has proclaimed a law and suspended the recording of new cases under the Insolvency and Bankruptcy Code, 2016 (hereinafter alluded to as “IBC”). The said Ordinance prohibits recording new applications under Sections 7, 9, or 10 of the IBC, for a half year, for any default set off by the COVID-19 emergency happening on or after 25 March, 2020. The choice to suspend IBC will give some breathing space to the organizations. Be that as it may, when the suspension is lifted, the council for example Public Company Law Tribunal (hereinafter alluded to as “NCLT”) will be overwhelmed with bankruptcy applications. Along these lines, it is an advantageous opportunity to return to the forthcoming changes and investigate elective answers for the ordinary corporate indebtedness goal measure (hereinafter alluded to as “CIRP”).

 

Learn more about Insolvency and Bankruptcy Laws with Enhelion’s Online Law firm certified Diploma course by SA Law Attorneys and Solicitors!

Categories
Blog

Analysis of Sexual Harassment Laws at Workplace In USA, UK And UAE

By: Aritra Sarkar 

Sexual harassment at workplace has been considered a crime by the United States labour law since the 1970s. In the USA the sexual harassment at workplace is prevented by Title VII of the Civil Rights Act, 1964.[1] This law protects individuals from discrimination based on sex. It makes it illegal for employers to hire, fire, alter any service conditions, etc. solely based on sex. As per U.S. law, the harasser can be of any sex and the harassment can also happen to any sex. Any general hostility towards sex is considered harassment. There are two types of sexual harassment in U.S. law.[2]

The first type is called the “quid pro quo” sexual harassment. The term “quid pro quo” literally translates to “this for that”. Therefore, this type of sexual harassment occurs when an employee is offered something in return for the satisfaction of the sexual demand of the harasser.[3] In this type of sexual harassment, an employee has to satisfy the sexual demands of the employer to affect employment decisions like hire, fire, promotions, avoid punishments, etc.[4] For being able to claim sexual harassment of the “quid pro quo” nature the employee has to be able to prove that[5]: –

Learn more about Preventing Sexual Harassment at the Workplace with Enhelion’s Online Law firm certified course by Scriboard Advocates and Legal Consultants!

  1. The plaintiff was an employee or has applied for employment in the company or organisation in question.
  2. The plaintiff has to prove that the defendant or the alleged harasser made unwelcome sexual advances to the plaintiff or has engaged in some kind of unwelcome verbal or physical actions of sexual nature.
  3. Certain decisions are influenced, explicitly or impliedly, by the plaintiff’s acceptance or denial of the sexual advances made by the defendant.
  4. During the time of the harassment or the conduct in question, the defendant was a supervisor or an agent of the company or organisation.
  5. The plaintiff was harmed in some form by the conduct of the alleged harasser.

The second type of sexual harassment is “hostile work environment” cases, first established by Meritor Savings Bank v. Vinson[6]. In these cases, sexual harassment makes the workplace uncomfortable, offensive and intimidating. Cases where sexual favours are asked, unwelcome sexual advances are made or any other conduct of sexual nature which makes it difficult for the employee to work comfortably[7].

Courts take into considerations a variety of factors in considering whether a workplace is hostile or not, like[8]–

  1. if the offensive sexual behaviour was through verbal communication or any physical conduct or both;
  2. whether the offensive sexual conduct was repeated multiple times;
  3. if the offensive sexual conduct was hostile or patently offensive;
  4. if the defendant (alleged harasser) was a co-worker or a supervisor;
  5. if other co-workers or supervisors or any staff joined in perpetrating the harassment; and
  6. if the harassment was towards a single individual or a group of persons.

Learn more about Preventing Sexual Harassment at the Workplace with Enhelion’s Online Law firm certified course by Scriboard Advocates and Legal Consultants!

Pre-Civil rights act of 1991

Barnes v. Train[9]– This case was decided in as early as 1974. This case is considered to be the first reported case of sexual harassment at workplace in USA. In this case Barnes, an African-American woman was reportedly fired from her job at Environment Protection Agency after she had refused to submit to the sexual advances made by her employee. Although the case was dismissed, it was appealed again in 1977.

Barnes v. Costle[10]– This was the appeal of the case Barnes v. Train. Although Paulette Barnes, the plaintiff, lost in Barnes v. Train, she won the case on appeal. During this case, the district of Colombia court of appeals rules that if a person suffers tangible employment losses for not submitting to the unwelcomed sexual advances by his/her employer or supervisor then it will be considered as sexual harassment. The decision was partly influenced by the case of Williams v. Saxbe[11] which was decided a year before in 1976. The court also ruled that the company will be liable in case it is not knowingly taking proper action against sexual harassments done by supervisors.

Post-Civil rights act of 1991

Burlington Northern and Santa Fe Railway Co. v. White[12]– In this case, the court broadened the view of sexual harassment conducts to include any altercation in-service conditions or any other decisions that will dissuade an employee to file a suit for discrimination.

Reeves v. C.H. Robinson Worldwide, Inc.[13]– This case was decided as recently as 2010. In this case, it was held that a hostile work environment is created if sexually explicit language or pornography is present. Hostile workplace environment does not have to be targeted towards an individual employee; it might as well be targeted to a group of employees.

UK

In UK, all employees are protected from sexual harassment at workplace by the Equality Act, 2010. The legal definition sexual harassment according to the equality act is- “The Equality Act says it’s harassment where the behaviour is meant to or has the effect of either: violating your dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment.”[14] Besides this general prohibition of sexual harassment section 26 of the Equality Act 2010 specifically provides for 3 different types of sexual harassment: –

  1. Relevant Protected Characteristics– Section 26(1) states that ‘A’ will harass ‘B’ if (a) “A engages in unwanted conduct related to a relevant protected characteristic” (b) for the purpose or effect of (i) “violating B’s dignity”, or (ii) “creating an intimidating, hostile, degrading, humiliating or offensive environment for B.”[15]
  2. Unwanted Conduct of a Sexual Nature- Section 26(2) states that ‘A’ will harass ‘B’ if (a) “A engages in unwanted conduct of a sexual nature” and (b) “the conduct has the purpose or effect referred to in subsection (1)(b).”[16]
  3. Differential treatment- Section 26(3) states that ‘A’ will harass ‘B’ if (a) “A or another person engages in unwanted conduct of a sexual nature or that is related to gender reassignment or sex”, (b) “the conduct has the purpose or effect referred to in subsection (1)(b)” and (c) “because of B’s rejection of or submission to the conduct, A treats B less favourably than A would treat B if B had not rejected or submitted to the conduct.”[17]

Learn more about Preventing Sexual Harassment at the Workplace with Enhelion’s Online Law firm certified course by Scriboard Advocates and Legal Consultants!

Section 26(5) of the Act states lists the relevant protected characteristics, namely, age, disability, gender reassignment, race, religion or belief, sex and sexual orientation.[18]

In 2019 there was a consultation on the context of sexual harassment at workplace and it was decided that the policies regarding workplace harassment should be tightened up. Consequently, the UK equality body and the Equality and Human Rights Commission together published “technical guidance” in January 2020, in consideration that it would become a statutory code of practice once the response to the 2019 consultation is published by the government.[19]

However, there is no specific set of rules which regulates the responsibility on the employers to take pro-active actions in private sector industries, the employers are still expected to take adequate measures to prevent sexual harassment at workplace to avoid being liable for any such misconduct through the principle of vicarious liability. The situation is stricter in public sectors because the Public Sector Equality Duty (PSED) explicitly says that the employers should give due regard to prevent any incidents of sexual harassment at workplace.[20]

UAE

UAE law like most other countries strictly prohibits any kind of sexual harassment at workplace. Sexual harassment in the form of repeated offensive jokes, offensive or sexual comments, unwelcomed touch etc. is prohibited. Any offensive or unwelcoming sexual behaviour if experienced by any woman can be reported to the police or to a lawyer for taking proper actions against it.[21]

Chapter 5 of the federal law no. 3 of 1987 of UAE penal code deals with the crimes that are perpetrated against women. Section 1 deals with Rape and debasement, section 2 deals with Flagrant Indecent Acts and section 3 deals with the enticement to lewdness and prostitution. Sexual harassment in the workplace is covered under section 2 of Chapter 5 of the federal law no. 3 of 1987 of UAE penal code. This section has two articles article 358 and 359.[22]

Article 358 states that “Any person who publicly commits a disgraceful act shall be punished by a jail sentence for no less than six months. The same penalty shall apply to any person who says or commits any act against public morals. Any person, who commits an indecent act with a woman or a boy under the age of fifteen years even if not in public, shall be punished by a jail sentence for no less than one year.”[23]

Here we can see that article 358 of the UAE penal code explicitly protects both women and men below the age of 15 years. The rest of the section does not talk about whether it will be protecting both women and men rather it says to protect against “disgraceful acts” and “against public morals”. However, in my opinion, courts should take a broad view of the above article.

Article 359 states that “Shall be subject to a jail sentence for a term not exceeding one year and/or to a fine not in excess of ten thousand Dirhams, whoever molests a female in an indecent way by words or acts or through electronic means or any other method. Shall be sentenced as well to the same penalty, any male disguised in a female apparel and enters in this disguise a place reserved for women or where entry is forbidden for other than women. Should he perpetrate a crime in this condition, this shall be considered an aggravating circumstance.”[24]

Learn more about Preventing Sexual Harassment at the Workplace with Enhelion’s Online Law firm certified course by Scriboard Advocates and Legal Consultants!

A new article was added under no. 359 bis by virtue of Article 2 of the Federal Decree-Law no. 4/2019 dated 14/08/2019. Article 359 bis states that the perpetrator “Shall be subject to a jail sentence for a term not less than one year and/or to a fine not less than ten thousand Dirhams, whoever commits a sexual harassment crime. Sexual harassment shall mean excessive annoyance of others by repeating acts, words or signals that would molest them, for the purpose of pushing them to respond to their own sexual desires or the desires of others. The penalty shall be a jail sentence for a term not less than two years and/or a fine not less than fifty thousand Dirhams, in case of several perpetrators, in case the perpetrator carries a weapon, or the perpetrator has a functional, family or educational authority over the victim.”[25]

As we can see section 359 bis clearly defines harassment in general and states the punishment for such an act. Furthermore, articles 360 to 370 punishes sexual offences in public but none of the articles however mentions “workplace” explicitly. Nonetheless, because of their general nature, these articles combined can be very helpful in preventing sexual harassment at the workplace.

In conclusion, I would like to say that even though all the three countries discussed in this write-up are having a different set of laws, sexual harassment at workplace is mostly developed in the legal system of USA and UK mainly because of the sheer number of cases there. In UAE most of the articles are general in nature, although they will prevent sexual harassment in the workplace but a separate law explicitly regarding harassment at workplace is essential to take care of matters related to the hostility of the employer towards the employee after he/she reports a sexual harassment case etc.

[1]Staff, “Facts About Sexual Harassment” (U.S. Equal Employment Opportunity Commission, 15 January 1997) <https://www.eeoc.gov/publications/facts-about-sexual-harassment> accessed 17 December 2020

[2]Staff, “Workplace Fairness” (Sexual Harassment – Legal Standards, 2020) <https://www.workplacefairness.org/sexual-harassment-legal-rights> accessed 17 December 2020

[3] Findlaw’s Team, “What Is Quid Pro Quo Harassment?” (Findlaw, 4 December 2018) <https://employment.findlaw.com/employment-discrimination/what-is-quid-pro-quo-harassment.html> accessed 17 December 2020

[4]Staff, “Workplace Fairness” (Sexual Harassment – Legal Standards, 2020) <https://www.workplacefairness.org/sexual-harassment-legal-rights> accessed 17 December 2020

[5] Staff, “What Is Quid Pro Quo Harassment: Discrimination Attorneys” (Swartz, 2 July 2019) <https://swartz-legal.com/employment-law-resources/quid-pro-quo-harassment/> accessed 17 December 2020

 

[6] Mcelroy W, “The Sad Evolution of Sexual Harassment” <http://www.wendymcelroy.com/ifeminists/2004/1027.html> accessed 17 December 2020

[7] Staff, “Workplace Fairness” (Sexual Harassment – Legal Standards, 2020)   <https://www.workplacefairness.org/sexual-harassment-legal-rights> accessed 17 December 2020

[8] Ibid

[9] Barnes v. Train, 13 FEP Cases 123 (D.D.C. 1974)

[10] Barnes v. Costle, 561 F.2d 983 (D.C. Cir. 1977)

[11] Williams v. Saxbe, 413 F. Supp. 654 (1976)

[12] Burlington N. & Santa Fe Ry. Co. v. White, 548 U.S. 53, 126 S. Ct. 2405 (2006)

[13] Reeves v. C.H. Robinson Worldwide, Inc., 594 F.3d 798 (11th Cir. 2010)

[14] Staff, “Harassment” (Citizens Advice, 2020) <https://www.citizensadvice.org.uk/law-and-courts/discrimination/what-are-the-different-types-of-discrimination/harassment/> accessed 17 December 2020

[15] Equality Act 2010, s 26(1) (UK)

[16] Equality Act 2010, s 26(2) (UK)

[17] Equality Act 2010, s 26(3) (UK)

[18] Equality Act 2010, s 26(5) (UK)

[19] Staff, “Sexual Harassment in the Workplace in the United Kingdom” (CMS Law/Tax 27 October 2020) <https://cms.law/en/int/expert-guides/cms-expert-guide-on-sexual-harassment-in-the-workplace/united-kingdom> accessed 17 December 2020

[20] Ibid

[21] Elhais H, “What Are Your Legal Rights Under Sexual Harassment? – Criminal Law – United Arab Emirates” (Mondaq, 6 September 2019) <https://www.mondaq.com/crime/843168/what-are-your-legal-rights-under-sexual-harassment> accessed 17 December 2020

[22] Federal Law No. 3 1987

[23] Federal Law No. 3 1987, art 358

[24] Federal Law No. 3 1987, art 359

[25] Ibid

 

Learn more about Preventing Sexual Harassment at the Workplace with Enhelion’s Online Law firm certified course by Scriboard Advocates and Legal Consultants!