Re: Interplay Between Arbitration Agreements Under The Arbitration And Conciliation Act 1996 And The Indian Stamp Act 1899 | 2023 INSC 1066

Arbitration And Conciliation Act 1996 ; Section 8,11 – Indian Stamp Act, 1899; Section 35 – N N Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. (2023) 7 SCC 1 Overruled -Agreements which are not stamped or are inadequately stamped are inadmissible in evidence under Section 35 of the Stamp Act. Such agreements are not rendered void or void ab initio or unenforceable -Non-stamping or inadequate stamping is a curable defect; -An objection as to stamping does not fall for determination under- Sections 8 or 11 of the Arbitration Act. The concerned court must examine whether the arbitration agreement prima facie exists;- Any objections in relation to the stamping of the agreement fall within the ambit of the arbitral tribunal. (Para 224)

Supreme Court Rules 2013; Order VI Rule 2 – If a Bench in the course of hearing any cause, appeal or “other proceedings” considers that the matter be dealt with by a larger bench, it shall refer the matter to the Chief Justice, who shall thereupon constitute such a Bench for the hearing of the matter- the term “other proceeding” under Order VI Rule 2 of the Supreme Court Rules, 2013 will also include review and curative petitions – Referred to Kantaru Rajeevaru v. Indian Young Lawyers Association (2020) 9 SCC 121. (Para 26)

Difference between voidness and admissibility– When an agreement is void, we are speaking of its enforceability in a court of law. When it is inadmissible, we are referring to whether the court may consider or rely upon it while adjudicating the case. This is the essence of the difference between voidness and admissibility. (Para 46)

Indian Stamp Act, 1899 – The effect of not paying duty or paying an inadequate amount renders an instrument inadmissible and not void. Non-stamping or improper stamping does not result in the instrument becoming invalid. The Stamp Act does not render such an instrument void. The non-payment of stamp duty is accurately characterised as a curable defect. The Stamp Act itself provides for the manner in which the defect may be cured and sets out a detailed procedure for it. It bears mentioning that there is no procedure by which a void agreement can be “cured”. (Para 48)

Arbitration and Conciliation Act, 1996 ; Section 5 – General rule of judicial non-interference. Therefore, every provision of the Arbitration Act ought to be construed in view of Section 5 to give true effect to the legislative intention of minimal judicial intervention. (Para 82)

Arbitration and Conciliation Act, 1996 ; Section 2(b),7 – Essential elements of an arbitration agreement as follows: a. There must be a present or future difference in connection with some contemplated affair; b. There must be the intention of the parties to settle such disputes by a private tribunal; c. The parties must agree in writing to be bound by the decision of such tribunal; and d. The parties must be ad idem. (Para 88)

Interpretation of Statutes- Harmonious construction of statutes: a. It is the duty of the courts to avoid a head-on clash between two sections of the Act and to construe the provisions which appear to be in conflict with each other in such a manner as to harmonise them; b. The provisions of one section of a statute cannot be used to defeat the other provisions unless the court, in spite of its efforts, finds it impossible to effect reconciliation between them; c. When there are two conflicting provisions in an Act, which cannot be reconciled with each other, they should be so interpreted that, if possible, effect should be given to both. This is the essence of the rule of harmonious construction; d. The courts have also to keep in mind that an interpretation which reduces one of the provisions to a “dead letter” or “useless lumber” is not harmonious construction; and e. To harmonize is not to destroy any statutory provision or to render it otiose – Referred to Sultana Begum v. Prem Chand Jain (Para 160)

Interpretation of Statutes-  Generalia specialibus non derogant – A general law must give way to a special law -The principal subject-matter as well as the particular perspective or focus illuminate the path to ascertain whether a law is a general law or a special law – The court should examine whether its jurisdiction has been ousted in terms of the procedure prescribed by a special law.(Para 167-169)

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