Arbitration Clause In Unstamped Agreement

Arbitration Clause In Unstamped Agreement

In the judgment at first instance, the full bank of the Hon`ble High Court of Bombay stated, in answering the first question, that waiting for the decision on stamp duty before the exemption was granted would nullify the scheme of the 1996 Act. It was found that the arbitration agreement was distinct and distinct from the document in which it was contained and that it did not need to be stamped, and it was found, in the negation of the second question, that the Tribunal`s powers to respond to a request under article 11 are now limited to the extent of the existence of an agreement in the light of the new article 11, paragraph 6A , so that the General Court does not need to determine the need to establish the existence of an agreement in the light of the newly introduced Article 11(6A). The issue of payment of stamp duty could be dealt with by the arbitrator so appointed. Therefore, an application within the meaning of Article 11 could be processed, although the main agreement is insufficiently affixed. Stamp duty is a kind of mandatory tax under Indian law that must be paid for any document or instrument relating to rights or obligations. It is necessary to be paid to the government or jurisdictional authority in which the document or act is performed. The calculation of stamp duty depends on the nature of the document and varies from state to state. It shall be subject to the provisions of one or both of the central stamp legislation and of national legislation. It clearly indicates that an unsamped document or instrument cannot be considered or responded to as evidence. The Supreme Court`s decision in SMS Tea Estates was distinguished by the Supreme Court with respect to the amendment of Section 11. He considered that the scope and scope of articles 9 and 11 were different and that the consequences were different, i.e. section 11 dealt with the appointment of an arbitrator, while article 9 related to the Power of the Tribunal to grant an action for interim measures. The Full Bench considered that the consequence that, in an article 9 application, which is pending arbitration, does not grant an application for interim measures, it may be provisionally drastic and would give the parties severe harshness, in particular because the grant of an appropriate stamp duty could itself give rise to a dispute and that, until that date, the party could be prejudiced and would be deprived of any remedy concerning the search for protection under Article 9.

Full Bench considered that the non-payment of stamp duty was not an incurable shortcoming and that the Stamp Act was only a physical measure intended to provide the State with revenue from certain categories of instruments. Full Bench relied on the firm Ashok Traders decision, which held that the arbitration clause in a contract was a separate agreement as such and that the court had no effect on the contract, whereas the decision on a section 9 claim has no effect on the contract. The Full Bench also considered that the issue of the inadequacy of stamp duty, if any, could be raised by the other party at the stage when an instrument containing an arbitration agreement is filed in evidence before the arbitral tribunal. Gautam Landscapes Judgement`s approach would allow arbitration to be launched while ensuring that stamp duty is not circumvented. In fact, this was the approach of several Delhi Supreme Court cases, which were rendered by the Garware decision. [8] According to the Supreme Court, the Fees Act applied to the agreement as a whole and it was not possible to branch out the arbitration clause contained in the treaty in order to give it independent status. The Supreme Court invoked section 2(h) of the Indian Contract Act of 1872 to find that an unstamped agreement was not a contract and was therefore not applicable. . . .