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ARTICLE · 01 JUNE 2017

RBI On Downside Protection – Are We Set For Course Correction?

The article analyses two landmark judgments, NTT Docomo Versus Tata Sons and Cruz City Versus Unitech delivered by two coordinated benches of Delhi High Court.

IndiaCorporate/Commercial Law
Abstract

The article analyses two landmark judgments, NTT Docomo Versus Tata Sons and Cruz City Versus Unitech delivered by two coordinated benches of Delhi High Court. It delves upon the courts taking a view on the regulatory autonomy of RBI in dealing with foreign exchange remittance between JV ventures parties, especially in the context of 'put option', damage/indemnity payouts.

Hitherto, the RBI, quite literally had the last word on the interpretation of the provisions of law and policy involving issues around foreign exchange. In that context, the judgment of Delhi High Court in the Docomo Case that RBI will be bound by the determination of a foreign Arbitral Tribunal that no permission of RBI is required for remittance of damages payout from a resident to Non-resident entity, assumes greater significance. The Delhi High Court Judgment in the Docomo Case, by disallowing RBI to intervene purely on technical grounds has come tantalizingly close to

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