Business Law International (BLI)

At a global level, environmental, social and governance (ESG) considerations continue to have increasing relevance in M&A transactions. Undoubtedly, ESG factors have become key drivers in private equity (PE) and venture capital (VC) deals because a target’s strong ESG performance can increase its long-term value. On the other hand, a target’s poor ESG performance can create reputational and financial risks for the buyer. Because of this, it is crucial for PE and VC funds to assess ESG factors and the target’s alignment with them.

With its Action Plan on sustainable finance, the European Commission has been a first mover, imposing a series of obligations and standards that have a direct impact on the European capital market, but also indirectly on markets in non-EU countries such as the UK and the US. When PE and VC funds operate in the European market and elsewhere they must now meet strong sustainability standards and expectations to attract capital and raise funds from investors in the Western Hemisphere.

Obviously, in the global PE and VC markets, EU PE and VC funds are more affected than non-EU funds; however, beyond regulatory obligations, the impact of ESG factors and risks on mainly PE transactions can be attested. With regard to VC deals, the impact of ESG risks and factors is currently variable depending mainly on the size of the deal and the sector of the target. Best practice in PE transactions isn’t reflected as frequently in VC transactions with the exception of scale-up rounds where the size of the target and the size of the investments (including A rounds) increasingly require an ESG-oriented approach.

Given the relevance of EU regulation and the scope of its application, this analysis is based on the European perspective; however, it is also applicable to non-European funds, which often market their funds into the EU, for example US and UK funds, and is often used as the reference framework of a market standard that is being created in the PE and VC industry. Considering the wide range of implications of ESG factors in PE and VC transactions, this legal analysis is focused only on non-listed companies.

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Gender equality in boardrooms is losing momentum. Some countries have already made efforts to compensate for the underrepresentation of women on boards through legislative action – an approach that is now also being pursued by the European Union with the adoption of the so-called ‘Women on Boards’ Directive (EU) 2022/2381. This article provides an overview of the regulations passed and sheds light on their background. It also compares the different national approaches to improving female representation on boards and their effectiveness, focusing on the goal of promoting long-term change in gender diversity.

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The world is experiencing the effects of increased globalisation at a transcendental speed. One of the key factors behind such globalisation is foreign direct investment (FDI). FDIs often outperform government aids and portfolio investments, as one of the largest sources of non-debt external financing. In addition to the direct benefit of capital inflows that FDIs bring, certain indirect benefits follow suit. Access to diversified international markets, an increase in domestic supply chains, reforms in domestic laws and regulation to keep pace with modernisation are key indirect benefits, which have made FDIs an attractive option for domestic markets.

However, while modern governments are well informed about the lucrativeness of FDIs coming from resource-rich destinations, many countries have begun to implement rigid screening mechanisms before permitting FDI inflows. The rise of opportunistic takeovers and foreign investments made with undesirable motives has propelled an increase in FDI screening mechanisms across countries.

The first part of this article aims to understand the general rise of protectionism in the formulation of FDI policies and the impact of the Covid-19 pandemic on the same. The second part involves an analysis of Indian FDI regimes with a protectionist character. Finally, in the third part, the authors compare the Indian FDI regime with other FDI regimes around the world, to identify protectionism in FDI laws.

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Venture debt is an attractive alternative for startups that need to raise funds to expand their growth. Moving away from venture capital and traditional loan lending, venture debt is composed of different terms and standard provisions that allow it to work in the venture ecosystem. So how do these terms work and what are the items that a loan agreement will include as standards of the industry?

This article will first consider structural terms, without which a venture debt agreement would not exist. These are the parties involved (lender and borrower), the amount lent (which varies depending on the lender), the term of the loan (usually 36 to 48 months) and the interest rate (which is both a structural term and a pricing term). Secondly, the article looks at pricing terms, which include all elements of payment from the company to the venture lender. These include interest rates, additional fees such as commitment fees, prepayment fees and other kinds of fees, collateral (mainly intellectual property and/or an all-asset lien) and warrants (an equity interest on the company).

Finally, the article looks at legal terms, which include additional obligations and provisions to avoid or engage the borrower in actions that benefit the loan. These include standard provisions such as closing conditions, representations and warranties, and covenants (either positive, negative and, less commonly, financial covenants), as well as other provisions, such as the material adverse change (MAC) clause, the investor abandonment clause and the event of default provision. These terms are particularly a matter of negotiation in a venture debt deal, and in any case each agreement will find a balance for the lender and borrower for venture debt to work in the specific context.

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The majority of class action lawsuits in privacy and data protection in the United Kingdom have not succeeded. This may appear surprising, given the breadth of data rights found in the UK GDPR, the Data Protection Act 2018 and the development of the tort of misuse of private information. This article reviews the cases to date, including the most recent attempt in Prismall v Google UK Limited [2023] EWHC 1169 (KB), and examines why class action lawsuits – generally referred to as ‘group litigation’ in England – have failed to provide results for individuals whose data and information have been misused or inadequately protected.

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In the recent case of Philipp v Barclays Bank UK PLC [2023] UKSC 25 in England, the Supreme Court confirmed that the Quincecare duty of care does not extend to circumstances where a customer gives explicit instructions to a bank to make a payment. This article considers the Philipp v Barclays Bank UK PLC case in more detail, revisiting the Quincecare duty of care owed by banks and the position at law going forward, including as a result of changes to laws and guidelines that have arisen in light of the facts in this case to address advance push payment fraud. It looks at key considerations for business customers and banks to ensure that they take proactive measures to align themselves with the evolving legal landscape.

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• Volume 24 Number 3, September 2023
• Volume 24 Number 2, May 2023
• Volume 24 Number 1, January 2023
• Volume 23 Number 3, September 2022
• Volume 23 Number 2, May 2022
• Volume 23 Number 1, January 2022
• Volume 22 Number 3, September 2021
• Volume 22 Number 2, May 2021
• Volume 22 Number 1, January 2021
• Volume 21 Number 3, September 2020
• Volume 21 Number 2, May 2020
• Volume 21 Number 1, January 2020
• Volume 20 Number 3, September 2019
• Volume 20 Number 2, May 2019
• Volume 20 Number 1, January 2019