On January 18, the Supreme Court's constitutional bench, led by Justice K.M. Joseph, Justice Ajay Rastogi, Justice Aniruddha Bose, Justice Hrishikesh Roy, and Justice C.T. Ravikumar, continued hearing submissions made by Amicus Curiae, Senior Advocate, Mr. Gourab Banerji, in a 3-Judge regard which addressed the issue of determining whether the arbitration clause in a contract, which is needed to be registered Because there is no contesting respondent in the matter, a 5-judge Bench assigned an Amicus to assist it. The issue framed is as under -

"Whether the statutory bar contained in Section 35 of the Indian Stamp Act, 1899 applicable to instruments chargeable to Stamp Duty under Section 3 read with the Schedule to the Act, would also render the arbitration agreement contained in such an instrument, which is not chargeable to payment of stamp duty, as being non-existent, un- enforceable, or invalid, pending payment of stamp duty on the substantive contract / instrument ? "

The Amicus essentially argued that the Court should limit its jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996 to determining the existence of an arbitration agreement. He argued that the scope of S. 16, which deals with an arbitral tribunal's competence to rule on its jurisdiction, was broad enough to allow the arbitrator to consider the stamping of the document. He pointed out that, in addition to jurisdiction, the arbitrator is expected to rule on objections to the 'existence and validity of the arbitration agreement' under Section 16, whereas under Section 11(6A), which deals with court-appointed arbitrators, the consideration by the arbitrator is mandatory ‘confined to the examination of the existence of an arbitration agreement’.

The Amicus argued that the aforementioned issue might not be relevant because it would be a consumer dispute. He emphasised that the two issues on S.11 that the Constitution Bench should conceptually decide are -

1.    What does S.11(6) cover?
2.    What exactly is the nature of this intervention?

On the stamping issue, the Amicus argued –

“A non-stamped document at the highest may be incapable of being performed. Even that may not be correct, because it is a curable defect. Certainly, it is not null and void.”

Taking the Bench through the relevant provisions of the Indian Stamp Act, the Amicus argued that the statutory bar in Section 35 of the Stamp Act (Instruments not duly stamped inadmissible in evidence) would be triggered only if the document is found to be not duly stamped. Stamping should be investigated in the same way.

Case Status: M/s. N.N. Global Mercantile Pvt. Ltd. v. M/s. Indo Unique Flame Ltd. And Ors. 
Citation: CA No. 3802-03/2020

Link: https://main.sci.gov.in/supremecourt/2020/23926/23926_2020_3_501_41107_Order_18-Jan-2023.pdf