STAMPING FOR APPROVAL: CRITIQUING THE LEGAL CONUNDRUM OF UNSTAMPED ARBITRATION CLAUSES IN INDIA
—Ishaan Saraswat and Shourya Mitra
The full chapter may be found by clicking on the PDF link to the left.
On April 25th, 2023, the Constitutional Bench of the Supreme Court of India rendered a pivotal decision on the issue of unstamped arbitration agreements. While resolving a long-standing legal ambiguity, the decision has ignited considerable controversy due to its perceived adverse implications for the Indian arbitration landscape. This paper critically examines the ramifications of the Court’s ruling, particularly its expansion beyond a mere “prima facie” assessment during arbitrator appointment. Our study delves into the resultant procedural complexities and delays introduced by the Court’s intervention, especially concerning the re-examination of stamp duty by the arbitral tribunal, extending the application process and impeding parties’ substantive rights. We argue for a streamlined process, proposing either the court or the arbitral tribunal to conclusively determine stamp duty, eliminating the need for further re-evaluation. Additionally, the ruling’s use of the term “void” establishes a new dimension in contract and arbitration law, potentially reshaping the legal landscape significantly. Ultimately, the authors scrutinise the impacts of the Court’s decision, which was aimed to address concerns related to unstamped arbitration agreements, but has inadvertently introduced complexities that obstruct the smooth functioning of arbitration process.