Blog

– Kailash Ram, Associate The Indian real estate sector has faced significant turbulence, marked by numerous stalled projects, developer defaults, and the plight of homebuyers left with uncertain investments. Prior to 2016, resolving such distress was fragmented and protracted. The enactment of the Insolvency and Bankruptcy Code, 2016, marked a watershed moment, providing a consolidated, time- bound framework aimed at resolving insolvency, maximizing asset value, and balancing the interests of all stakeholders, including the long-neglected homebuyers. The IBC operates alongside the Real Estate (Regulation and Development) Act, 2016, which primarily focuses on project regulation and buyer protection, while the IBC addresses the financial distress and insolvency of the developer entity itself. Auto-renewal clauses are contractual provisions that facilitate the automatic renewal of services for a subsequent term unless terminated by the consumer within a specified period. These clauses are typically drafted to favour. Unique Challenges Addressed by IBC in Indian Real Estate The IBC framework had to grapple with sector-specific complexities: The IBC Framework and Real Estate Insolvency The IBC introduced the Corporate Insolvency Resolution Process (CIRP), a structured mechanism applicable to distressed real estate companies: Empowerment of Homebuyers under IBC: A Landmark Shift Perhaps the most significant impact of the IBC on real estate has been the empowerment of homebuyers: Innovative Resolution Mechanisms Evolving under IBC Recognizing that a ‘one-size-fits-all’ approach doesn’t work for real estate, the IBC framework has seen significant evolution through regulations and judicial interpretation: Ongoing Challenges Despite significant progress, challenges persist: Conclusion The Insolvency and Bankruptcy Code, 2016, has fundamentally reshaped the landscape for resolving distress in India’s real estate sector. By granting homebuyers the status of financial creditors and fostering innovative, sector- specific solutions like project-wise resolution and Reverse CIRP, the IBC framework, guided by judicial interpretation and regulatory adaptation, strives to move beyond mere liquidation towards viable project completion and stakeholder value maximization. While challenges in implementation remain, the IBC provides a dynamic and evolving legal tool critical for addressing insolvency crises and restoring confidence in the Indian real estate market.

Introduction Emergency Arbitration is swiftly gaining traction as a preferred route for urgent interim relief in high-stakes international disputes. It offers a fast-track mechanism for parties seeking to preserve their rights before the full constitution of an arbitral tribunal. However, in the Indian context, the legal enforceability of Emergency Arbitrators’ orders has historically resided in a grey zone. This presentation delves into the evolving judicial approach in India, the legislative lacunae under the Arbitration and Conciliation Act, 1996, and how recent landmark judgments are reshaping the enforcement landscape. Understanding Emergency Arbitrators Emergency Arbitrators (EAs) are specially appointed by arbitral institutions to grant interim relief in urgent cases—typically before the arbitral tribunal is formally constituted. This mechanism is widely recognised and utilised under institutional rules of arbitral bodies such as the Singapore International Arbitration Centre (SIAC), the International Chamber of Commerce (ICC), and the London Court of International Arbitration (LCIA). EAs empower parties to prevent irreparable harm and maintain status quo in time-sensitive disputes. Nevertheless, because they derive authority solely from institutional rules and not domestic statutes, their recognition in municipal legal systems like India’s remains limited and contested. Legal Gap in Indian Arbitration Law The Arbitration and Conciliation Act, 1996, as it currently stands, does not make any express provision for Emergency Arbitrators or the enforceability of their decisions. Indian law allows for interim relief under Section 9 (courts) and Section 17 (arbitral tribunals), but since EAs operate before a tribunal is formally constituted, their jurisdiction falls outside these provisions. This legal vacuum has posed a long-standing barrier to the seamless adoption of Emergency Arbitration in India, especially when it comes to domestic arbitrations or ad hoc proceedings. Amazon v. Future Retail – A Precedent A watershed moment in India’s Emergency Arbitration jurisprudence came in the Amazon.com NV Investment Holdings LLC v. Future Retail Ltd. case. The dispute arose when SIAC’s Emergency Arbitrator issued an interim order restraining Future Retail from proceeding with a deal with Reliance. Amazon sought to enforce the order in India, sparking a legal battle that reached the Supreme Court. Both the Delhi High Court and the Supreme Court upheld the enforceability of the emergency award, recognizing it under Section 17(1) of the Arbitration and Conciliation Act. The case underscored judicial willingness to honour party autonomy and institutional rules, thus signalling a paradigm shift in India’s approach to Emergency Arbitration. Supreme Court’s Recognition of EAs In its 2021 decision, the Supreme Court firmly established that orders issued by Emergency Arbitrators are enforceable under Section 17(1) of theArbitration Act. The Court highlighted the importance of party autonomy—the freedom of parties to select institutional rules that permit Emergency Arbitration— as a cornerstone of modern arbitration. It clarified that there is no statutory embargo preventing courts from recognising and enforcing such orders. This judgment marked a turning point by bringing Emergency Arbitration out of the legal shadows and into the realm of enforceable interim mechanisms under Indian law. Remaining Challenges and Ambiguities While judicial recognition is a welcome development, Emergency Arbitration still faces several hurdles in India. The absence of express statutory recognition continues to cast doubt on the enforceability of emergency orders, particularly in domestic arbitrations. Different High Courts have adopted varying interpretations, and procedural inconsistencies persist due to the lack of uniform legislative guidance. Questions around the binding nature of EA orders, appeal mechanisms, and their place in the Indian legal hierarchy remain unresolved. A formal legislative amendment acknowledging Emergency Arbitrators and clearly outlining their powers and limits would help harmonise practice and boost investor confidence. Implications for Commercial Contracts For commercial entities—especially those engaged in high-value, cross-border transactions—incorporating institutional arbitration rules that support Emergency Arbitration is increasingly advisable. Well-drafted arbitration clauses referencing bodies like SIAC or ICC can provide access to rapid interim relief mechanisms and facilitate smoother enforcement within India. However, until India’s legislative framework evolves, the enforceability of such orders will depend largely on judicial discretion, party cooperation, and the jurisdictional alignment of the dispute. Legal teams must proactively structure contracts and arbitration strategies to navigate these complexities and maximise the utility of Emergency Arbitration.

The evolution of money from paper-based to digital forms is now entering a transformative phase with the advent of Central Bank Digital Currencies (CBDCs). As sovereign-backed digital currencies gain traction globally, legal systems are grappling with the implications of this paradigm shift. While CBDCs promise efficiency, financial inclusion, and real-time settlements, they also introduce a spectrum of legal and regulatory challenges. The potential for disputes—ranging from privacy concerns to cross-border jurisdictional issues—raises critical questions about how legal systems must adapt to manage the risks associated with this digital evolution. The Emergence of CBDCs CBDCs are digital versions of a country’s sovereign currency, issued and regulated by the central bank. Unlike cryptocurrencies such as Bitcoin, which operate on decentralized networks, CBDCs are centralized and backed by government authority. Several countries—including China, India, and the Eurozone—are piloting or actively developing their own CBDCs to modernize payment systems, combat illicit financial flows, and maintain monetary sovereignty in the face of private digital currencies. Legal Risks in the Rise of CBDCs 1. Data Privacy and Surveillance Concerns One of the most pressing legal challenges surrounding CBDCs is the potential erosion of financial privacy. Since transactions are recorded on centralized ledgers, governments may gain unprecedented access to citizens’ spending behavior. This raises constitutional concerns, especially in democracies where the right to privacy is protected, such as under Article 21 of the Indian Constitution post Puttaswamy v. Union of India. Balancing transparency for regulatory oversight with the protection of individual privacy rights will be a key legal battleground. 2. Jurisdiction and Cross-Border Disputes CBDCs could radically alter cross-border transactions, potentially bypassing the SWIFT network and conventional correspondent banking systems. This introduces complex legal questions regarding jurisdiction, enforceability of contracts, and conflict of laws. Disputes may arise where transactions involve parties in multiple countries with differing legal frameworks for digital currencies. There is a pressing need for international consensus or treaties to regulate CBDC interoperability and dispute resolution. 3. Consumer Protection and Legal Recourse With CBDCs, the interface between users and the digital currency system may be managed by intermediaries such as commercial banks or fintech platforms. In the event of system failure, fraud, or erroneous transactions, liability may become a legal grey area. Consumers must be afforded adequate protection, including clear mechanisms for redressal and compensation. Legislatures will need to update existing consumer protection laws or create specialized frameworks for digital finance. 4. Cybersecurity and Operational Risks Given that CBDCs are built on digital infrastructure, they are vulnerable to hacking, technical glitches, and systemic cyber threats. Any breach can have significant implications for financial stability and national security. Legal frameworks must therefore mandate stringent cybersecurity standards and allocate responsibility in cases of breach or service outage, especially when such incidents affect public trust and economic continuity. 5. Monetary Policy and Legal Autonomy CBDCs may also disrupt traditional monetary policy tools. For example, if the public begins to hold CBDCs instead of commercial bank deposits, it could reduce banks’ ability to lend, affecting credit creation. Legal questions about the role of central banks, the autonomy of monetary policy, and the permissible scope of direct financial intervention will arise. Legislatures must delineate clear mandates for central banks in a CBDC-driven economy. Conclusion The rise of Central Bank Digital Currencies marks a historic juncture in the evolution of money. However, alongside the potential benefits lie significant legal risks that cannot be ignored. For CBDCs to function effectively and equitably, a comprehensive legal framework is imperative—one that harmonizes innovation with constitutional rights, international cooperation with national sovereignty, and economic efficiency with legal accountability. As jurisdictions like India move forward with digital rupee pilots, the legal community must proactively engage in shaping policies and regulatory responses to ensure that the digital future of money is not only efficient but also just and secure.