Seven Judge Bench of SC Held That Unstamped or Inadequately Stamped Arbitration Agreement are Not Rendered Void or Void Ab Initio or Unenforceable

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Jan 23, 2024

Seven Judge Bench of SC Held That Unstamped or Inadequately Stamped Arbitration Agreement are Not Rendered Void or Void Ab Initio or Unenforceable

The SC in In re interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899^[1] held that arbitration agreements which are not stamped or are inadequately stamped are not rendered void ab initio or unenforceable, and the same is a curable defect.^[2] The SC observed that under Sections 8 and 11 of the Arbitration Act, a Court is only required to undertake a prima facie standard of review.^[3] Therefore, an objection as to stamping does not fall for determination of the Courts under Sections 8 or 11 of the Arbitration Act, but falls within the ambit of the Arbitral Tribunal.^[4] The SC overruled the decisions in N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited and Ors.^[5] and SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd.^[6]

[1] In re interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, Curative Petition (C) No. 44 of 2023.

[2] Paragraph 48, In re interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, Curative Petition (C) No. 44 of 2023.

[3] Paragraph 195, In re interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, Curative Petition (C) No. 44 of 2023.

[4] Paragraph 195, In re interplay between Arbitration Agreements under the Arbitration and Conciliation Act 1996 and the Indian Stamp Act 1899, Curative Petition (C) No. 44 of 2023.

[5] N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited and Ors., (2023) 7 SCC 1.

[6] SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd., (2011) 14 SCC 66.

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