Arbitration Agreement Contained In An Unstamped Document Must Be Impounded: Supreme Court Clarifies The Law

The Supreme Court by a significant judgment on 10 April 2019, clarified that the power of the court to impound an unstamped document containing an arbitration clause, at the stage of appointment of an arbitrator, remains unchanged with the introduction of Section 11 (6A) of the Arbitration and Conciliation Act ("Act").

The Court was hearing an appeal by Garware Wall Ropes Limited from an order passed by the Bombay High Court appointing an arbitrator to adjudicate the disputes that had arisen between the parties with regard to termination of a works sub-contract. The issue before the court was whether with the introduction of Section 11 (6A) of the Act, the court was stripped of its power to impound an unstamped document at the Section 11 stage and could now only be impounded by an arbitrator appointed by a section 11 petition.