TWO MONTHS AGO, a Division Bench of the Delhi High Court in JLT Energy 9 SAS v. Hindustan Clean Energy Limited & Ors. (2026), affirmed the sanctity of long stop dates in Mergers & Acquisitions (‘M&A’) agreements as ‘self-collapsing’ mechanisms, such that if conditions precedent in a share/security purchase agreement are not met or waived by the other party, the agreement stands terminated. The Division Bench confirmed the decision of the Single Judge in O.M.P.(I) (COMM.) 464/2025.
While these judgments confirm the validity of another typical M&A mechanism under Indian law, it adds to a worrying trend of Indian courts expounding on private and contract law concepts through arbitration related proceedings only, and not through civil trials and appeals.
What was the case about?
JLT Energy 9 SAS (‘JLT’), a French entity, executed two interlinked Security Purchase Agreements dated December 31, 2024 (‘SPA(s)’) with Hindustan Cleanenergy Limited and Peridot Power Ventures Pvt. Ltd. for the acquisition of solar power project companies in Tamil Nadu and Bihar. The closing of the Tamil Nadu SPA was a contractual condition precedent (‘CP’) to closing of the Bihar SPA. The Tamil Nadu SPA required conversion of project land to non-agricultural use by the Closing Long Stop Date (‘CLSD’) of April 30, 2025. But this conversion was never obtained, even after an extension of the CLSD to May 31, 2025. Clause 5.6 of the SPA provided that non-fulfilment of the CPs by the CLSD would result in automatic termination.
JLT contended that subsequent correspondence and a draft amendment had varied this position by permitting closing against a holdback in escrow and relegating the conversion of the land to a condition subsequent (‘CS’). It also argued that the sellers' own default in failing to procure conversion should not be allowed to benefit them.
