UNSTAMPED ARBITRATION AGREEMENTS VALID IN LAW- HELD SUPREME COURT OF INDIA
CURABLE DEFECT UNDER? THE INDIAN STAMP ACT HELD BY SUPREME COURT IN NN GLOBAL MERCANTILE PRIVATE LIMITED V. INDO UNIQUE FLAME LIMITED
In a unanimous decision, a 7-judge Constitution Bench, headed by CJI Chandrachud, overruled its earlier decision that an arbitration agreement would ?invalid or void ab initio if the underlying contract was not stamped as per the? relevant Stamp Act, ruling that non-stamping or insufficient stamping does not render an agreement void but merely makes it inadmissible in evidence, and non-stamping or insufficient stamping of an agreement is a curable defect under? the Indian Stamp Act.
·?????? By reasserting the separability doctrine and the non-necessity of stamp duty for the validity of arbitration agreements, the Supreme Court effectively restored the Arbitration Act’s foundational intention.
·?????? Supreme Court clarified that unstamped or insufficiently stamped instruments, while initially inadmissible as evidence, do not render the arbitration agreement void or unenforceable.
·?????? This principle affirms the autonomy of the arbitration agreement from the main contract, consistent with the doctrine of separability in arbitration law.
·?????? The Supreme Court clarified that such instruments could be regularized by paying the requisite stamp duty, after which they could be admitted as evidence.
R V SECKAR
FCS 4075, 79047 19295 , [email protected]