Stamp Duty And Its Perilous Effect On Arbitration Cases

Much has already been written about the effect of non-payment or insufficient payment of stamp duty on substantive agreements containing an arbitration clause, and whether such default hinders enforcement of the arbitration agreement.

At the outset, it must be clarified that the purpose of this article is not to consider whether interim relief under Sections 9 or 17 of the Arbitration and Conciliation Act, 1996 ("Act") may be granted where unstamped/inadequately stamped instruments contain arbitration agreements, given that this is no longer subject to debate. The decision of the full bench of the Bombay High Court in Gautam Landscapes Pvt. Ltd., Mumbai v. Shailesh S. Shah 2019 (3) Mh.L.J., and the Supreme Court's recent decision in N.N. Global Mercantile Pvt. Ltd v. Indo Unique Flame Ltd. & Ors. 2021 SCC OnLine SC 13 ("NN Global"), clarify that interim relief may be obtained even when the substantive agreement is unstamped/insufficiently stamped.