The Hon’ble Supreme Court of India (“Court”) in the recent decision by the five-judge Bench in N.N. Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd. (Judgment dated 25 April 2023), which is a reference from the decision of three judge Bench delivered by the Court on 1 January 2021 [(2021) 4 SCC 379], clarified the stance on the validity / enforceability of the arbitration agreement or arbitration clause contained in an agreement / contract, which is not stamped in accordance with the Indian Stamp Act, 1899 (“Stamp Act”). The Court finally settled the conundrum and held that the arbitration or the appointment of arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) cannot be invoked if the arbitration agreement or clause is contained in an unstamped or insufficiently stamped agreement or contract.
Link: Arbitration agreement, which is part of an unstamped contract, has no existence | Lakshmikumaran & Sridharan Attorneys (lakshmisri.com)
Audio Source: An article published on the LKS website in May 2023.
Authors: Manasa Tantravahi Aman Gupta
Expert: Dhruv Matta