Non-Stamped Arbitration Agreements Inadmissible But Not Void: Supreme Court

In a crucial decision, the Supreme Court of India in December last year held that unstamped arbitration agreements are inadmissible in evidence yet not rendered void ab initio because the same is a curable defect.

The seven-judge bench led by Chief Justice of India DY Chandrachud overruled the decision by a five-judge bench in NN Global Merchantile Private Limited vs Indo Unique Flame Limited (to be referred to as NN Global 2) and SMS Tea Estates Private Limited versus Chandmari Tea Co. Private Limited. Two paragraphs of the decision in Garwale Wall Ropes Limited versus Coastal Marine Construction & ENGG. Limited were also overruled.

Chronology

In NN Global Mercantile Limited vs Info Unique Flame Limited (herein after referred to as NN Global 1), a bench of three judges of the Supreme Court heard a special leave petition to determine the enforceability of an arbitration agreement contained in an unstamped work order.