From Signing To Closing: Specific Performance In M&A Transactions
- IJLLR Journal
- May 30
- 1 min read
Arghya Das, Lloyd School of Law, Greater Noida
ABSTRACT
Mergers and acquisitions are fundamentally built upon contractual certainty. Modern acquisition transactions involve complex negotiations, extensive due diligence exercises, carefully structured risk allocation mechanisms, and detailed contractual documentation. Despite this sophistication, disputes frequently arise between signing and closing stages of a transaction. Buyers often attempts to walk away from deals citing adverse business developments, regulatory failures, or valuation concerns, while sellers also refuse to consummate transactions after market conditions change in their favour.
In such situations, the most commercially significant legal question becomes whether courts or arbitral tribunals has the authority to compel parties to complete the transaction instead of merely awarding monetary damages. This remedy, known as specific performance, has acquired renewed significance in India following the enactment of the Specific Relief (Amendment) Act, 2018.
The 2018 amendment fundamentally altered India’s contractual enforcement landscape by transforming specific performance from an exceptional discretionary remedy into a general rule for commercial contracts. This shift has substantial implications for M&A transactions, where damages are often inadequate because things like strategic acquisitions, control rights, confidential synergies, and market positioning cannot easily be quantified in monetary terms.
This article examines the evolving concept surrounding specific performance in Indian M&A agreements, the impact of the 2018 amendment, the role of Material Adverse Change (MAC) clauses, the interplay with arbitration, and the practical implications for transactional drafting and deal structuring.
