An Indian Perspective on Special Purpose Acquisition Companies, GLA-TR-001
opportunity for a SPAC to identify a target company and further commence operations does not arise.
Concerns under Private International Law Private International law is that portion of international law that comes into question when courts in one country are faced with a foreign element or claim that would lead to conflict between the private entities and citizens across various countries and is often referred to as “conflict of laws” in the common law countries. Therefore, the domestic courts of a country will have to deal with three questions when any private international law issue arises; firstly, which country would have the jurisdiction in dealing with a dispute and the conditions which would allow the country to entertain the same?; secondly, which law would be applicable?; and thirdly, how would the foreign judgement be made enforceable? 46 At this juncture it is important to examine how pertinent these questions of private international law would be in case of SPACs and how it would pose several jurisdictional issues in case any dispute arises. There are possibilities of several contractual disputes that can arise in the course of the SPAC lifecycle. The shareholders of the SPAC can sue the SPAC executives in failing to perform their fiduciary duty in and in conducting successful negotiations with the target company. Further they can also claim that the SPAC executives were grossly negligent in conducting and gathering any relevant information and meetings to effectively constitute a SPAC merger. However, this is an easy question to answer when the SPAC has initiated a merger with the company in the same country the SPAC is present. The problem would however arise if the SPAC merger were initiated with a target company with an overseas SPAC. Would the shareholders be liable to claim damages from the SPAC directors on the ground that they consciously chose to not conduct successful negotiations with the target company and buy more time thereby risking the shareholder’s investment amount in the
Hugh & Hazel Darling Law Library, ‘Private International Law’ (UCLA School of Law, 2021) <https://libguides.law.ucla.edu/privateinternational> accessed 07 October 2021. 46
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