Arbitral award need not be written on stamp paper by the Arbitrator

This has reference to the observations of hon™ble Single Judge bench of Delhi HC in Eider PW1 Paging Limited and Eider PW1 Communications Ltd. Vs. Union of India and Ors. {2010 (115) DRJ 263- Delhi HC}, which has been referred to a larger bench of Delhi HC.

However, with highest respect to hon™ble Single Judge bench of Delhi HC, it is most humbly submitted that I am unable to agree with the observations made therein for the following reasons.

(1).       It has been observed in para 10. ¦¦¦¦¦The aspect of whether the provision of Section 33 is directory or mandatory WAS NOT CONSIDERED BY THE SUPREME COURT IN THE CASE OF M. ANASUYA DEVI’S CASE (supra), and in fact, SECTION 33 OF THE STAMP ACT HAS NOT EVEN BEEN ADVERTED TO in the said judgment. The Supreme Court in the case of N. Bhargavan Pillai Vs. State of Kerala 2004 (13) SCC 217 has laid down that when any judgment, even of a Supreme Court, does not advert to a direct provision of law then, the JUDGMENT IS TO BE TREATED AS HAVING BEEN RENDERED PER INCURIAM. (capitals mine)

(2).       However, on the contrary, Hon™ble Supreme Court in M. Anasuya Devi And Anr. vs M. Manik Reddy And Ors. {2003 (3) ARBLR 404 SC, SC Suppl 2004 (1) CHN 167; Decided on 16/10/2003} observed and held as follows (in para 1, 4 and 6)

1. The respondents herein, who appears to have not satisfied with the Award, filed two petitions under Section 34(1) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) for setting aside the Award, inter alia, on the following grounds:¦¦¦¦¦..(6) That the AWARD IS INADMISSIBLE AND UNENFORCEABLE IN LAW FOR WANT OF PROPER STAMP DUTY AND REGISTRATION.

4. ¦¦¦¦The question as to WHETHER THE AWARD IS REQUIRED TO BE STAMPED AND REGISTERED, would be relevant only WHEN THE PARTIES WOULD FILE THE AWARD FOR ITS ENFORCEMENT under Section 36 of the Act. It is at this stage the parties can raise objections regarding its admissibility on account of non-registration and non-stamping under Section 17 of the Registration Act. In that view of the matter the EXERCISE UNDERTAKEN TO DECIDE THE SAID ISSUE BY THE CIVIL COURT AS ALSO BY THE HIGH COURT WAS ENTIRELY AN EXERCISE IN FUTILITY¦¦¦…

6. The appeals are, accordingly, allowed. Since the High Court has not dealt with other objections raised under Section 34 of the Act, we remit the matter to the High Court to decide the same. WE MAKE IT CLEAR THAT THE ISSUE WITH REGARD TO THE STAMPING AND REGISTRATION OF THE AWARD or documentation thereof, it would be open to the parties to raise the same before the Court AT THE STAGE OF PROCEEDING UNDER SECTION 36 OF THE ACT¦¦¦.(capitals mine)

 

COMMENTS- In view of aforesaid observations, it is wholly irrelevant to state that Supreme Court, did not advert to a direct provision of law, and therefore, the JUDGMENT can not at all BE TREATED AS HAVING BEEN RENDERED PER INCURIAM.

(3) Arbitration and Conciliation Act, 1996- Section 36. Enforcement.”

 

WHERE THE TIME FOR MAKING AN APPLICATION TO SET ASIDE the arbitral award under section 34 HAS EXPIRED, or such application having been made, it has been REFUSED, the AWARD SHALL BE ENFORCED under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner AS IF IT WERE A DECREE of the Court.

COMMENTS: (i) It is evident that as provided in 36 of the Act, an ENFORCABLE AWARD is that award, which has been finally upheld against the challenge u/s 34 of the Act, and not prior to that at all. Consequently, as per ratio of the said SC judgment, the requirement of law regarding STAMPING AND REGISTRATION is applicable to the ENFORCABLE AWARD as provided in 36 of the Act and not prior to that at all.

(ii) In view of said SC judgment, by necessary implication, duly signed Arbitral Award, even being unstamped and unregistered, is valid in all respects to face the challenge u/s 34 of the Act. The stamp duty and registration fee are attracted to be paid just before WHEN THE PARTIES WOULD FILE THE ENFORCABLE AWARD in the court executing the decree u/s 47 of the Code of Civil Procedure.

Note: the views expressed are my personal and a view point only.

 

Author:

Narendra Sharma, Consultant (Legal)

E-mail: nkdewas@yahoo.co.in