The Supreme Court has announced that it will soon hear a curative petition to determine enforceability of arbitration agreements that are unstamped or insufficiently stamped. Chief Justice of India DY Chandrachud, presiding over a 5-judge bench, made this announcement, stating that the hearing may take place as early as next week. The court has also extended an invitation to specialized lawyers in arbitration law to provide assistance in the matter, irrespective of whether they are representing any of the parties involved in the case.

The bench, comprising Justice Hrishikesh Roy, Justice PS Narasimha, Justice Pankaj Mithal, and Justice Manoj Misra, was originally convened to address another issue related to the Arbitration and Conciliation Act of 1996 - whether a person ineligible to be appointed as an arbitrator can appoint one. During the proceedings, Chief Justice Chandrachud brought up the curative petition concerning the stamping of arbitration agreements.

The curative petition in question stems from a 2020 judgment by a 3-judge bench, which held that an arbitration clause in an agreement that should be properly stamped but is not sufficiently stamped cannot be enforced by the court. This decision has sparked a legal debate regarding the enforceability of such agreements.

Earlier this year, a 5-judge bench, including Chief Justice Chandrachud, had agreed to hear the curative petition in open court, thus indicating the gravity of the matter. In April, a Constitution Bench had answered a reference on the issue by a 3:2 majority. The majority opinion was that an instrument not duly stamped cannot be considered a legally enforceable contract, according to Section 2(h) of the Contract Act.

Justice Rastogi and Justice Roy, however, held the view that non-stamping or insufficient stamping of the substantive instrument would not render the arbitration agreement unenforceable, emphasizing that stamp deficiency was a curable defect.

Additionally, the Supreme Court has deferred the hearing on whether an ineligible person can appoint an arbitrator, citing the ongoing review of arbitration law in India by an expert committee. Attorney General for India R Venkataramani confirmed that the review process was still in progress and requested further deferment. The Chief Justice accepted this request, indicating that the matter could be revisited in mid-November when there may be more clarity on the law.

The expert committee, led by Dr. T.K. Vishwanathan, a former Secretary of the Department of Legal Affairs, was established by the Ministry of Law and Justice in June 2023.