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ARTICLE · 25 SEPTEMBER 2023

Impact Of An Unstamped Arbitration Agreement

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On April 25, 2023, a constitution bench consisting of five judges of the Supreme Court issued a split verdict in the case of N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited.

IndiaLitigation, Mediation & Arbitration
Ankit Mishra
Ankit Mishra
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1. Introduction

On April 25, 2023, a constitution bench consisting of five judges of the Supreme Court issued a split verdict in the case of N.N. Global Mercantile Private Limited v. Indo Unique Flame Limited1. The decision was passed by a 3:2 majority. The ruling clarified that an arbitration agreement as well as an instrument containing an arbitration agreement, if unstamped or insufficiently stamped and exigible to stamp duty under the Stamp Act ("Stamp Act") cannot be considered as legally enforceable contract under the meaning of Contract Act ("Contract Act"). As explained below, the SC position on the subject was unclear with several conflicting position and, as a consequence, the matter was referred to a larger bench.

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