Senior Advocate Gourab Banerji was Amicus Curiae in the matter. He submitted that in an application under Section 11 of the Arbitration Act, the role of the courts is limited to examining the existence of the agreement. The issue of stamp duty is to be decided by arbitrators who have powers under Section 35 of the Stamp Act to impound if needed, he added.
The reference order erroneously holds that an arbitration agreement is not liable to stamp duty, he contended. Further, Section 16, which deals with the competence of arbitral tribunals to rule on their jurisdictions, is wide enough to allow arbitrators to consider the aspect of the agreement’s stamping.
If it is found that there was no arbitration agreement, courts do not proceed on appointing arbitrators, he pointed out.
Banerji argued that the statutory bar, as provided under Section 35 of the Stamp Act, is only triggered when there is a finding that a document is not duly stamped. In this scenario, he added that unstamped agreements are valid and their admissibility is to be left to the adjudicator.
Making the aspect of stamping central to the determination of whether an arbitrator can be appointed would defeat the object of arbitration by causing delays, he stressed.
Counsel for the petitioners argued that stamping can be determined at the threshold, pointing out that an instrument would exist in law only when the same is enforceable.
Any statutory bar under the Stamp Act applies both on courts and arbitrators, it was submitted.
Source: Barandbench
