Insufficient Stamping Of Agreement Can Only Be Challenged Under Stamp Act, Cannot Be Ground To Set Aside Arbitral Award: Delhi HC
A Delhi High Court Bench of Justice Navin Chawla has observed the insufficient stamping of an agreement can only be challenged under the Stamp Act and cannot be a ground to set aside the arbitral award.
The Court held that it does not have the powers vested under Section 61 of the Indian Stamp Act, 1899, since, as per Section 34 of the Arbitration and Conciliation Act, 1996, the Court does not act as a Court of appeal against the arbitral award.
In that context, the Court observed that "even assuming that the learned Sole Arbitrator made a mistake in the interpretation of the Maharashtra Stamp Act, in my view, it cannot be a ground to interfere with the Arbitral Award in the exercise of the limited jurisdiction under Section 34 of the Act."
Senior Counsel Sandeep Sethi and Senior Counsel Malvika Trivedi, among others, appeared for the petitioner. Senior Counsel Ashok Kumar Singh, among others, appeared for the respondent.
In this case, the petitioner filed a petition under Section 34 of the Arbitration and Conciliation Act to challenge an award that ordered them to pay Rs. 5 crores along with interest to the respondent. The petitioner's argument was that the agreement, which included an arbitration clause, should have been impounded due to incorrect stamping. Additionally, they claim that the respondent failed to provide any evidence of loss, and therefore, should not be entitled to receive any amount.
On hearing the parties and analyzing the pertinent statute, the Court observed that "It is settled law that the Court exercising jurisdiction under Section 34 of the Act does not sit as a Court of Appeal against the findings of the learned Arbitral Tribunal. Its jurisdiction under Section 34 of the Act is rather limited and even a contravention of a statute, that is not linked to a public policy or public interest, cannot be a ground for setting aside an Arbitral Award under Section 34 of the Act."
Further, the Court took the considered view that such an instrument should not have been admitted in evidence without the payment of duty and penalty under Section 35 of the Indian Stamp Act.
Subsequently, the Court dismissed the petition on finding no merit. No orders were passed as to costs.
Cause Title: ARG Outlier Media Pvt. Ltd. v. HT Media Ltd.