DEAL CERTAINTY REVISITED: MAC CLAUSES AND THE SPECIFIC RELIEF (AMENDMENT) ACT, 2018 IN INDIAN M&A
Harsh Raj, B.A. LL.B. (Hons.), Final Year, Gitarattan International Business School, Guru Gobind Singh Indraprastha University (GGSIPU), New Delhi (India)
Sonia Arora, B.A. LL.B. (Hons.), Final Year, Gitarattan International Business School, Guru Gobind Singh Indraprastha University (GGSIPU), New Delhi (India)
Indian scholarship on merger and acquisition practice has generally treated Material Adverse Change clauses and the Specific Relief (Amendment) Act, 2018 as separate conversations: the former a matter of transactional drafting and the latter a matter of general contract remedies. This paper argues that the two are connected in a way the existing literature has not mapped and develops that connection through doctrinal analysis of Indian and, by way of comparison, Delaware authority. Reported Indian jurisprudence directly interpreting Material Adverse Change clauses in private acquisition agreements remains limited. The closest available body of Indian authority arises instead from the Securities and Exchange Board of India’s open-offer jurisprudence, which has consistently read materiality thresholds narrowly, close to a standard of genuine impossibility of performance. Separately, the Specific Relief (Amendment) Act, 2018 restructured the remedial landscape governing breach of contract by substituting Section 10 of the Specific Relief Act, 1963 and repealing the general judicial discretion previously found in Section 20, while preserving specific statutory conditions under Sections 11(2), 14 and 16. This paper contends that these two developments, read together, have meaningfully strengthened the practical significance of specific performance as a response to a buyer’s attempt to invoke a weak Material Adverse Change clause, without rendering that remedy automatic. The paper is deliberately precise about the limits of this claim, noting that the Supreme Court’s treatment of retrospectivity has moved beyond the earlier uncertainty in Sughar Singh and Haridasan: a three-judge Bench in Katta Sujatha Reddy held the 2018 amendment prospective from 1 October 2018, but that judgment was later recalled in review, leaving the doctrinal position more procedurally complex than a simple ‘resolved’ or ‘unresolved’ formulation permits. The paper concludes with concrete recommendations for drafting practice and identifies the interaction between these two bodies of law as an area meriting further doctrinal attention.
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| Research Paper | LawFoyer International Journal of Doctrinal Legal Research (LIJDLR), Volume 4, Issue 3, Page 955–972. |
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