Vipan Kumar, PhD

June 1st, 2026

[A] Cover Story

[A.1] Who decides the nationality of a company?

There are different perspectives and theories to decide the nationality of a company and no single solution to this problem. Hence, in this cover story, I am only providing an outline to different perspectives rather than giving a single solution.

The nationality of a company is relevant and is determined under domestic laws, private international law and international investment law. Thus, the tests are often adopted and prescribed under the relevant provision of domestic law or an international treaty.

Historically, legal systems have used the place of incorporation or the location of its real seat as tests to determine the nationality. The real seat test was invoked if fraud was suspected, overriding the place of incorporation. However, the legal systems have gradually moved ahead from the conservative approach and started adopting different tests like ‘data seat’, ‘government influence’, and ’effective management’.

The states, while incorporating a domestic law or while entering into an international treaty, identify an instrumentality of the state, a court or a tribunal as the decision-maker to decide the nationality of the company. There is no dearth of academic literature and court decisions on this topic, each one of them adding to the discussion rather than giving a one-point solution.

[B] Q & A

[B.1] What is the difference between an infrastructure investment trust and a special purpose vehicle in infrastructure financing?

Both InvIT and SPV are critical components in infrastructure financing, but they serve entirely different functions. An InvIT is a pooling vehicle (like a mutual fund) that collects money from the unit holders. Its primary purpose is capital aggregation and providing returns to the unit holders.

On the other hand, an SPV is the operational entity that actually holds and executes a specific infrastructure project. It is set up as a private limited company or a limited liability partnership created for a single well-defined purpose, that is, to execute and manage a single infrastructure project, e.g., a specific toll highway.

The InvIT and SPV are not mutually exclusive and operate on a holding-subsidiary dynamic. The structure can be explained as follows:

  • The investors buy units in InvIT as unitholders.
  • The InvIT uses that money to buy shares in various SPVs.
  • The SPVs execute the concession agreements, collect the revenue (e.g., tolls/tariffs) and pass the profit back up to InvIT as dividends.
  • The InvIT then distributes this cash flow to its investors.

Because SPV is a separate legal entity, it rings fences the risk of a specific project. If one SPV under an InvIT faces any regulatory hurdle, bankruptcy or termination of a concession agreement, the legal and financial liabilities are generally restricted to that SPV. On 15 May 2026, SEBI issued a circular to outline the conditions under which an SPV can retain its status after its infrastructure concession agreement ends or is terminated. The circular is available on SEBI’s website.

[C] Case Law

[C.1] Performing public-like functions does not automatically subject an autonomous entity to RTI mandates

An RTI applicant and appellant recently sought operational details regarding the Board of Control for Cricket in India via the Ministry of Youth Affairs and Sports. The core legal issue was whether the BCCI, despite its massive public influence and monopoly over Indian cricket, qualifies as a ‘public authority’ under Section 2(h) of the RTI Act.

The Central Information Commission (CIC) [Geeta Rani v. CPIO, Ministry of Youth Affairs & Sports, Delhi (April 28th, 2026)] definitively ruled that it does not qualify as a public authority under RTI. The CIC clarified that BCCI is a privately registered society, not a statutory body, and operates entirely without deep and pervasive government control or substantial state funding.

Thus, merely performing public-like functions does not automatically subject an autonomous entity to RTI transparency mandates.

[C.2] Limited restoration of company’s name ordered to facilitate pending assessment

In Department of Income Tax v. Gurukripa Essence Real Estate (P) Ltd (May 8th, 2026), the Registrar of Companies struck off a real estate company while the Income Tax Department was pursuing substantial reassessment demands. When an appellate authority under the Income Tax Act later remanded the tax matter back to the assessing officer for a fresh determination, the company argued its administrative dissolution extinguished its obligations.

Rejecting this defence, the National Company Law Tribunal (NCLT) ordered the restoration of the company’s name to the register. The Tribunal clarified that administrative striking off does not erase statutory liabilities; a company must legally exist to participate in remanded proceedings, file submissions, and defend itself.

For corporate practitioners and investors, this ruling underscores that regulatory closure does not equal absolute legal immunity. Courts will readily reinstate a defunct entity’s legal existence to protect public revenue and enforce tax compliance, though strictly for concluding the legal dispute rather than reviving commercial operations.