Corporate Amicus, May 2026

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Article

Risk allocation in commercial contracts

By Raghavan Ramabadran, Krithika Jaganathan and Nirupama Shankar

In addition to outlining counter-obligations, commercially sound agreements should anticipate a response to unforeseen regulatory shifts, operational delays, and disruptions (be it natural or manmade). The article in this issue of Corporate Amicus examines popular mechanisms for contractually allocating and limiting risks to the benefit of all parties, like clauses for events of force majeure and change-in-law to provision for uncertain contingencies, and clauses for liquidated damages and limitation of liability to calibrate financial exposure. The authors in this regard discuss various precedent case law and provisions of the Contract Act. According to them, as commercial relationships grow more complex, the importance of risk allocation lies in anticipating disruption as well as managing its consequences with clarity.
 

Notifications and Circulars

• Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026 – Key changes
• Foreign Exchange Management (Authorised Persons) Regulations, 2026 – Highlights
• Foreign Exchange Management (Non debt Instruments) (Amendment) Rules, 2026 – Key changes
• Foreign Exchange Management (Non debt Instruments) (Second Amendment) Rules, 2026 – Key changes
• SEBI issues Advisory on Emerging AI Tools for Vulnerability Detection in Securities Market Ecosystem
• RBI issues Operating Framework for facilitating Outward Remittance Services by Non bank Entities through AD Category I Banks
• RBI (Commercial Banks – Classification, Valuation, and Operation of Investment Portfolio) Second Amendment Directions, 2026 – Key changes
• SEBI clarifies status of SPVs post conclusion or termination of concession agreements under InvIT Regulations
   

Ratio decidendi

• Allegations of fraud or misuse in registered transactions require foundational proof first before burden shifts to the other party – Supreme Court
• Party that agreed in writing to extend the arbitral mandate cannot later challenge the award on expiry grounds – Supreme Court
• Company’s incapacity under winding-up proceedings cannot invalidate arbitral award against its promoters in their personal capacity – Kerala High Court
• NCLT cannot enforce contracts like specific performance but can examine contractual arrangements to assess fairness and conduct in company’s affairs – NCLT
• Section 9 insolvency petition warrants dismissal where pre-existing disputes on work quality and completion existed before demand notice and the work order was terminated – NCLAT
   

News Nuggets

• CCI proposes relaxed timelines for commitment mechanism in antitrust cases
• SEBI explores Tokenisation Framework to deepen corporate bond market liquidity
• Swiggy falls short of criteria to qualify as Indian-owned and controlled company
• Renewed push for Tata Sons listing highlights ongoing governance concerns
• CCI approves Adani Power’s acquisition of GVK Energy under insolvency framework
• CCI clears joint venture between Tata Group and Mercuria in energy sector
• SME-focused Alternative Investment Fund signals continued capital formation