Legal & Industry Updates - May 2025
SPECIAL EVENTS
Webinar on ‘Evolving Legal Education in the age of Artificial Intelligence (“AI”)’, 24th May, 2025
The team at Ivy Law participated in a webinar on ‘Evolving Legal Education in the age of AI’ organized by the Remaiah University, Bengaluru. The webinar focused on the need to transform legal education in the age of AI and particularly emphasized on how the traditional models of teaching law must now integrate interdisciplinary knowledge, digital literacy, and ethical foresight to prepare lawyers for a rapidly evolving future. It further stressed on the urgent reforms needed in legal pedagogy, institutional strategies for building tech-forward law schools, the growing importance of cybersecurity in legal frameworks, and practical approaches to embedding AI tools. Merging career pathways at the intersection of law and technology, ranging from AI ethics and policy advisory roles to legal tech entrepreneurship, compliance in automated systems, and data protection law, were also deliberated upon.
LEGAL & INDUSTRY UPDATES
Companies (Indian Accounting Standards) Amendment Rules, 2025 (“Rules, 2025”) (source)
The Ministry of Corporate Affairs (“MCA”), on 7th May, 2025, has notified the Rules, 2025, with the aim to accurately capture the impact of transactions conducted by firms in foreign currency on their financial statements. Major amendments under Rules, 2025 include:
Amendment to Ind AS 7 (Statement of Cash Flows), wherein, post the amendment, enhanced disclosure on non-cash transactions is required and the companies must now present reconciliation of liabilities from financing activities.
Amendment to Ind AS 21 (The Effects of Changes in Foreign Exchange Rates), clarifying treatment for deferred foreign exchange items and reducing ambiguity in case of long-term foreign currency monetary items.
MCA Orders Investigation into Various Renowned Companies for Corporate Governance Violations (source)
MCA has ordered investigation into various companies and their related entities for potential corporate governance violations. The probe was initiated under Section 210 (Investigation into affairs of company) of the Companies Act, 2013, which empowers the Central Government (“CG”) to investigate into company’s affairs and if the probe reveals serious allegations of fraud, the CG could hand over the probe to the Serious Fraud Investigation Office. Promoters of these companies have also been under investigation by the Securities and Exchange Board of India (“SEBI”) for alleged fund diversion and document falsification. Further, the Enforcement Directorate is also examining the companies for potential foreign exchange violations.
SEBI Mandates Cooling-Off Period for Directors at Market Infrastructure Institutions (source)
SEBI, on 3rd May, 2025, has notified the Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Third Amendment) Regulations, 2025 wherein it has prescribed a mandatory cooling-off period for directors before they can join a competing institution, with the aim to strengthen the governance framework of market infrastructure institutions (“MII”) like stock exchange, clearing corporations and depositories. After the expiry of the term at an MII, a public interest director can be appointed with the prior approval of SEBI for a further term of three years in another stock exchange, clearing corporation or a depository. SEBI further clarified that the cooling-off period would be applicable only in case of an appointment as a public interest director in a competing MII.
Reserve Bank of India (“RBI”) Proposes to Ease Norms for Investments in Alternate Investment Funds (“AIFs”) by Banks, Non-Banking Financial Companies (“NBFCs”) (source)
The RBI, on 19th May, 2025, has proposed to ease norms for investments by banks, NBFCs and other regulated entities (“REs”) in AIFs. In December 2023, the RBI had issued guidelines relating to investment by the REs in AIFs, with the objective of addressing certain concerns relating to possible evergreening through this route. However, in view of the recent developments, RBI has proposed that a single RE's contribution to any AIF scheme should be capped at 10% of its corpus. Collectively, a ceiling of 15% shall apply for investment by all REs in an AIF scheme. The RBI further proposed that it may exempt certain AIFs, in consultation with the CG, that have been setup for strategic purposes.
Bar Council of India (“BCI”) Revises Rules for Foreign Lawyers and Firms (source)
As per the new rules set out by the BCI, foreign lawyers visiting India to handle client matters will now have to inform the BCI before coming as well as disclose some client details, with the aim to protect the interest of Indian lawyers. Prior to the rules, India only allowed a fly-in and fly-out system for foreign lawyers, however, foreign lawyers who do not open offices and want to continue flying in now face stricter requirements namely, filling in a declaration disclosing the client's name and contact information. The rules reiterated that lawyers can't stay in India for more than 60 days in a 12-month period. The new rules also stipulate that law firms intending to set up offices in India will need to submit a no-objection certificate from the CG stating that an effective legal system exists in foreign countries whose laws the applicant wishes to practice in India.
Supreme Courts (“SC”): Courts Can Modify Arbitral Awards (source)
SC has held that the courts can modify arbitral awards under Arbitration & Conciliation Act, 1996 (“A&C Act”). The verdict is said to impact domestic and international arbitral awards in commercial disputes. However, the Chief Justice of India has asserted that the court has limited power to modify arbitral awards under Sections 34 (Application for setting aside arbitral awards) and 37 (Appealable orders) of the A&C Act and should exercise due caution while modifying arbitral awards. Further, Article 142 (Enforcement of decrees and orders of SC and orders as to discovery, etc.) of the Constitution of India also empowers the SC to pass any decree or order necessary for doing complete justice in any case or pending matters.
SC: National Company Law Appellate Tribunal (“NCLAT”) Can Only Condone Maximum 15-Days Delay in Filing Appeals Under the Insolvency and Bankruptcy Code, 2016 (“IBC”) (source)
The SC has held that NCLAT can only condone delays in filing appeals up to a maximum of 15 days under the IBC. The IBC has prescribed strict timelines for filing appeals and taking legal action to ensure insolvency proceedings are not misused to recover time-barred debt, with the aim to preserve the speed and certainty of the insolvency resolution process. Condonation of delay means allowing a court or authority to overlook a delay in filing application, even if it’s beyond the prescribed limit. As per law, the proviso to Section 61(2) (Appeals and Appellate Authority) of the IBC clearly limits the NCLAT’s jurisdiction to condone delay only up to 15 days beyond the initial 30-day period.
CG Engaged in Working on Amendments to IBC (source)
As reported, CG is working on amending the IBC, including the provision related to bidders requiring the Competition Commission of India (“CCI”) approval for resolution plans involving combination before they approach the Committee of Creditors (“CoC”), with the aim to improve the insolvency ecosystem, reduce the resolution timelines and ease burden on the CCI. Among other provisions, amendments are likely in Section 31(4) (Approval of resolution plan) of the IBC that requires bidders to seek approval from the CCI before submitting their resolution plans to the CoC. Further, for resolution plans that have a provision for combination, as referred to in section 5 (Combination) of the Competition Act, 2002, the resolution applicant shall obtain the approval of the CCI under that act prior to the approval of such resolution plan by the CoC.
The Competition Commission of India (Determination of Cost of Production) Regulations, 2025 (“Regulations, 2025”) (source)
CCI has notified the Regulations, 2025 for determining the cost of production, a move that would help the CCI to more effectively assess alleged predatory pricing and deep discounting practices especially in the quick commerce and e-commerce segments. Rather than prescribing sector-specific metrics, the new framework allows for case-by-case assessment which would enable the CCI to consider the unique features and evolving dynamics of digital markets when evaluating alleged predatory conduct. The CCI has further asserted that the Regulations, 2025 would establish a sector agnostic, cost-based framework which is flexible and adaptable to various industries, including the digital economy.
Ministry of Finance (“MoF”) Urges Banks to Expedite Non-Performing Asset (“NPA”) Resolution Process by Minimizing Delays at National Company Law Tribunal (“NCLT”) (source)
The MoF has urged banks to accelerate the resolution of pending cases at NCLT by minimizing delays in filing Corporate Insolvency Resolution Process applications and avoiding unnecessary adjournments, with the aim to strengthen the recovery framework through coordinated efforts and improve the effectiveness of insolvency resolution process. Further, MoF has also advised banks to regularly review 20 cases and monitor accounts with the resolution plans with the CoC pending for more than three months.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.