INDIA Law and Practice Contributed by: Kunal Chandra, Kabeer Mathur, Chinmay Bilgi, Sharnam Vaswani and Rajdeep Mukherjee, Trilegal
information access. The ultimate decision to tender shares rests entirely and exclusively with the share - holders.
sistently categorising them as unenforceable penalties unless the claiming party can explicitly quantify cor - responding actual damages.
10. Litigation 10.1 Frequency of Litigation
11. Activism 11.1 Shareholder Activism
In recent years, there has been an increase in M&A- linked disputes, particularly in relation to earn-out calculations, indemnity claims and, in certain cases, minority shareholder allegations of oppression or mismanagement. Having said that, litigation arising from M&A transactions in India remains uncommon as compared with other M&A markets. Where disputes do arise, they are typically resolved through negoti - ated settlements or arbitration rather than through court processes. 10.2 Stage of Deal The majority of M&A disputes arise as post-closing disputes after a deal has completed, typically centring on the interpretation of deal agreements. Common post-closing disputes include claims relating to fraud or failure to disclose material information, breaches of representations and warranties, shareholder dis - putes and valuation disagreements. Indemnity claims have also found success where watertight indemnity provisions have provided effective protection to the non-defaulting party. Pre-closing disputes do arise, though less frequently. These include no-deal claims, where a party seeks to terminate a transaction and recover termination fees for breach, as seen in the Sony-Zee Entertainment dispute and intervention by non-transacting parties seeking to enforce contractual rights under exist - ing shareholder agreements, as demonstrated in the Amazon–Future Group matter, where an emergency arbitration injunction was upheld by the Supreme Court of India. 10.3 “Broken-Deal” Disputes Post-pandemic disputes established that Indian courts impose a high burden of proof for termina - tion based on material adverse effect (MAE)/material adverse change (MAC). Furthermore, courts exhibit a reluctance to enforce contractual break-up fees, con -
Shareholder activism in India is becoming increas - ingly visible, driven largely by domestic institutional investors, mutual funds and influential proxy advisory firms. Despite this growing activism, many Indian list - ed companies are still controlled by promoter groups. As a result, activist investors rarely attempt to replace management or take control of the board. Instead, shareholder interventions in India typically focus on strengthening governance standards, improving trans - parency and closely reviewing transactions involving potential conflicts of interest, including related-party arrangements. 11.2 Aims of Activists Shareholder activism in India, while growing, remains considerably less frequent and effective than in West - ern jurisdictions. Unlike Western activists, who rou - tinely agitate for major M&A transactions or forced divestitures, Indian activism tends to be more targeted and reactive, focusing on governance and minority protection concerns rather than driving corporate transactions. Where activism has occurred, it has primarily involved challenging related-party transactions perceived as prejudicial to minority shareholders, questioning exec - utive compensation and demanding stronger ESG frameworks. For example, in July 2025, Zee Entertain - ment’s proposal to issue preferential warrants worth INR22.37 billion to entities linked to the promoter fam - ily was rejected after securing only 59.5% shareholder approval, falling short of the required 75% threshold, following opposition from institutional investors and proxy advisory firms citing dilution concerns. This illustrates the nature of Indian activism – directed at structural fairness and minority protection rather than at driving or blocking M&A transactions.
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