The Supreme Court Decision - Unstamped Arbitration Agreement Cannot Be Acted Upon

INTRODUCTION

The Supreme Court of India (Supreme Court) in its recent judgment, Garware Walls Ropes Ltd. v. Coastal Marine Constructions & Engineering Ltd. in Civil Appeal no. 3631/ 2019, arising out of SLP(C) 9213/ 2018, pronounced on April 10, 2019, overruled a Bombay High Court judgment, Coastal Marine Constructions & Engineering Ltd. v. Garware Walls Ropes Ltd., in Arbitration Petition No.24/ 2017 (HC Judgment), and held that an arbitration clause in an agreement, which is not stamped as per law, cannot be given effect if and until the agreement is duly stamped, i.e., full stamp duty in respect of such agreement as provided by law has been paid. The Supreme Court further held that when a court is called upon to decide on an application for appointment of arbitrator under Section 11 of the (Indian) Arbitration and Conciliation Act, 1996 (Arbitration Act) on the basis of an arbitration clause in an agreement which is unstamped or deficiently stamped, the court