Course Code: BSL605 Course Title: Legal Aspects of Business

Course Instructor: Dr. Sachin

Academic Task No.: CA-2 Academic Task Title: Case Study

Date of Allotment: 7th August, 2020 Date of submission: 4th September 2020

Student’s Roll no:Q1943 (A16) Student’s Reg. no: 11907407

Evaluation Parameters:

Learning Outcomes: Gain knowledge about legal aspects of business. What are different types of
agreements and acts.

Declaration: I declare that this Assignment is my individual work. I have not copied it from any other
student’s work or from any other source except where due acknowledgement is made explicitly in the
text, nor has any part been written for me by any other person.

Student’s Signature: Rahul Sethi

Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator’s Signature and Date:

Marks Obtained: _______________ Max. Marks: ____________

Case No 1

MIAL sale | Investors send legal notice, cite “breach of contract” by GVK: Report

Introduction - Investors of MIAL (Mumbai International Airport) has sent a legal notice to GVK group
and its key landers opposing the sale of airport to Adani Group. They coated that if this deal happens it
would be a breach of contract. NIIF (National Investment and Infrastructure Fund), ADIA (Abu Dhabi
Investment Authority) and PSP (Canada’s Public Sector Pension) have sent legal notice to GV Sanjay
Reddy and executives of State Bank of India, Goldman Sachs India, HDFC Bank, Punjab National Bank,
ICICI Bank and Axis Bank. NIIF, ADIA and PSP claim that they and GVK are in legal agreement till 27
January 2021. And the agreement states that GVK is prohibited from any bilateral deals or negotiations
with competing parties.

Plaintiff – Investors of NIIF, ADIA and PSP

Defendant – GVK

Others - State Bank of India, Goldman Sachs India, HDFC Bank, Punjab National Bank, ICICI Bank and
Axis Bank.

Issue Raised- NIIF, ADIA and PSP claim that GVK are bounded by legal agreement that was signed in
October 2019. Under this agreement GVK is prohibited from any bilateral deals or negotiations with
competing parties. Investors further added that they have been committed to deal and remain committed.
They also point out that they had paid $300 million in an escrow account for nine months as a sign of
Intent to Invest. The notice points out that the investors have allowed GVK “limited exception to explore
alternative transactions” but added that “execution or binding agreement till January-end would be a
breach of the binding document. The matter is under judicial consideration with an arbitration tribunal.

Rule of Law-

There is breach of contract by GVK Group Under section 39 of the Indian Contract Act 1872.

Analysis

NIIF, ADIA, and PSP send legal notice to GVK group. They state that GVK group is breaching the
contract which they signed in year 2019. Under this contract GVK has no authority to sell airports to any
competitor. Contract state that GVK is allowed to look for alternate transactions but with limited
expectations. Investors said that they came in contract and agreed to buy 79% of Stake in GVK Airport
holdings for RS 7614 crores and they had paid $300 million in escrow account for nine months as a sign
of intent to invest in GVK Airport. Escrow means a third party which receives and disburses money or
property for the primary transacting parties. The disbursement of funds is dependent on the conditions
agreed to by the transacting parties. So they paid a kind of token money and they are still interested in
buying. They claim that company is bounded till 21 January 2021 and also prohibits GVK from bilateral
deals and negotiations. Further the matter is carried forward and GVk challenged the decision and they
cleared that the deal collapsed because consortium had withdrawn funds from the escrow account without
permission from the arbitral tribunal.
Conclusion

Since all the parties are under subjudice with an arbitration tribunal, so decision can be in favor of any
party. But it seems that GVK cleared things and if the claim is correct then NIIF, ADIA and PSP cannot
claim for shares.

Case No 2

UCLA sues Under Armour for more than $200 million, citing breach of contract

Introduction – UCLA has filed a lawsuit against Under Armour that seeks more than $200 million in
damages. UCLA said that company breach contract by failing to make scheduled payments or deliver its
product as promised. Under Armour was terminating the 15 year contract with UCLA. Contract was
signed in 2016 and it was known as the largest apparel sponshership deal in history of college sports.
Under Armour backed out deal in less then three years with more than $ 200 million left to be paid.

Plaintiff – UCLA

Defendant – Under Armour

Issue Raised – Under Armour is exiting the 15 year sponsorship deal with UCLA with a debt of $ 200
million. Under Armour attempted to back out less than years into the deal. Under Armour claimed that
UCLA baseball had completed fewer than 50% of its games last season and the school has failed to take
reasonably appropriate actions after the arrest and incident of men’s soccer coach Jorge Salcedo. Under
Armour said the main reason was COVID-19 pandemic that has halted college sports since March. UCLA
claimed that they has met the terms of the agreement, which does not require that games in any sport be
played on particular schedule. UCLA also claimed that Under Armour misled the school about its
struggling finances before signing of the agreement. UCLA states that Under Armour has not supplied all
of the Bruins gear for the year 2020-21 school year. They failed to provide an on-site company
representative and failed to be in compliance with its retail store obligation.

Rule of Law –

US Act - Breach Of Contract Under section 6502 of U.S code.

Indian Act – Breach of Contract by Under Armour Under Section 39 of The Indian Contract Act 1872.

Analysis

UCLA filled case against Under Armour for breaching the contract signed in year 2016. UCLA also
inform in law suit that Under Armour had not paid the payment from April as they are informing that
there is shortage of cash flow. Under Armour defending themselves put allegations on UCLA that UCLA
baseball team had completed less than 50% of its game last season and they fail to take strict actions on
Operation Varsity Blues. UCLA rejected all the claims saying that they had fulfilled all the terms of the
contract. They further explained that there is no such conditions that require game should be played on
particular schedule. UCLA also alleged that Under Armour misled school about its struggling finances
during the time of contract. They failed to supply Bruins gear for the 2020-21 and provide on-site
company representative and failed to be in compliance with its retail store obligations. UCLA stated that
Under Armour is opportunistically using global pandemic to try to walk away from the binding
agreement. Under Armour defend themselves with a statement that we are confident in our position and
will defend it vigorously.

CONCLUSION

It seems that Under Armour fails to complete the obligations they might be in trouble if the claims of
UCLA proved right. Under Armour can be penalized for not completing obligation of contract and getting
contract by using false tactics like showing good growth and revenue.