Supreme Court of India

IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN STAMP ACT 1899versus.

Citation: 2023 INSC 1066
Decided: 13 December 2023
Disposal: Directions issued
Bench: D Y CHANDRACHUD

Holding

An unstamped or insufficiently stamped arbitration agreement is merely inadmissible as evidence under Section 35 of the Stamp Act, not void, and any stamping objection must be decided by the arbitral tribunal, with courts limited to a prima‑facie determination of existence under Section 11(6A).

Summary

The Supreme Court examined whether an arbitration agreement embedded in an unstamped or insufficiently stamped contract is void, unenforceable, or merely inadmissible under the Indian Stamp Act. It held that such agreements are only inadmissible as evidence under Section 35 of the Stamp Act and that non‑stamping is a curable defect; the defect does not render the arbitration agreement void. The Court clarified that under Section 11(6A) of the Arbitration and Conciliation Act, 1996, courts may only make a prima‑facie determination of the existence of an arbitration agreement, leaving any stamping objections to the arbitral tribunal under the doctrine of competence‑competence. Consequently, the earlier decisions in N N Global Mercantile Ltd. v. Indo Unique Flame Ltd., SMS Tea Estates v. Chandmari Tea Co., and Garware Wall Ropes Ltd. v. Coastal Marine Constructions were overruled. The curative petition was disposed, and the parties were directed to follow the clarified procedural hierarchy.

Issues considered

The effect of non‑stamping or insufficient stamping on the validity and enforceability of an arbitration agreement under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899.
Whether Section 11(6A) of the Arbitration Act limits judicial scrutiny to the existence of an arbitration agreement, excluding stamping issues.
The primacy of the Arbitration Act’s non‑obstante clause (Section 5) over the Stamp Act in arbitration matters.
The applicability of the doctrine of competence‑competence to objections concerning stamp duty.
Whether the precedents set in N N Global Mercantile Ltd. v. Indo Unique Flame Ltd., SMS Tea Estates v. Chandmari Tea Co., and Garware Wall Ropes Ltd. v. Coastal Marine Constructions should be overruled.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 11(6A), s. 16, s. 34, s. 5, s. 7, s. 8
Indian Contract Act, 1872s. 10, s. 2(g), s. 2(j)
Indian Stamp Act, 1899s. 31, s. 32, s. 33, s. 35, s. 38, s. 40, s. 42

Subjects

Arbitration agreementStamp dutyInadmissibilityCompetence‑competenceNon‑obstante clauseArbitration Act primacyCurable defectEvidentiary admissibility

Judgment

[2023] 15 S.C.R. 1081 : 2023 INSC 1066

CASE DETAILS

IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS
UNDER THE ARBITRATION AND CONCILIATION ACT 1996
AND THE INDIAN STAMP ACT 1899
(Curative Petition (C) No. 44 of 2023)
In
(Review Petition (C) No. 704 of 2021 )
In
(Civil Appeal No. 1599 of 2020)
DECEMBER 13, 2023
[DR. DHANANJAYA Y CHANDRACHUD, CJI,
SANJAY KISHAN KAUL, SANJIV KHANNA,
B R GAVAI, SURYA KANT, J B PARDIWALA AND
MANOJ MISRA, JJ.]
HEADNOTES
Issue for consideration: The issue at hand arose in the context of
three statutes; the Arbitration and Conciliation Act 1996, the Indian Stamp
Act, 1899, and the Indian Contract Act, 1872. The Stamp Act imposes duty
on “instruments”. Arbitration agreements are often embedded in underlying
instruments or substantive contracts. The primary issue for consideration was
whether such arbitration agreements would be non-existent, unenforceable,
or invalid if the underlying contract is not stamped. The challenge before
the Supreme Court was to harmonize the provisions of the Arbitration and
Conciliation Act, 1996 and the Stamp Act, 1899.
Arbitration and Conciliation Act 1996 – ss.8 and 11 – Arbitration
agreements embedded in underlying instruments or substantive
contracts – Whether such arbitration agreements would be non-existent,
unenforceable, or invalid if the underlying contract is not stamped –
Interplay between Arbitration Agreements under the Arbitration and
Conciliation Act, 1996 and the Indian Stamp Act, 1899 – Unstamped or
insuﬃciently stamped instruments – If admissible in evidence – Non-
stamping or inadequate stamping – If curable.
Ed. Note. Hon’ble Dr Dhananjaya Y Chandrachud, CJI pronounced the judgment on behalf
of himself, Hon’ble Mr Justice Sanjay Kishan Kaul, Hon’ble Mr Justice B R Gavai, Hon’ble
Mr Justice Surya Kant, Hon’ble Mr Justice J B Pardiwala and Hon’ble Mr Justice Manoj
Misra. Hon’ble Mr Justice Sanjiv Khanna pronounced a separate but concurring judgment.
1081
1082 SUPREME COURT REPORTS [2023] 15 S.C.R.

Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay
Kishan Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra,
JJ.): Agreements which are not stamped or are inadequately stamped are
inadmissible in evidence u/s.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 – The Stamp Act itself provides for
the manner in which the defect may be cured and sets out a detailed procedure
for it – An objection as to stamping does not fall for determination u/ss.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. [Paras
48 and 224] – Held (per Sanjiv Khanna, J.) (Concurring): Unstamped
or insuﬃciently stamped instruments inadmissible in evidence in terms of
s.35 of the Indian Stamp Act, 1899, are not rendered void and void ab initio
– An objection as to the under-stamping or non-stamping of the underlying
contract will not have any bearing when the prima facie test, “the existence of
arbitration agreement”, is applied by the courts while deciding applications
under Sections 8 or 11 of the Arbitration and Conciliation Act, 1996 – An
objection as to insuﬃcient stamping of the underlying agreement can be
examined and decided by the arbitral tribunal. [Para 1]
Evidence – Admissibility of documents – Diﬀerence between
inadmissibility and voidness – Contract Act, 1872 – s.2(g).
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay Kishan
Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra, JJ.):
The admissibility of an instrument in evidence is distinct from its validity
or enforceability in law – An agreement can be void without its nature as
a void agreement having an impact on whether it may be introduced in
evidence – Similarly, an agreement can be valid but inadmissible in evidence
– When an agreement is void, one is speaking of its enforceability in a court
of law – When it is inadmissible, one is 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. [Paras 44, 45 and 46]
Indian Stamp Act, 1899 – Purpose of.
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay Kishan
Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra, JJ.):
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1083
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899

The Stamp Act is a ﬁscal legislation which is intended to raise revenue for
the government – It is a mandatory statute. [Para 58]
Arbitration – Principle of arbitral autonomy – Doctrines /
Principles.
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay Kishan
Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra, JJ.):
The principle of arbitral autonomy is an integral element of the ever-evolving
domain of arbitration law – Arbitral autonomy means that the parties to
an arbitration agreement can exercise their contractual freedom to bestow
the arbitral tribunal with the authority to decide disputes that may arise
between them – The basis of arbitral autonomy is to give eﬀect to the true
intention of parties to distance themselves from the “risk of domestic judicial
parochialism. [Para 66]
Doctrines / Principles – Principle of judicial interference in
arbitration proceedings – Scope of non-obstante clause contained in
s.5 of the Arbitration and Conciliation Act 1996 – Legislative intention.
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay Kishan
Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra, JJ.):
The principle of judicial non-interference in arbitral proceedings serves
to proscribe judicial interference in arbitral proceedings, which would
undermine the objective of the parties in agreeing to arbitrate their disputes,
their desire for less formal and more ﬂexible procedures, and their desire
for neutral and expert arbitral procedures – The principle of judicial
non-interference in arbitral proceedings respects the autonomy of the
parties to determine the arbitral procedures – This principle has also been
incorporated in international instruments – s.5 of the Arbitration Act is of
aid in interpreting the extent of judicial interference under ss.8 and 11 of
the Arbitration Act – s.5 contains a general rule of judicial non-interference
– Therefore, every provision of the Arbitration Act ought to be construed in
view of s.5 to give true eﬀect to the legislative intention of minimal judicial
intervention. [Paras 69 and 82]
Arbitration and Conciliation Act, 1996 – Is a self-contained code
– Provisions of other statutes cannot interfere with the working of the
1084 SUPREME COURT REPORTS [2023] 15 S.C.R.

Arbitration Act, unless speciﬁed otherwise. [Para 85 in judgment of Dr.
D.Y. Chandrachud, CJI]
Arbitration – Arbitration agreement – Is the foundation of
arbitration as it records the consent of the parties to submit their
disputes to arbitration. [Para 88 in judgment of Dr. D.Y. Chandrachud,
CJI]
Arbitration – Arbitration agreement – Separability of the
arbitration agreement from the underlying contract in which it is
contained.
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay Kishan
Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra, JJ.):
An arbitration agreement is juridically independent from the underlying
contract in which it is contained – The concept of separability reﬂects the
presumptive intention of the parties to distinguish the underlying contract,
which captures the substantive rights and obligations of the parties, from
an arbitration agreement which provides a procedural framework to resolve
the disputes arising out of the underlying contract – This presumption has
various consequences in theory and practice, the most important being
that an arbitration agreement survives the invalidity or termination of the
underlying contract – The separability presumption gives eﬀect to the
doctrine of competence-competence. [Paras 90 and 112]
Doctrines / Principles – Doctrine of competence-competence –
Comparative analysis – Arbitration and Conciliation Act 1996 – s.16.
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay
Kishan Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra,
JJ.): The doctrine of kompetenz-kompetenz (also known as competence
competence), as originally developed in Germany, was traditionally
understood to imply that arbitrators are empowered to make a ﬁnal ruling
on their own jurisdiction, with no subsequent judicial review of the decision
by any court – However, many jurisdictions allow an arbitral tribunal to
render a decision on its jurisdiction, subject to substantive judicial review
– The UK position is that although the arbitral tribunal is empowered to
consider whether it has jurisdiction, its determination is subject to the
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1085
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899

examination of the courts – The courts in the United States have considered
the principle of competence-competence to be intertwined with the
separability presumption – The Singapore High Court has given full eﬀect
to the doctrine of competence-competence since the arbitral tribunal gets
the ﬁrst priority to determine issues even with respect to the very existence
of the arbitration agreement, while the jurisdiction of the courts is limited
to a prima facie determination – s.16 of the Arbitration Act recognizes the
doctrine of competence-competence in Indian arbitration law. [Paras 115,
117, 118, 119, 120]
Doctrines / Principles – Doctrine of competence-competence
–Positive and negative aspects of the doctrine – Negative competence-
competence – Discussed.
Held (per Dr. D.Y. Chandrachud, CJI) (for himself, Sanjay Kishan
Kaul, B.R Gavai, Surya Kant, J B Pardiwala and Manoj Misra, JJ.): The
international arbitration law as well as domestic law prioritize the arbitral
tribunal by permitting them to initially decide challenges to their authority
instead of the courts – The policy consideration behind this approach is
twofold: ﬁrst, to recognize the mutual intention of the parties of choosing
the arbitrator to resolve all their disputes about the substantive rights and
obligations arising out of contract; and second, to prevent parties from
initiating parallel proceedings before courts and delaying the arbitral process
– This is the positive aspect of the doctrine of competence-competence –
The negative aspect, in contrast, speaks to the national courts – It instructs
the courts to limit their interference at the referral stage by deferring to the
jurisdiction of the arbitral tribunal in issues pertaining to the existence and
validity of an arbitration agreement – Allowing arbitral tribunals to ﬁrst
rule on their own jurisdiction and later allowing the courts to determine if
the tribunal exercised its powers properly safeguards both the power and
authority of the arbitral tribunal as well as the courts – The negative aspect
of the doctrine has been expressly recognized by Indian courts – Considering
both the positive and negative facets, the principle can be deﬁned as a rule
whereby arbitrators must have the ﬁrst opportunity to hear challenges relating
to their jurisdiction, which is subject to subsequent review by courts. [Paras
129, 130]
1086 SUPREME COURT REPORTS [2023] 15 S.C.R.

Arbitration and Conciliation Act, 1996 – Arbitration Act is a
legislation enacted to inter alia consolidate the law relating to arbitration
in India – It will have primacy over the Stamp Act and the Contract
Act in relation to arbitration agreements. [Para 166 in judgment of Dr.
D.Y. Chandrachud, CJI]
Interpretation of Statutes – Harmonious construction – Provisions
contained in two statutes must be, if possible, interpreted in a
harmonious manner to give full eﬀect to both the statutes – In providing
a harmonious interpretation, the Court has to be cognizant of the
fact that it does not defeat the purpose of the statutes or render them
ineﬀective. [Para 165 in judgment of Dr. D.Y. Chandrachud, CJI]
Interpretation of Statutes – Non-obstante clause – Held: Although
a non-obstante clause must be allowed to operate with full vigour, its
eﬀect is limited to the extent intended by the legislature. [Para 77 in
judgment of Dr. D.Y. Chandrachud, CJI]
Words and Phrases – “admissible”. [Para 44 in judgment of Dr.
D.Y. Chandrachud, CJI]
Words and Phrases – Word “shall” – In ss.33 and 35 of the
Stamp Act – Meaning and eﬀect of. [Para 189 in judgment of Dr. D.Y.
Chandrachud, CJI]
LIST OF CITATIONS AND OTHER REFERENCES
In the judgment of Dr D.Y. Chandrachud, CJI
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SCC 1 and SMS Tea Estates (P) Ltd. v. Chandmari Tea Co. (P) Ltd (2011)
14 SCC 66 : [2011] 9 SCR 382 – overruled.
Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg.
Ltd. (2019) 9 SCC 209 : [2019] 5 SCR 579 – overruled to an extent.
Uttarakhand Purv Sainik Kalyan Nigam Ltd v. Northern Coal Field
(2020) 2 SCC 455 – relied on.
Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1 : [2020]
11 SCR 1001 – clariﬁed.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1087
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899

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1088 SUPREME COURT REPORTS [2023] 15 S.C.R.

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IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1089
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899

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1090 SUPREME COURT REPORTS [2023] 15 S.C.R.

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In the judgment of Sanjiv Khanna, J.
N N Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd. (2023) 7
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Vidya Drolia and Others v. Durga Trading Corporation (2021) 2 SCC
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Dreyfus Commodities Asia Pvt. Ltd. (2015) 13 SCC 477: [2014] 12 SCR
488; B.O.I. FinanceLtd. v. Custodian and Others (1997) 10 SCC 488: [1997]
3 SCR 51; Canara Bank and Others v. Standard Chartered Bank (2002)
10 SCC 697; Swiss Timing Ltd. v. Commonwealth Games 2010 Organising
Committee (2014) 6 SCC 677: [2014] 6 SCR 514; Avitel Post Studioz Ltd.
v. HSBC PI Holdings (Mauritius) Ltd. (2021) 4 SCC 713: [2020] 10 SCR
791; Career Institute Educational Society v. Om Shree Thakurji Educational
Society 2023 SCC OnLine SC 586 and Garware Wall Ropes Ltd. v. Coastal
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1091
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899

Marine Constructions & Engg. Ltd. (2019) 9 SCC 209: [2019] 5 SCR 579
– referred to.
Ram Rattan v. Parma Nand AIR 1946 PC 51– referred to.
BNA v. BNB and Another [2019] SGHC 142 and Insigma Technology
Co Ltd v. Alstom Technology Ltd [2009] SGCA 24 – referred to.
OTHER CASE DETAILS INCLUDING IMPUGNED
ORDER AND APPEARANCES

INHERENT/CIVIL ORIGINAL JURISDICTION: Curative Petition
(C) No. 44 of 2023 in Review Petition (C) No.704 of 2021 in Civil Appeal
No. 1599 of 2020.
From the Judgment and Order dated 20.07.2021 in RP (C) No.704 of
2021 and dated 14.02.2020 in CA No.1599 of 2020 of the Supreme Court
of India.
With
Arbitration Petition No. 25 of 2023.
Appearances:
Arvind P Datar, Nikhil Sakhardande, Jayant Mehta, Sr. Advs., Debesh
Panda, Ms. Amrita Panda, Naman Maheshwari, Ms. Snehal Maheshwari,
Rameshwar Totala, Rahul Totala, Udbhav Gady, Ashish Venugopal,
Ms. Sonali Mathur, Siddharth Sijoria, Garv Malhotra, Eshan A Chaturvedi,
Arijit Sanyal, Ms. Arundhati Kale, Omar Ahmad, Pratyush Miglani, Pranav
Mago, Kanishk Aggrawal, Sri Aditya Kumar, Sooraj Sharma, Ms. Payal
Chawla, Ms. Hina Shaheen, Ms. Yamini Daga, Shubhra Swami Paranjpe,
Raghav Bhatia, Soayib Qureshi, Advs. for the Petitioners.
Shyam Divan, Nikhil Nayyar, Sr. Advs., Ms. Pritha Srikumar Iyer,
Sulabh Rewari, Divyanshu Rai, Rongon Choudhary, Ms. Mansvini
Jain, Atharv Gupta, Ravi Raghunath, Ms. Aakashi Lodha, Dhanaram
Ramachandran, Advs. for the Respondents.
Gourab Banerji, Sr. Adv., T S Sundaram, Subhro Prokas Mukherjee,
Venkata Supreeth, Mohit Pandey, Rakesh Talukdar, Shashank Garg, Shivank
Dideli, (Amicus in NN Global)
1092 SUPREME COURT REPORTS [2023] 15 S.C.R.

Darius J Khambata, Nakul Dewan, Ms. Malvika Trivedi, K Ramakanth
Reddy, Arvind Verma, Prashanto Chandra Sen, Sr. Advs., Vijayendra
Pratap Singh, Abhijnan Jha, Ms. Shreya Choudhary, Ankitesh Ojha,
Tushar Hathiramani, Ms. Shreenandini Mukhopadhyay, Ms. Vidhi Shah,
Pradhuman Gohil, Mrs. Taruna Singh Gohil, Ms. Ranu Purohit, Alapati
Sahithya Krishna, Rushabh N Kapadia, Ms. Nidhi Mittal, Neil Chatterjee,
Ms. Nooreen Sarna, Ms. Tansi Fotedar, Soumil Jhanwar, Satyender Saharan,
Rohan Naik, Sathvik Chandrashekar, Rahul Arya, Premlal Krishnan, Vivek
Singh, Ms. Bani Dixit, Madhav Bhatia, Shailendra Slaria, Yogesh Sharma,
Mukesh Sharma, Ms. Sujal, Himanshu Kapoor, Alok Tripathi, Shivam
Singh, Ms. Mugdha Pande, Jaideep Khanna, Sahil Bhatia, Suyash Vyas,
Ms. Shaswati Parhi, Nishant Singh, Abir Phukan, Kuriakose Varghese, V
Shyamohan, Ms. Eshita Baruah, Vedant Goel, Arjun Chopra for M/s Kmnp
Law, Kartik Seth, Siddharth Seth, Mrs. Shriya Gilhotra, Prashanth Dixit,
Arushi Singh Rathore, Saurav Chaturvedi, Ankit Gupta, Mahesh Bhati for
M/s Chambers of Kartik Seth, Dr Vivek Sharma, Sameer Rohtagi, Ms.
Simran Brar, Ms. Apoorva Neral, Ms. Sanya Dua, Swastik Dalai, M/s.
Karanjawala & Co, Rahul G Tanwani, Anantha Narayana MG, Shubhendu
Anand, Ayush Anand, Sudipto Sircar, Aditya Shekhar, VC Shukla, Mrs
Sindoora Vnl, Ms. Aditi Tripathi, Ms. Vidhi Thakar, Aman Shukla, Prastut
Dalvi, Alabhya Dhamija, Manan Shanghai, Siddharth Relan, Ms. Charu
Ambwani, Ms. Komal Agarwal, Ms. Kavya Vijay, Ashutosh Srivastava,
Umesh Chandra Srivastava, Ms. Manisha Ambwani, Rajul Srivastav, Ms.
Roohe Hina Dua, Harshit Khanduja, Randeep Sachdeva, Arun Pandit, Ms.
Dhanakshi Gandhi, Sahib Kochhar, Pratham Mehrotra, Ms. Shreya Arora,
Tejas Karia, Ms. Shruti Sabharwal, Ms. Vrinda Pareek, Dr. Rishab Gupta,
Sanyat Lodha for Shardul S Shroﬀ, George Pothan Poothicote, Ms. Jyoti
Singh, Ms. Somya Yadava, Ms. Khyati Jain, Gauhar Mirza, Ms. Hiral Gupta,
Ms. Sukanya Singh, Ms. Nilakshi Srivastava, Abhinav Chahar, Rohit Rahar,
Kunal Vajani, Shubhang Tandon, Guneet Sidhu, Ms. Manisha Singh, Ashu
Pathak, Siddhant Buxy, Ms. Priyanka Vora, Debanshu Khettry, Varun K
Chopra, Mehul Sharma, Abhishek Kandwal for M/s VKC Law Oﬃces, PV
Amarnadha Prasad, Ms. Vijayshree Pattnaik, Debesh Panda, Ms. Diya Kapur,
Raghav Kumar, Aditya Ladha, Ms. Gahena Gambani, Ms. Liz Mathew,
Ankur Kashyap, Ajith S Ranganathan, Rohit Rajershi, Abhay Singh, Aman
Bajaj, Advs. for the Intervenors.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1093
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899

JUDGMENT / ORDER OF THE SUPREME COURT

JUDGMENT

DR. DHANANJAYA Y CHANDRACHUD, CJI
A. Reference .................................................................................. 5*
B. Submissions ............................................................................ 12*
C. Maintainability ....................................................................... 18*
D. The Indian Stamp Act 1899 ................................................... 22*
i. Overview .............................................................................. 22*
ii. The consequences of the failure to stamp an instrument 27*
a. The procedure under the Stamp Act .......................... 27*
b. The diﬀerence between inadmissibility and voidness ...32*
c. Section 35 of the Stamp Act renders a document
inadmissible and not void ...........................................34*
iii. The purpose of the Stamp Act .......................................... 38*
E. The Arbitration and Conciliation Act 1996........................... 40*
i. Arbitral autonomy ............................................................. 42*
ii. Principle of minimum judicial interference ................... 45*
iii. The Arbitration Act is a self-contained code ................. 52*
iv. Principles of modern arbitration .................................... 54*
F. The law on the arbitration agreement ................................... 55*
i. Separability of the arbitration agreement .......................... 56*
d. United Kingdom ................................................................. 58*
e. United States of America .................................................... 61*
f. Singapore ............................................................................. 62*

* Ed Note: Pagination is as per the original judgment.
1094 SUPREME COURT REPORTS [2023] 15 S.C.R.

g. International Conventions ................................................... 62*

h. India .................................................................................... 64*

G. The doctrine of competence-competence .............................. 70*

i. Comparative analysis ........................................................ 71*

ii. India ................................................................................... 73*

iii. Negative competence-competence .................................. 79*

H. Judicial interference under the Arbitration Act ................... 81*

I. Harmonious construction of the Arbitration Act, the Stamp Act,
and the Contract Act ...............................................................97*

i. The Arbitration Act will have primacy with respect to
arbitration agreements .....................................................101*
a. The Arbitration Act is a special law and the Indian Contract
Act and the Stamp Act are general laws ........................101*
b. Section 5 of the Arbitration Act .................................... 104*
c. Parliament was aware of the Stamp Act when it enacted the
Arbitration Act ...............................................................106*
ii. Harmonious construction of the three statutes under
consideration ........................................................................106*

a. The eﬀect of the competence-competence doctrine ..... 106*

b. The eﬀect of the word “shall” in Sections 33 and 35 of the
Stamp Act....................................................................... 111*

c. The object of the Stamp Act is preserved .....................113*

d. The interpretation of the law must give eﬀect to the purpose
of the Arbitration Act in addition to the Stamp Act...... 114*
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1095
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

J. SMS Tea Estates and Garware Wall Ropes were wrongly
decided ................................................................................... 115*
i. SMS Tea Estates ................................................................115*
ii. Garware Wall Ropes........................................................119*
K. The Appointment of Arbitrators by the Chief Justice of India
Scheme, 1996 ........................................................................124*
L. Vidya Drolia does not deal with the issue of stamping ....... 126*
M. Conclusions .......................................................................... 129*

A*. Reference
1. This Court has been called upon to resolve an issue which arose in
the context of three statutes – the Arbitration and Conciliation Act 1996 1,
the Indian Stamp Act 18992, and the Indian Contract Act 1872.3 The Stamp
Act imposes duty on “instruments”. An instrument which is unstamped or
insuﬃciently stamped is inadmissible in evidence and cannot be acted upon
in terms of its provisions. Arbitration agreements are often embedded in
underlying instruments or substantive contracts. When an application is made
for the appointment of an arbitrator, an objection is raised on the ground
that the arbitration agreement is inadmissible because it is in an instrument
which is unstamped or inadequately stamped. The primary issue that arises is
whether such arbitration agreements would be non-existent, unenforceable,
or invalid if the underlying contract is not stamped. A brief description of
the context in which this question arises follows.
2. In N N Global Mercantile (P) Ltd. v. Indo Unique Flame Ltd.,4
(hereinafter referred to as “N N Global 1”) a Bench of three Judges of
this Court was called upon in a Special Leave Petition to determine the
enforceability of an arbitration agreement contained in an unstamped
work order. The Bench, speaking through Justice Indu Malhotra, held that

* Ed. Note: PART A
1 “Arbitration Act”
2 “Stamp Act”
3 “Contract Act”
4 (2021) 4 SCC 379
1096 SUPREME COURT REPORTS [2023] 15 S.C.R.

an arbitration agreement, being separate and distinct from the underlying
commercial contract, would not be rendered invalid, unenforceable, or
non-existent. The Court held that the non-payment of stamp-duty would not
invalidate even the underlying contract because it is a curable defect. In the
process, this Court adopted a view at variance with SMS Tea Estates (P)
Ltd. v. Chandmari Tea Co. (P) Ltd5 and Garware Wall Ropes Ltd. v.
Coastal Marine Constructions & Engg. Ltd.6 In SMS Tea Estates (supra),
a two-Judge Bench of this Court held that an arbitration agreement in an
unstamped contract could not be acted upon. A two-Judge Bench of this
Court in Garware Wall Ropes (supra) relied on SMS Tea Estates (supra)
to hold that an arbitration agreement in an unstamped commercial contract
would not “exist” as a matter of law and could not be acted upon until the
underlying contract was duly stamped:
“22. When an arbitration clause is contained “in a contract”, it
is signiﬁcant that the agreement only becomes a contract if it is
enforceable by law. We have seen how, under the Stamp Act, an
agreement does not become a contract, namely, that it is not enforceable
in law, unless it is duly stamped. Therefore, even a plain reading of
Section 11(6-A), when read with Section 7(2) of the 1996 Act and
Section 2(h) of the Contract Act, would make it clear that an arbitration
clause in an agreement would not exist when it is not enforceable by
law. This is also an indicator that SMS Tea Estates [SMS Tea Estates
(P) Ltd. v. Chandmari Tea Co. (P) Ltd., (2011) 14 SCC 66 : (2012) 4
SCC (Civ) 777] has, in no manner, been touched by the amendment
of Section 11(6-A).
[…]
29. This judgment in Hyundai Engg. case [United India Insurance Co.
Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607
: (2019) 2 SCC (Civ) 530] is important in that what was speciﬁcally
under consideration was an arbitration clause which would get
activated only if an insurer admits or accepts liability. Since on facts it
was found that the insurer repudiated the claim, though an arbitration

5 (2011) 14 SCC 66
6 (2019) 9 SCC 209
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1097
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

clause did “exist”, so to speak, in the policy, it would not exist in law,
as was held in that judgment, when one important fact is introduced,
namely, that the insurer has not admitted or accepted liability. Likewise,
in the facts of the present case, it is clear that the arbitration clause that
is contained in the sub-contract would not “exist” as a matter of law
until the sub-contract is duly stamped, as has been held by us above.
The argument that Section 11(6-A) deals with “existence”, as opposed
to Section 8, Section 16 and Section 45, which deal with “validity” of
an arbitration agreement is answered by this Court’s understanding
of the expression “existence” in Hyundai Engg. case [United India
Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018)
17 SCC 607 : (2019) 2 SCC (Civ) 530], as followed by us.”
Thereafter, a three-Judge Bench of this Court in Vidya Drolia v.
Durga Trading Corporation,7 cited paragraph 29 of Garware Wall Ropes
(supra) (extracted above) with approval for the proposition that an arbitration
agreement exists only when it is valid and legal:
“146. We now proceed to examine the question, whether the word
“existence” in Section 11 merely refers to contract formation
(whether there is an arbitration agreement) and excludes the question
of enforcement (validity) and therefore the latter falls outside the
jurisdiction of the court at the referral stage. On jurisprudentially
and textualism it is possible to diﬀerentiate between existence of an
arbitration agreement and validity of an arbitration agreement. Such
interpretation can draw support from the plain meaning of the word
“existence”. However, it is equally possible, jurisprudentially and on
contextualism, to hold that an agreement has no existence if it is not
enforceable and not binding. Existence of an arbitration agreement
presupposes a valid agreement which would be enforced by the court
by relegating the parties to arbitration. Legalistic and plain meaning
interpretation would be contrary to the contextual background
including the definition clause and would result in unpalatable
consequences. A reasonable and just interpretation of “existence”
requires understanding the context, the purpose and the relevant legal

7 (2021) 2 SCC 1
1098 SUPREME COURT REPORTS [2023] 15 S.C.R.

norms applicable for a binding and enforceable arbitration agreement.
An agreement evidenced in writing has no meaning unless the parties
can be compelled to adhere and abide by the terms. A party cannot
sue and claim rights based on an unenforceable document. Thus, there
are good reasons to hold that an arbitration agreement exists only
when it is valid and legal. A void and unenforceable understanding is
no agreement to do anything. Existence of an arbitration agreement
means an arbitration agreement that meets and satisﬁes the statutory
requirements of both the Arbitration Act and the Contract Act and
when it is enforceable in law.
147. We would proceed to elaborate and give further reasons:
147.1. (i) In Garware Wall Ropes Ltd. [Garware Wall Ropes Ltd. v.
Coastal Marine Constructions & Engg. Ltd., (2019) 9 SCC 209 : (2019)
4 SCC (Civ) 324] , this Court had examined the question of stamp duty
in an underlying contract with an arbitration clause and in the context
had drawn a distinction between the ﬁrst and second part of Section
7(2) of the Arbitration Act, albeit the observations made and quoted
above with reference to “existence” and “validity” of the arbitration
agreement being apposite and extremely important, we would repeat
the same by reproducing para 29 thereof : (SCC p. 238)
[…]
Existence and validity are intertwined, and arbitration agreement does
not exist if it is illegal or does not satisfy mandatory legal requirements.
Invalid agreement is no agreement.”
3. N N Global 1 (supra) noted the decision of the co-ordinate Bench
in Vidya Drolia (supra) and doubted the correctness of the view adopted in
paragraphs 22 and 29 of Garware Wall Ropes (supra) and in paragraphs
146 and 147 of Vidya Drolia (supra) (extracted above). It referred the
following issue to a Bench of ﬁve Judges:
“58. […] Whether the statutory bar contained in Section 35 of the
Stamp Act, 1899 applicable to instruments chargeable to stamp duty
under Section 3 read with the Schedule to the Act, would also render
the arbitration agreement contained in such an instrument, which
is not chargeable to payment of stamp duty, as being non-existent,
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1099
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

unenforceable, or invalid, pending payment of stamp duty on the
substantive contract/ instrument?”
4. The Constitution Bench in N N Global Mercantile (P) Ltd. v. Indo
Unique Flame Ltd.8 (hereinafter referred as “N N Global 2”) answered
the reference. By a majority of 3:2, it was held that NN Global 1 (supra)
does not represent the correct position of law. The majority judgment
(authored by Justice K. M. Joseph for himself and Justice Aniruddha Bose
with a concurring judgment by Justice C. T. Ravikumar) upheld the view
taken by this Court in SMS Tea Estates (supra) and Garware Wall Ropes
(supra). Justice Ajay Rastogi and Justice Hrishikesh Roy delivered separate
dissenting judgments. The conclusions of the majority can be summarized
in the following terms:
a. An unstamped instrument containing an arbitration agreement
is void under Section 2(g) of the Contract Act;
b. An unstamped instrument, not being a contract and not
enforceable in law, cannot exist in law. The arbitration agreement
in such an instrument can be acted upon only after it is duly
stamped;
c. The “existence” of an arbitration agreement contemplated under
Section 11(6A) of the Arbitration Act is not merely a facial
existence or existence in fact, but also “existence in law”;
d. The Court acting under Section 11 of the Arbitration Act cannot
disregard the mandate of Sections 33 and 35 of the Stamp
Act requiring it to examine and impound an unstamped or
insuﬃciently stamped instrument; and
e. The certiﬁed copy of an arbitration agreement must clearly
indicate the stamp duty paid.
5. The minority judgment adopted a diﬀerent legal approach. Justice
Ajay Rastogi noted that the scope of the referral court under Section 11 is
limited to the examination of the “existence” of an arbitration agreement.
He held that all the other debatable issues, including the issue of stamping,

8 (2023) 7 SCC 1
1100 SUPREME COURT REPORTS [2023] 15 S.C.R.

must be left for the arbitral tribunal to decide in view of Section 16 of the
Arbitration Act.
6. Justice Hrishikesh Roy relied on the scheme of the Stamp Act to
hold that an unstamped or insuﬃciently stamped document is not rendered
invalid or void ab initio because the failure to stamp an instrument is a
curable defect. Further, Justice Roy traced the evolution of the Arbitration
Act to observe that it promotes minimum judicial interference in the arbitral
process. He held that Section 11 of the Arbitration Act should be harmonized
with Section 35 of the Stamp Act by deferring the issue of stamping to the
arbitrator. In conclusion, Justice Roy held that SMS Tea Estates (supra)
and Garware Wall Ropes (supra) do not set out the correct position of law.
7. On 14 February 2020, a three-Judge Bench of this Court in
Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar
Chattram v. Bhaskar Raju and Brothers9 cited SMS Tea Estates (supra)
with approval. In Bhaskar Raju (supra), this Court reversed the decision
of the High Court which had relied on an insuﬃciently stamped lease deed
to refer the parties to arbitration under Section 11(6) of the Arbitration Act.
Bhaskar Raju (supra) was decided before N N Global 1 (supra). However,
while the reference made by the three-Judge Bench in N N Global 1 (supra)
was pending, review petitions were ﬁled in Bhaskar Raju (supra). On 20
July 2021, the review petition was dismissed on the ground of delay as well
as on merits.10 On 7 December 2022, a curative petition was ﬁled seeking
a reconsideration of Bhaskar Raju (supra). The Constitution Bench in N
N Global 2 (supra) answered the reference and delivered its verdict on 25
April 2023.
8. On 8 May 2023, a three-Judge Bench of this Court issued notice
in a petition for the appointment of an arbitrator in Seka Dobric v. SA
Eonsoftech Private Limited.11 In the meantime, on 18 July 2023, a ﬁve-
Judge Bench of this Court issued notice in the curative petition in Bhaskar
Raju (supra) and listed the matter for hearing in open court on 24 August

9 (2020) 4 SCC 612
10 Review Petition (Civil) No. 704/2021 in CA No. 1599/2020.
11 Arbitration Petition No. 25 of 2023
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1101
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

2023.12 On 14 August 2023, the Bench in Seka Dobric (supra) observed
that one of the objections in that matter pertained to non-stamping of the
arbitration agreement. Therefore, the arbitration petition was directed to be
listed along with the curative petition in Bhaskar Raju (supra). The relevant
part of the order is extracted below:
“1. One of the objections which has been raised on behalf of the
respondent in response to the petition under Section 11(6) and 11(9)
of the Arbitration and Conciliation Act, 1996, is that the arbitration
agreement is not stamped.
2. Notice has already been issued by this Court on Curative Petition
(Civil) No 44 of 2023 which has been directed to be listed in the open
Court on 24 August 2023.
3. These proceedings shall be accordingly listed on 24 August 2023
together with the Curative Petition.
4. Counter aﬃdavit, if any, be ﬁled in the meantime.”
9. On 26 September 2023, a Bench of ﬁve Judges took up the arbitration
petition along with the curative petition. Considering the larger ramiﬁcations
and consequences of the decision in N N Global 2 (supra), the Court referred
the proceedings to a seven-Judge Bench. The relevant portion of the order
is extracted below:
“2. Having regard to the larger ramiﬁcations and consequences of the
view of the majority in N N Global Mercantile Private Limited vs
Indo Unique Flame Limited and Others, we are of the considered view
that the proceedings should be placed before a seven-Judge Bench to
reconsider the correctness of the view of the ﬁve-Judge Bench.”
10. It is in this context that the proceedings were listed before this
Bench of seven Judges on 11 October 2023, when this Court directed
the cause title to be changed to: “In Re: Interplay between the arbitration
agreements under the Arbitration and Conciliation Act 1996 and the Indian
Stamp Act 1899.” We are not reproducing the factual matrix of the case(s)

12 Curative Petition (Civil) No. 44 of 2023 in Review Petition (Civil) No. 704 of 2021 in
Civil Appeal No. 1599 of 2020.
1102 SUPREME COURT REPORTS [2023] 15 S.C.R.

in question as we have been called upon to determine the question of law.
In the process, we will consider the correctness of the view adopted in N N
Global 2 (supra) as well as other ancillary issues.
B*. Submissions
11. The petitioners broadly contend that N N Global 2 (supra) does not
lay down the correct position of law. The submissions of the learned counsel
on behalf of the petitioners and the intervenors are summarized below.
12. Mr Arvind Datar, learned senior counsel, made the following
submissions:
a. Section 11(6A) of the Arbitration Act expressly conﬁnes the
referral court’s power to the examination of the existence of an
arbitration agreement. Such examination does not extend to the
adequacy of the stamping under Section 33 of the Stamp Act;
b. The majority in N N Global 2 (supra) has eﬀectively nulliﬁed
Section 11(6A) which conﬁned the jurisdiction of this Court and
High Court to the examination of the existence of an arbitration
agreement;
c. Mandating the courts at the referral stage to follow the
prescriptions contained under Section 33 of the Stamp Act would
amount to exceeding the remit of examination. The Arbitration
Act conﬁnes the authority of referral court to the examination
of an arbitration agreement and not the instrument;
d. The arbitral tribunal has the competence to rule on its own
jurisdiction, including on issues pertaining to stamping;
e. The inclusion of the non-obstante clause in Section 5 of the
Arbitration Act limits the judicial intervention of courts in
the arbitral process and must be read harmoniously with the
provisions of the Stamp Act; and
f. The requirement of stamping does not render an instrument void.
It only makes the instrument inadmissible in evidence until the
defect is cured in accordance with the provisions of the Stamp
Act.
* Ed. Note: PART B
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1103
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

13. Mr Nikhil Sakhardande, learned senior counsel, made the following
submissions:
a. The deﬁciency in stamping is a curable defect, the eﬀect of which
ceases to operate as soon as the revenue interest of the state is
secured;
b. The non-payment of stamp duty, being a temporary aﬄiction,
cannot aﬀect the validity of an arbitration agreement; and
c. Mandating the courts at the Section 8 or Section 11 stage of the
Arbitration Act to examine the issue of stamping will defeat the
legislative purpose of minimal judicial interference enshrined in
Section 5 of the Arbitration Act.
14. Mr Darius J Khambata, learned senior counsel, made the following
submissions:
a. The doctrine of separability recognizes that an arbitration
agreement is a self-contained agreement, distinct from the
underlying contract;
b. An arbitration agreement contained within an underlying
contract would be a “distinct matter” in terms of Section 5 of
the Stamp Act, and would therefore continue to remain valid and
enforceable notwithstanding the non-stamping or inadequate
stamping of the contract;
c. The majority in N N Global 2 (supra) failed to give full eﬀect
to the doctrine of separability by incorrectly holding that non-
stamping of the underlying contract would ipso facto invalidate
the arbitration agreement contained in such contract;
d. The inadmissibility of a document on account of non-stamping
or insuﬃcient stamping does not result in the document being
void, invalid, or non-existent in law;
e. The majority in N N Global 2 (supra) disregarded the principle
of competence-competence by mandating the referral court under
Section 11 to examine an instrument for stamping;
1104 SUPREME COURT REPORTS [2023] 15 S.C.R.

f. At the pre-arbitral stage, the referral courts should leave all issues
pertaining to the stamping for the decision of the arbitral tribunal;
and
g. Section 33 of the Stamp Act provides that a person can have
authority by “consent of parties” to determine issues of stamping.
Such authority necessarily includes an arbitral tribunal which
is constituted by the consent of parties through an arbitration
agreement.
15. Mr Gourab Banerjee, learned senior counsel, made the following
submissions:
a. The object of the legislature in enacting the Stamp Act is to
protect public revenue and not to interfere with commercial life
by invalidating instruments vital to the smooth ﬂow of trade and
commerce;
b. Non-stamping does not render an instrument null and void. Such
instrument, even if unstamped, exists in fact and law;
c. Investigation into the aspects of stamping at the referral stage
under Section 11(6A) of the Arbitration Act is contrary to the
plain language and legislative intent of the said provision; and
d. The adjudication of stamp duty is a time-consuming process.
Mandating the court under Section 11 of the Arbitration Act to
adjudicate on the issue of stamp duty would be against the goal
of expeditious appointment of arbitrators contained under Section
11(13) of the Arbitration Act.
16. Mr Jayant Mehta, learner senior counsel, made the following
submissions:
a. Although compliance with the provisions of the Stamp Act is
imperative, its non-compliance is curable and does not render an
unstamped or insuﬃciently stamped instrument void or invalid;
b. The majority view in N N Global 2 (supra) does not deal with
Section 9 of the Arbitration Act creating a serious diﬃculty in
seeking interim measures of protection in both domestic as well
as international arbitrations seated in India; and
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1105
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

c. A ﬁscal statute does not bar the entertainability of a lis, except
where the statute speciﬁcally so prescribes. The Stamp Act does
not prescribe a bar on the entertainability of a lis.
17. The respondents largely contend that N N Global 2 (supra) is
correct and is in line with the consistent position adopted by this Court in
SMS Tea Estates (supra) and Garware Wall Ropes (supra), which ought not
to be disturbed. The submissions of the learned counsel for the respondents
and intervenors are summarized below.
18. Mr Shyam Divan, learned senior counsel, made the following
submissions:
a. The curative petition is not maintainable because none of the
pleaded grounds meet the requirements set out in Rupa Ashok
Hurra v. Ashok Hurra.13 Since the curative petition is not
maintainable, the reference to a seven-Judge Bench is without
jurisdiction;
b. The examination by the court under Section 11(6A) of the
Arbitration Act is not conﬁned to mere facial existence of an
arbitration agreement. The referral court has to prima facie
examine both the existence and validity of an arbitration
agreement;
c. Section 33 of the Stamp Act casts a mandatory legal requirement
on courts under Section 11 proceedings to impound an unstamped
or insuﬃciently stamped instrument. Such an instrument cannot
be admitted in evidence or otherwise acted upon until the stamp
duty and requisite penalty is paid; and
d. Section 5 of the Arbitration Act does not limit the operation of
the mandatory provisions of the Stamp Act.
19. Mr. Nikhil Nayyar, learned senior counsel, made the following
submissions:
a. The expression “examination” used in Section 11(6A)
contemplates the examination of the validity of an arbitration

13 (2002) 4 SCC 388
1106 SUPREME COURT REPORTS [2023] 15 S.C.R.

agreement, including the examination of suﬃciency of stamping;
and
b. The inclusion of Section 11(6A) in the Arbitration Act was not
intended to overcome the eﬀect of SMS Tea Estates (supra).
20. Mr Nakul Dewan, learned senior counsel, made the following
submissions:
a. The principle of separability contained in Section 16 of the
Arbitration Act implies that an arbitration agreement can be
treated as a distinct agreement only for the purpose of determining
its validity or enforceability;
b. The court exercising powers under Section 11 is not designated
by the parties to receive evidence for the purpose of substantive
adjudication of the rights and obligations of the parties; and
c. Even if an instrument containing an arbitration agreement
is unstamped or insuﬃciently stamped, such inadequacy or
insuﬃciency should not derail the appointment of an arbitrator
at the referral stage under Section 11(6A) of the Arbitration Act.
21. Ms Madhavi Divan, Mr Prashanto Chandra Sen, Mr Arvind Varma,
Mr Ramesh Singh, Mr K Ramakant Reddy, Mr Rahul G. Tanwani, Mr Abir
Phukan, Mr Tejas Karia, Mr Pallav Mongia, Mr Kunal Vajani, Ms Apporva
Neral, Mr Varun K Chopra, Dr. P. V. Amamadha Prasad, Mr Gauhar Mirza,
Ms Hiral Gupta, Mr George Poothan Poothicote, Ms Manisha Singh, Mr
Shadan Farasat, Mr Saurav Agarwal, Mr Siddhant Buxy, Ms Priyanka Vora,
Mr Debanshu Khettry, Mr Shivam Singh, Ms Diya Kapur and Mr Jatinder
Kumar Sethi supplemented these submissions.
C*. Maintainability
22. We address the preliminary issue of the maintainability of the
present proceedings in this segment. The record of proceedings indicates
that notice was issued in the curative petition on 18 July 2023. Subsequently,
in Seka Dobric (supra), a three-Judge Bench of this Court while hearing
a Section 11 application for the appointment of arbitrators, directed the
proceedings to be listed along with the curative petition. On 26 September
2023, the ﬁve-Judge Bench diﬀered with the view taken in N N Global 2
* Ed. Note: PART C
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1107
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

(supra) and referred the issue to a seven-Judge Bench. Thus, it is important
to note that along with the curative petition, a Section 11 petition is also
listed before this Court in the present proceedings.
23. The maintenance of judicial discipline is important for ensuring
consistency and certainty in the development of law. The rule of judicial
discipline demands that a Bench of lower strength is bound by the decision
of a larger Bench.14 Judicial discipline also dictates that generally, a Bench
of the same strength can question the correctness of a decision rendered
by a co-ordinate Bench. In such a situation, the matter is placed before a
Bench of larger strength.15
24. However, there have been situations where a Bench of lower
strength has diﬀered with the decision rendered by a Bench of larger strength.
In Union of India v. Hansoli Devi,16 a Bench of two Judges of this Court
diﬀered with a three-Judge Bench in matter pertaining to the interpretation
of the Land Acquisition Act 1894 and referred the matter to a Constitution
Bench. The Constitution Bench observed that the reference made by the
two-Judge Bench was “improper”. Nevertheless, the Constitution Bench
decided to answer the reference “since the questions involved are pending
in many cases in diﬀerent High Courts and certain doubts have arisen with
regard to the interpretation to the provisions of Section 28-A of the Act.” In
Central Board of Dawoodi Bohra Community v. State of Maharashtra,17
a Constitution Bench of this Court held that the judicial course adopted in
Hansoli Devi (supra) was by way of exception rather than a rule. Therefore,
the rule of judicial discipline also has certain well-deﬁned exceptions.
25. The respondent has relied on the Constitution Bench decision of
this Court in Shilpa Sailesh v. Varun Sreenivasan,18 to submit that there is
no live cause or matter to justify the invocation of this Court’s jurisdiction.
The issue before the three-Judge Bench in Seka Dobric (supra) pertains to
the appointment of an arbitrator at Section 11 stage when the underlying
contract is unstamped or insuﬃciently stamped. The Bench directed the

14 Bharat Petroleum Corporation v. Mumbai Shramik Sangha, (2001) 4 SCC 448
15 Pradip Chandra Parija v. Pramod Chandra Patnaik, (2002) 1 SCC 1
16 (2002) 7 SCC 273
17 (2005) 2 SCC 673
18 2023 SCC OnLine SC 544
1108 SUPREME COURT REPORTS [2023] 15 S.C.R.

Section 11 application to be listed along with the curative petition in view of
the wider legal ramiﬁcations ﬂowing from N N Global 2 (supra). Therefore,
the respondent’s argument is misplaced because Seka Dobric (supra), which
is a live cause or matter, is also listed along with the curative petition.
26. The respondent has also argued that it was improper for the
Constitution Bench to exercise its curative jurisdiction to refer the matter
to this Bench of seven Judges. Order VI Rule 2 of the Supreme Court Rules
2013 provide that 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. In Kantaru Rajeevaru v. Indian
Young Lawyers Association,19 a nine-Judge Bench of this Court held that
the term “other proceeding” used in Order VI Rule 2 of the Supreme Court
Rules, 2013 is a comprehensive term giving widest freedom to a court of law
to do justice to the parties in the case. Accordingly, it was held that review
petitions also fall within the purview of the expression “other proceeding.”
In view of the decision in Kantaru Rajeevaru (supra), the term “other
proceeding” under Order VI Rule 2 of the Supreme Court Rules, 2013 will
also include curative petitions. Therefore, we ﬁnd no impropriety in the
reference made to this Bench.
27. Moreover, the reference raises important issues on points of law,
which require immediate consideration. In Central Board of Dawoodi
Bohra Community (supra), this Court laid down two exceptions to the
rules mentioned above:
“12. (3) The above rules are subject to two exceptions: (i) the abovesaid
rules do not bind the discretion of the Chief Justice in whom vests the
power of framing the roster and who can direct any particular matter
to be placed for hearing before any particular Bench of any strength;
and (ii) in spite of the rules laid down hereinabove, if the matter has
already come up for hearing before a Bench of larger quorum and that
Bench itself feels that the view of the law taken by a Bench of lesser
quorum, which view is in doubt, needs correction or reconsideration
then by way of exception (and not as a rule) and for reasons given by

19 (2020) 9 SCC 121
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1109
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

it, it may proceed to hear the case and examine the correctness of the
previous decision in question dispensing with the need of a speciﬁc
reference or the order of the Chief Justice constituting the Bench and
such listing. Such was the situation in Raghubir Singh [(1989) 2 SCC
754] and Hansoli Devi [(2002) 7 SCC 273].”
28. The two exceptional situations laid down in Central Board of
Dawoodi Bohra community (supra) have to be invoked cautiously, and
in situations involving wide ramiﬁcations for the law. In Ganga Sugar
Corporation Ltd. v. State of Uttar Pradesh,20 Justice V R Krishna Iyer
speaking for the Constitution Bench observed that the “legislative policy
in the country must accept as ﬁnal the pronouncements of this Court by a
Constitution Bench unless the subject be of such fundamental importance
to national life or the reasoning is so plainly erroneous in light of the
later thought that it is wiser to be ultimately right than to be consistently
wrong.” We are of the opinion that the reference by the ﬁve-Judge Bench
raises question of seminal importance with regard to the interpretation and
application of the arbitration law in India, which in turn has implications
for business and commerce in the country. Accordingly, we will answer the
reference without delving into the facts of the individual cases. The issue
of maintainability of the curative petition is left open and could be raised
by the respondent before an appropriate Bench.
D*. The Indian Stamp Act 1899
i. Overview
29. As the title suggests, the Stamp Act is a legislation which
consolidates the laws relating to the payment of stamp-duty on the execution
of certain instruments in the manner speciﬁed in the statute. Section 2(14)
deﬁnes “instrument” as follows:
“(14) “instrument” includes—
(a) every document, by which any right or liability is, or purports to
be, created, transferred, limited, extended, extinguished or recorded;

* Ed. Note: PART D
20 (1980) 1 SCC 223
1110 SUPREME COURT REPORTS [2023] 15 S.C.R.

(b) a document, electronic or otherwise, created for a transaction in
a stock exchange or depository by which any right or liability is, or
purports to be, created, transferred, limited, extended, extinguished
or recorded; and
(c) any other document mentioned in Schedule I, but does not
include such instruments as may be speciﬁed by the Government, by
notiﬁcation in the Oﬃcial Gazette”
30. The term “instrument” is deﬁned broadly, in an inclusive sense.
It includes electronic documents. Schedule I to the Stamp Act contains
descriptions of various instruments along with the stamp duty payable
on each of them. Stamp-duty is liable to be paid under Section 3, which
provides as follows:
“3. Instrument chargeable with duty.—Subject to the provisions of
this Act and the exemptions contained in Schedule I, the following
instruments shall be chargeable with duty of the amount indicated in
that Schedule as the proper duty therefore, respectively, that is to say—
(a) every instrument mentioned in that Schedule which, not having
been previously executed by any person, is executed in India on or
after the ﬁrst day of July, 1899;
(b) every bill of exchange payable otherwise than on demand, or
promissory note drawn or made out of India on or after that day and
accepted or paid, or presented for acceptance or payment, or endorsed,
transferred or otherwise negotiated, in India; and
(c) every instrument (other than a bill of exchange or promissory
note) mentioned in that Schedule, which, not having been previously
executed by any person, is executed out of India on or after that day,
relates to any property situate, or to any matter or thing done or to be
done, in India and is received in India:
Provided that no duty shall be chargeable in respect of—
(1) any instrument executed by, or on behalf of, or in favour of, the
Government in cases where, but for this exemption, the Government
would be liable to pay the duty chargeable in respect of such instrument;
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1111
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

(2) any instrument for the sale, transfer or other disposition, either
absolutely or by way of mortgage or otherwise, of any ship or vessel,
or any part, interest, share or property of or in any ship or vessel
registered under the Merchant Shipping Act, 1894, or under Act, 19
of 1838, or the India Registration of Ships Act, 1841, as amended by
subsequent Acts.
(3) any instrument executed, by, or, on behalf of, or, in favour of, the
Developer, or Unit or in connection with the carrying out of purposes
of the Special Economic Zone.
Explanation.—For the purposes of this clause, the expressions
“Developer”, “Special Economic Zone” and “Unit” shall have
meanings respectively assigned to them in clauses (g), (za) and (zc)
of Section 2 of the Special Economic Zones Act, 2005.”
31. Section 3 provides that the three categories of instruments in
clauses (a), (b) and (c) shall be chargeable with duty of the amount indicated
in Schedule I. The proviso to Section 3 indicates three other categories
in respect of which no duty shall be chargeable. In terms of Section 5 of
the Stamp Act, the duty chargeable on any instrument which comprises
or relates to several distinct matters is the aggregate amount of the duties
with which separate instruments (each comprising or relating to one of
the many matters) would be chargeable under the same statute. Section 6
governs situations where the same instrument falls within two or more of the
descriptions in Schedule I. In such a situation, if the duties chargeable under
the diﬀerent descriptions are diﬀerent, the instrument shall be chargeable
with the highest of them. The rule in Section 6 is subject to the provisions
of Section 5. As a consequence, Section 6 cannot be relied on to avoid the
payment of stamp-duty if an instrument relates to several distinct matters
with each such matter covered by a distinct entry in Schedule I. Section 6
is applicable only when an instrument relates to a single matter which is
covered by two or more descriptions in Schedule I, or when a single matter
in an instrument relating to several distinct matters is covered by two or
more descriptions in that schedule.
32. Sections 13 and 14 indicate the mode of stamping. In terms of
Section 13, every instrument written upon paper stamped with an impressed
1112 SUPREME COURT REPORTS [2023] 15 S.C.R.

stamp shall be written in such manner that the stamp may appear on the face
of the instrument and cannot be used for or applied to any other instrument.
Section 14 stipulates that no second instrument chargeable with duty
shall be written upon a piece of stamped paper upon which an instrument
chargeable with duty has already been written.21 Section 15 is signiﬁcant
because it indicates the eﬀect of non-compliance with Sections 13 and 14:
instruments written in contravention of Section 13 or Section 14 shall be
deemed to be unstamped.22
33. Chapter II of the Stamp Act provides for various other
contingencies or situations, including inter alia policies of sea-insurance,23
bonds, debentures, and securities,24 transactions in stock exchanges and
depositories,25 and instruments executed outside India.26 Chapter II also
provides for the valuation of stamp-duty, including for the conversion of
amounts expressed in foreign currencies,27 how to value stock and marketable
securities,28 the eﬀect of statement of rate of exchange or average price,29
instruments reserving interest,30 instruments connected with mortgages of
marketable securities,31 how the transfer and consideration of debt etc. is to
be charged,32 valuation in case of annuity,33 stamp where value of subject-
matter is indeterminate.34

21 The proviso to Section 14 provides as follows “Provided that nothing in this section
shall prevent any endorsement which is duly stamped or is not chargeable with duty
being made upon any instrument for the purpose of transferring any right created or
evidenced thereby, or of acknowledging the receipt of any money or goods the payment
or delivery of which is secured thereby.”
22 Section 15, Stamp Act
23 Section 7, Stamp Act
24 Sections 8 to 8F, Stamp Act
25 Section 9A, Stamp Act
26 Sections 18, 19, Stamp Act
27 Section 20, Stamp Act
28 Section 21, Stamp Act
29 Section 22, Stamp Act
30 Section 23, Stamp Act
31 Section 23A, Stamp Act
32 Section 24, Stamp Act
33 Section 25, Stamp Act
34 Section 26, Stamp Act
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1113
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

34. Section 29 indicates who the stamp duty is to be borne by (in the
absence of an agreement to the contrary) and Section 30 stipulates that a
receipt must be given in certain cases.
35. A person may also apply to the Collector for his opinion as to the
duty (if any) which is payable on a particular instrument, under Section
31 of the Stamp Act. The instrument given to the Collector for his opinion
may be executed or previously stamped, but there is no requirement that it
must be either executed or previously stamped.35 If an instrument brought
to the Collector under Section 31 is in their opinion chargeable with
duty, and they determine that it is already fully stamped, or that the duty
determined by them under Section 31 has already been paid, then they
shall certify by endorsement on such instrument that the full duty with
which it is chargeable has been paid.36 If the Collector is of the opinion
that the instrument is not chargeable with duty, they shall certify that it
is not so chargeable.37 Any instrument upon which an endorsement has
been made under Section 32 shall be deemed to be duly stamped or not
chargeable with duty, as the case may be.38 The proviso to Section 32 lists
three categories of instruments which the Collector is not authorised to
endorse under the same section.
36. Chapter IV of the Stamp Act details with the procedure to be
followed by various authorities if instruments which are liable to be
stamped are not duly stamped. The provisions of this Chapter are examined
in detail in the subsequent segment. Chapter V provides for allowances for
stamps (such as spoiled or misused stamps) in certain cases and Chapter VI
provides for reference of cases arising under the enactment to authorities
including the High Courts as well as for the revision of certain decisions
of courts regarding the suﬃciency of stamps. Chapter VII of the Stamp
Act indicates the penalties for non-compliance with its provisions and
ﬁnally, Chapter VIII contains certain supplementary provisions in relation
to the statute.

35 Section 31(1), Stamp Act
36 Section 32(1), Stamp Act
37 Section 32(2), Stamp Act
38 Section 32(3), Stamp Act
1114 SUPREME COURT REPORTS [2023] 15 S.C.R.

ii. The consequences of the failure to stamp an instrument
a. The procedure under the Stamp Act
37. Section 17 of the Stamp Act provides that all instruments
chargeable with duty and executed by any person in India shall be stamped
before or at the time of execution. Section 62 inter alia penalises a failure to
comply with Section 17. However, despite the mandate that all instruments
chargeable with duty must be stamped, many instruments are not stamped
or are insuﬃciently stamped. The parties executing an instrument may,
contrary to the mandate of law, attempt to avoid the payment of stamp duty
and may therefore refrain from stamping it. Besides this situation, there are
other ways in which an instrument may not be properly stamped, including
the following:
a. The duty may have been paid under an incorrect description
under Schedule I;
b. The duty paid may be of a suﬃcient amount but of improper
description;
c. The provisions of Section 5 which govern instruments relating
to several distinct matters may not have been complied with; or
d. The instrument may be written in contravention of Sections 13
and 14, and thereby deemed to be unstamped in terms of Section
15.
38. The legislature recognized that the mandate of the Stamp Act
may not be complied with because of the reasons listed in the preceding
paragraph or otherwise. It was in recognition of this fact that the provisions
in Chapter IV were enacted. Section 33 provides that every person who has
authority to receive evidence (either by law or by consent of parties) shall
impound an instrument which is, in their opinion, chargeable with duty but
which appears to be not duly stamped. The power under Section 33 may be
exercised when an instrument is produced before the authority or when they
come across it in the performance of their functions. Persons in charge of
public oﬃce except police oﬃcers are similarly empowered under Section
33, which is reproduced below:
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1115
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

“33. Examination and impounding of instruments.—(1) Every person
having by law or consent of parties authority to receive evidence, and
every person in charge of a public oﬃce, except an oﬃcer of police,
before whom any instrument, chargeable, in his opinion, with duty,
is produced or comes in the performance of his functions, shall, if it
appears to him that such instrument is not duly stamped, impound
the same.
(2) For that purpose every such person shall examine every instrument
so chargeable and so produced or coming before him, in order
to ascertain whether it is stamped with a stamp of the value and
description required by the law in force in India when such instrument
was executed or ﬁrst executed:
Provided that—
(a) nothing herein contained shall be deemed to require any Magistrate
or Judge of a Criminal Court to examine or impound, if he does not
think ﬁt so to do, any instrument coming before him in the course of
any proceeding other than a proceeding under Chapter XII or Chapter
XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898);
(b) in the case of a Judge of a High Court, the duty of examining and
impounding any instrument under this section may be delegated to
such oﬃcer as the Court appoints in this behalf.
(3) For the purposes of this section, in cases of doubt,—
(a) the State Government may determine what oﬃces shall be deemed
to be public oﬃces; and
(b) the State Government may determine who shall be deemed to be
persons in charge of public oﬃces.”
39. Section 35 is of particular signiﬁcance to the issue before this
Court – it renders instruments which are not duly stamped inadmissible in
evidence. Section 35 reads as follows:
“35. Instruments not duly stamped inadmissible in evidence, etc.—
No instrument chargeable with duty shall be admitted in evidence
for any purpose by any person having by law or consent of parties
authority to receive evidence, or shall be acted upon, registered or
1116 SUPREME COURT REPORTS [2023] 15 S.C.R.

authenticated by any such person or by any public oﬃcer, unless
such instrument is duly stamped:
Provided that—
(a) any such instrument [shall] be admitted in evidence on payment
of the duty with which the same is chargeable or, in the case of an
instrument insuﬃciently stamped, of the amount required to make up
such duty, together with a penalty of ﬁve rupees, or, when ten times
the amount of the proper duty or deﬁcient portion thereof exceeds ﬁve
rupees, of a sum equal to ten times such duty or portion;
(b) where any person from whom a stamped receipt could have been
demanded, has given an unstamped receipt and such receipt, if stamped,
would be admissible in evidence against him, then such receipt shall
be admitted in evidence against him on payment of a penalty of one
rupee by the person tendering it;
(c) where a contract or agreement of any kind is effected by
correspondence consisting of two or more letters and any one of the
letters bears the proper stamp, the contract or agreement shall be
deemed to be duly stamped;
(d) nothing herein contained shall prevent the admission of any
instrument in evidence in any proceeding in a Criminal Court, other
than a proceeding under Chapter XII or Chapter XXXVI of the Code
of Criminal Procedure, 1898 (5 of 1898);
(e) nothing herein contained shall prevent the admission of any
instrument in any Court when such instrument has been executed by
or on behalf of the Government or where it bears the certiﬁcate of the
Collector as provided by Section 32 or any other provision of this Act.”
(emphasis supplied)
In terms of Section 35, an instrument which is not duly stamped is
inadmissible in evidence for any purpose and it shall not be acted upon,
registered, or authenticated.39 Clause (a) of the proviso to Section 35

39 Subject to the proviso to Section 35.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1117
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

stipulates that the bar contained in the provision is removed upon the
payment of duty and the penalty (if any). The party or parties may pay the
duty chargeable to the person who has the authority to receive evidence
by law or by consent of parties. Section 35 is signiﬁcant because it gives
teeth to the Stamp Act by ensuring that stamp-duty is paid before rights and
obligations arising from an agreement are enforced.
40. Section 38(1) indicates how an instrument which is impounded
is to be dealt with:
“38. Instruments impounded how dealt with.—
(1) Where the person impounding an instrument under Section 33 has
by law or consent of parties authority to receive evidence and admits
such instrument in evidence upon payment of a penalty as provided
by Section 35 or of duty as provided by Section 37, he shall send to
the Collector an authenticated copy of such instrument, together with
a certiﬁcate in writing, stating the amount of duty and penalty levied
in respect thereof, and shall send such amount to the Collector, or to
such person as he may appoint in this behalf.
(2) In every other case, the person so impounding an instrument shall
send it in original to the Collector.”
41. The Collector is conferred with the power to impound an instrument
under Section 33. If any other person or authority impounds an instrument, it
must be forwarded to the Collector under clause (2) of Section 38. Once the
Collector receives an instrument, he has the power to stamp it under Section
40, if it is not a bill of exchange, a promissory note, or an instrument that
is chargeable with a duty that exceeds ten naye paise. The Collector may:
a. Certify by endorsement that the instrument is duly stamped, if
they are of such an opinion;40
b. Certify by endorsement that the instrument is not chargeable with
duty, if they are of such an opinion;41 and

40 Section 40(1)(a), Stamp Act
41 ibid
1118 SUPREME COURT REPORTS [2023] 15 S.C.R.

c. Require the payment of the proper duty or the amount required
to make up the proper duty, if they are of the opinion that the
instrument is chargeable with duty and is not duly stamped.42
The Collector may also levy a penalty, as provided by Section 40.
If the instrument has been sent to the Collector under Section 38, it must
be returned to the impounding oﬃcer after it is dealt with as described
above.43
42. In terms of Section 42 of the Stamp Act, an instrument is admissible
in evidence once the payment of duty and a penalty (if any) is complete. It
stipulates that either the person admitting the instrument in evidence or the
Collector, as the case may be, shall certify by endorsement that the proper
duty has been paid.
43. The procedure contemplated by the Stamp Act facilitates the
collection of revenue. It permits instruments to be impounded not only by
persons in charge of a public oﬃce or those who are empowered by law
to receive evidence but also by any person who is empowered to receive
evidence by consent of parties. The statute then sets out the procedure to
be followed upon impounding a document. This procedure ensures that
stamp-duty is paid. After the payment of the appropriate amount under the
appropriate description in Schedule I and the penalty (if any), the Stamp
Act provides for the certiﬁcation of such payment by an endorsement by
the appropriate authority. Once an instrument has been endorsed, it may be
admitted into evidence, registered, acted upon or authenticated as if it had
been duly stamped.
b. The diﬀerence between inadmissibility and voidness
44. The admissibility of an instrument in evidence is distinct from its
validity or enforceability in law. Section 2(g) of the Contract Act provides
that an agreement not enforceable by law is said to be void. The admissibility
of a particular document or oral testimony, on the other hand, refers to
whether or not it can be introduced into evidence. P Ramanatha Aiyar’s The
Law Lexicon deﬁnes ‘admissible’ thus:

42 Section 40(1)(b), Stamp Act
43 Section 40(3), Stamp Act
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1119
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

“Admissible
Proper to be received, capable and worthy of being admitted. As
applied to evidence, the term means that it is of such a character
that the court or judge is bound to receive it, that is, allow it to
be introduced in evidence”44
Many statutes have rules on the admissibility of documents, with the
Indian Evidence Act 187245 being one of them.
45. An agreement can be void without its nature as a void agreement
having an impact on whether it may be introduced in evidence. Similarly,
an agreement can be valid but inadmissible in evidence. For instance, A and
B may enter into an agreement by which B is restrained from undertaking
a particular trade. This agreement would be void under Section 27 of the
Contract Act46 but this does not impact its admissibility in evidence should
A attempt to enforce it against B. The court will not enforce the agreement
between the parties because it is void but the agreement is nonetheless
admissible in evidence.
46. 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.
c. Section 35 of the Stamp Act renders a document inadmissible
and not void
47. The majority judgment in N N Global 2 (supra) summed up its
holding in the following terms:

44 P Ramanatha Aiyar, The Law Lexicon (Second edition, 1997)
45 “Evidence Act”
46 “27. Agreement in restraint of trade void.— Every agreement by which any one is
restrained from exercising a lawful profession, trade or business of any kind, is to that
extent void.
Exception 1.—Saving of agreement not to carry on business of which goodwill is
sold.—One who sells the goodwill of a business may agree with the buyer to refrain
from carrying on a similar business, within speciﬁed local limits, so long as the buyer,
or any person deriving title to the goodwill from him, carries on a like business therein:
Provided that such limits appear to the Court reasonable, regard being had to the nature
of the business.”
1120 SUPREME COURT REPORTS [2023] 15 S.C.R.

“109. … An agreement which is unstamped or insuﬃciently stamped
is not enforceable, as long as it remains in the said condition. Such an
instrument would be void as being not enforceable [see Section 2(g)
of the Contract Act].”
The above observation conﬂates the distinction between enforceability
and admissibility.
48. Section 35 of the Stamp Act is unambiguous. It stipulates, “No
instrument chargeable with duty shall be admitted in evidence…” The term
“admitted in evidence” refers to the admissibility of the instrument. Sub-
section (2) of Section 42, too, states that an instrument in respect of which
stamp-duty is paid and which is endorsed as such will be “admissible in
evidence.” 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.”
49. In Thiruvengadam Pillai v. Navaneethammal,47 this Court noted
that the trial court and the High Court had doubted the authenticity of an
agreement for the sale of certain immoveable property because it was written
on two stamp papers purchased on diﬀerent dates. This Court held that this by
itself would not invalidate the agreement. It noticed the distinction between
the legal validity of the agreement and its admissibility:
“13. The Stamp Act is a ﬁscal enactment intended to secure revenue
for the State. In the absence of any rule requiring consecutively
numbered stamp papers purchased on the same day, being used for
an instrument which is not intended to be registered, a document
cannot be termed as invalid merely because it is written on two
stamp papers purchased by the same person on diﬀerent dates.
Even assuming that use of such stamp papers is an irregularity,

47 (2008) 4 SCC 530
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1121
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

the court can only deem the document to be not properly stamped,
but cannot, only on that ground, hold the document to be invalid.
Even if an agreement is not executed on requisite stamp paper, it
is admissible in evidence on payment of duty and penalty under
Sections 35 or 37 of the Stamp Act, 1899. If an agreement executed
on a plain paper could be admitted in evidence by paying duty and
penalty, there is no reason why an agreement executed on two stamp
papers, even assuming that they were defective, cannot be accepted
on payment of duty and penalty. But admissibility of a document
into evidence and proof of genuineness of such document are
diﬀerent issues.”
(emphasis supplied)
50. This has long been the position of law in India with respect to the
Stamp Act. In Gulzari Lal Marwari v. Ram Gopal,48 one of the parties
contended that the agreement was invalid because it was not properly
stamped. The portion of Section 35 which bars the admissibility of
unstamped instruments was the same then as it is now. The Calcutta High
Court held:
“…The eﬀect of the section is to make such an unstamped document
inadmissible in evidence, and unable to be acted upon by persons
having authority to receive evidence or by any public oﬃcer. It does
not aﬀect the validity of the document.
There is a clear distinction to be drawn between invalidity and
inadmissibility of documents. Certain statutes and sections render
documents invalid if they are not stamped. No section of the Indian
Stamp Act has this eﬀect…”
The position of law has also been noticed by the High Courts in other
cases including the Andhra Pradesh High Court in Boottam Pitchiah v.
Boyapati Koteswara Rao49.
51. In N N Global 2 (supra), this Court held that the failure to stamp
an arbitration agreement is not a “curable defect.” Relying on the provisions

48 1936 SCC OnLine Cal 275
49 1964 SCC OnLine AP 5
1122 SUPREME COURT REPORTS [2023] 15 S.C.R.

of the Contract Act as well as Section 11(6-A) of the Arbitration Act, it held
that an unstamped arbitration agreement is void. The relevant paragraphs
of the judgment of the majority are extracted below:
“103. … It may not be apposite to merely describe an unstamped
arbitration agreement as a “curable defect”. As long it remains an
unstamped instrument, it cannot be taken notice of for any purpose, as
contemplated in Section 35 of the Stamp Act. It remains unenforceable.
… It is “not enforceable in law”. In the said sense, it also cannot exist
in law. It would be void. Our view in this regard that voidness is
conﬂated to unenforceability receives fortiﬁcation from Section
2(j) of the Contract Act which renders a contract which ceases to
be enforceable void.”
(emphasis in original)
52. The above observation of this Court is incorrect. Section 2(j) of
the Contract Act provides as follows:
“(j) A contract which ceases to be enforceable by law becomes void
when it ceases to be enforceable.”
53. Section 2(j) is not attracted when an instrument is rendered
inadmissible under Section 35 of the Stamp Act. The eﬀect of the latter is not
to render an unstamped agreement unenforceable. If it was unenforceable, it
would imply that it was void. We have already discussed why an unstamped
or inadequately stamped agreement is not void in the preceding paragraphs.
Indeed, the approach of the majority in N N Global 2 (supra) to the Contract
Act would render unstamped agreements void ab initio and not void.
54. In N N Global 2 (supra), this Court also relied on Section 11(6A)
of the Arbitration Act to reach its conclusion:
“104. What Section 11(6-A) contemplates is a contract and it is not
an agreement which cannot be treated as a contract. This is despite
the use of the words “arbitration agreement” in Section 11(6-A). In
other words, contract must conform to Section 7 of the Act. It must
also, needless to say, fulﬁl the requirements of the Contract Act.”
(emphasis supplied)
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1123
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

55. Section 11(6-A)50 of the Arbitration Act is extracted below:
“(6-A) The Supreme Court or, as the case may be, the High Court,
while considering any application under sub-section (4) or sub-section
(5) or sub-section (6), shall, notwithstanding any judgment, decree or
order of any court, conﬁne to the examination of the existence of an
arbitration agreement.”
(emphasis supplied)
56. A plain reading of Section 11(6A) makes it evident that it is
referring to an arbitration agreement. Section 11(6A) provides that courts
must conﬁne themselves to an examination of the existence of the arbitration
agreement. The word “conﬁne” indicates the intention of the legislature
to limit the jurisdiction of the courts at the stage of the appointment of an
arbitrator.
57. In Vidya Drolia (supra), this Court held:
“21. The term “agreement” is not deﬁned in the Arbitration Act,
albeit it is deﬁned in Section 10 of the Contract Act, 1872 (for short
“the Contract Act”), … as contracts made by free consent of parties
competent to contract, for a lawful consideration and with a lawful
object, and are not thereby expressly declared to be void. Section 10
of the Contract Act also stipulates that aforesaid requirements shall not
aﬀect any law in force in India (and not expressly repealed) by which
a contract is required to be made in writing, in presence of witnesses
or any law relating to registration of documents. Thus, an arbitration
agreement should satisfy the mandate of Section 10 of the Contract
Act, in addition to satisfying other requirements stipulated in Section
7 of the Arbitration Act.”
58. The above observations are correct insofar as the arbitration
agreement must satisfy the requirements of the Contract Act. However, the
authority empowered to adjudicate whether the requirements of the Contract
Act are satisﬁed is the arbitral tribunal, under Section 16 of the Arbitration
Act. This is addressed in greater detail in the following segments.

50 Omitted by Act 33 of 2019. The omission is yet to be notiﬁed / take eﬀect.
1124 SUPREME COURT REPORTS [2023] 15 S.C.R.

iii. The purpose of the Stamp Act
59. The Stamp Act is a ﬁscal legislation which is intended to raise
revenue for the government. It is a mandatory statute. In Hindustan Steel
Ltd. v. Dilip Construction Co.,51 this Court dealt with the import of Sections
35, 36 and 42 of the Stamp Act. One of the parties relied on the diﬀerence
in the phraseology between Sections 35 and 36 to argue that an instrument
which was insuﬃciently stamped or not stamped could be admitted in
evidence upon the payment of duty and a penalty (if any) but that it could
not be acted upon, once admitted. It was argued that Section 35 operates as a
bar in two respects, namely, the admission of an instrument into evidence as
well as acting upon that instrument. It was argued that Section 36, in contrast
to Section 35, removed the bar in one respect alone – the admissibility of
the instrument into evidence. This Court rejected this argument and held
that the provisions of the Stamp Act clearly provide that an instrument could
be admitted into evidence as well as acted upon once the appropriate duty
has been paid and the instrument is endorsed:
“6. … The argument ignores the true import of Section 36. By that
section an instrument once admitted in evidence shall not be called in
question at any stage of the same suit or proceeding on the ground that
it has not been duly stamped. Section 36 does not prohibit a challenge
against an instrument that it shall not be acted upon because it is not
duly stamped, but on that account there is no bar against an instrument
not duly stamped being acted upon after payment of the stamp duty and
penalty according to the procedure prescribed by the Act. The doubt,
if any, is removed by the terms of Section 42(2) which enact, in terms
unmistakable, that every instrument endorsed by the Collector under
Section 42(1) shall be admissible in evidence and may be acted upon
as if it has been duly stamped.”
(emphasis in original)
60. In so holding, this Court made a signiﬁcant observation about the
purpose of the Stamp Act and the manner in which it is to be interpreted
by courts:

51 (1969) 1 SCC 597
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1125
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

“7. The Stamp Act is a ﬁscal measure enacted to secure revenue for
the State on certain classes of instruments: It is not enacted to arm
a litigant with a weapon of technicality to meet the case of his
opponent. The stringent provisions of the Act are conceived in the
interest of the revenue once that object is secured according to law,
the party staking his claim on the instrument will not be defeated on
the ground of the initial defect in the instrument. Viewed in that light
the scheme is clear.”
(emphasis supplied)
The Stamp Act is a legislation which is enacted in the interest of the
revenue. The statute must be interpreted with due regard to its purpose.
E*. The Arbitration and Conciliation Act 1996
61. Arbitration is a method of alternative dispute resolution where
parties agree to refer their disputes to a neutral third party known as an
arbitrator. The aim of arbitration is to provide speedy, eﬃcient, and binding
resolution of disputes that have arisen between the parties in regard to
their substantive obligations. The thrust of arbitration law is succinctly
encapsulated in Redfern and Hunter: “It is to be expeditious where the law
is slow, cheap where the law is costly, simple where the law is technical, a
peacemaker instead of a stirrer-up of strife.”52
62. Before the enactment of the Arbitration Act, the law on arbitration
was contained in the Arbitration Act 1940,53 the Arbitration (Protocol and
Convention) Act 1937, and Foreign Awards (Recognition and Enforcement)
Act 1961. In 1978, the Law Commission of India suggested substantial
amendments to the 1940 Act to make it more responsive to the contemporary
legal and economic requirements. In the meanwhile, the United Nations
Commission on International Trade Law54 adopted the Model Law in 1985 to
foster the development of a uniﬁed legal framework for the fair and eﬃcient
settlement of disputes arising in international commercial arbitration.

* Ed. Note: PART E
52 Redfern and Hunter on International Arbitration (7th edn, Oxford University Press,
2023) 3.
53 “1940 Act”
54 “UNCITRAL”
1126 SUPREME COURT REPORTS [2023] 15 S.C.R.

The General Assembly of the United Nations recommended to all states
to give due consideration to the Model Law in view of the desirability of
achieving uniformity of the law of arbitral procedure and the speciﬁc needs
of international commercial arbitration practice.55
63. The Arbitration Act was enacted to “consolidate and amend the
law relating to domestic arbitration, international commercial arbitration and
enforcement of foreign arbitral awards as also to deﬁne the law relating to
the conciliation and for matters connected therewith or incidental thereto.”
In the process, the Arbitration Act repealed the 1940 Act, the Arbitration
(Protocol and Convention) Act 1937, and the Foreign Awards (Recognition
and Enforcement) Act 1961. It also brought domestic as well as international
commercial arbitration in consonance with the Model Law, the New York
Convention, and the Geneva Convention. The Arbitration Act is divided
into four parts: (i) Part I deals with domestic and international arbitration
that takes place in India; (ii) Part II deals with the enforcement of foreign
arbitral awards under the New York Convention and the Geneva Convention;
(iii) Part III deals with conciliation; and (iv) Part IV contains supplementary
provisions. In the present reference, we are largely concerned with Part I
of the Arbitration Act. The important principles which animate the law
on arbitration as indeed the Arbitration Act are discussed in the following
segment. These principles act as important aids to interpret the Arbitration
Act.
i. Arbitral autonomy
64. In medieval England, recourse to arbitration was commonplace
among merchants and traders. During the seventeenth and the eighteenth
century, settlement of commercial disputes by arbitration was encouraged by
both Chancery and the courts.56 In light of the widespread use of arbitration,
coupled with a rapid decline in court litigation, the English courts began to
actively discourage arbitration as a dispute resolution mechanism.57 Judicial

55 General Assembly of the United Nations, ‘Model Law on International Commercial
Arbitration of the United Nations Commission on International Trade Law’ 40/72
112th Plenary Session, 11 December 1985.
56 Henry Horwitz and James Oldham, ‘John Locke, John Mansﬁeld, and Arbitration
during the Eighteenth Century’ (1993) 36(1) The Historical Journal 137, 139.
57 Earl Wolaver, ‘The Historical Background of Commercial Arbitration’ (1934) 83
University of Pennsylvania Law Review 132, 142.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1127
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

scepticism towards arbitration proceedings mainly stemmed from the attitude
of judges that “every activity that occurred within a jurisdiction should be
within the purview of state law and court.”58
65. As cross-border commerce and transactions proliferated, companies
and businesses sought diﬀerent ways to resolve their commercial disputes.
The formality, customs, and legal traditions of national courts were at
variance with the intention of the parties to achieve a speedy and eﬃcient
resolution of their disputes. The internationalization of trade and commerce
in the middle of the nineteenth century necessitated the regulation and
institutionalization of arbitration. In the process, arbitration was also
detached from the national legal systems, with the growth of arbitral
institutions such as the London Chamber of Arbitration and International
Chamber of Commerce. This new regime of arbitration law paved the way
for greater recognition of the mutual intention of parties and the authority
of arbitral tribunals to resolve disputes without being bogged down by the
intricacies of national legal systems. This was commended and reﬂected
in various international instruments such as the New York Convention and
the UNCITRAL Model Law. Accordingly, national laws were changed to
reﬂect the principle of judicial non-interference in arbitration proceedings.
The demands of commerce and business eﬃciency meant that control by
national courts became subordinate to the intention of the parties and the
authority of the arbitral tribunal.59
66. The principle of arbitral autonomy is an integral element of the
ever-evolving domain of arbitration law. Arbitral autonomy means that the
parties to an arbitration agreement can exercise their contractual freedom
to bestow the arbitral tribunal with the authority to decide disputes that may
arise between them. The basis of arbitral autonomy is to give eﬀect to the
true intention of parties to distance themselves from the “risk of domestic
judicial parochialism.”60

58 Julian D M Lew, ‘Achieving the Dream: Autonomous Arbitration’ (2006) 22(2)
Arbitration International 179, 183.
59 Ibid, at 185
60 Redfern and Hunter on International Arbitration (7th edn, Oxford University Press,
2023) 388
1128 SUPREME COURT REPORTS [2023] 15 S.C.R.

67. The principle of judicial non-interference reﬂects the autonomy of
arbitral tribunals. Arbitral tribunals are autonomous in the sense that they are
constituted to give eﬀect to the mutual intention of the parties to settle their
disputes through a neutral and expert authority of their choice. Moreover,
the competence of an arbitral tribunal to rule on its own jurisdiction,
including ruling on any objections with respect to the existence or validity
of the arbitration agreement, also indicates that the arbitral tribunal enjoys
suﬃcient autonomy from the national courts.
68. Section 9 of the Code of Civil Procedure 1908 provides that the
courts shall have jurisdiction to try all suits of a civil nature excepting suits
of which cognizance is either expressly or impliedly barred. Section 28 of
the Contract Act states that agreements that restrict a party to a contract
absolutely from enforcing their rights under or in respect of any contract by
way of usual legal proceedings are void. However, the provision expressly
saves contracts by which two or more persons agree to refer to arbitration
any dispute which may arise between them in respect of any subject or class
of subjects. By choosing to settle their disputes through arbitration, parties
surrender their right to litigate before the national courts in favour of the
arbitral tribunal. By surrendering their right to litigate in national courts,
parties also surrender their right to be bound by national procedural laws
in favour of expedition, informality, and eﬃciency of the arbitral process.
The arbitral tribunal is not subject to the procedural laws of a country. For
instance, Section 19 of the Arbitration Act expressly provides that the arbitral
tribunal shall not be bound by the Code of Civil Procedure 1908 or the Indian
Evidence Act 1872. Moreover, it stipulates that an arbitral tribunal may
conduct the proceedings in any manner it deems appropriate if the parties fail
to agree on the procedure to be followed by the tribunal. Although arbitral
tribunals have autonomy in the procedural and substantive sense, they are
not completely independent of the law of the country in which the arbitral
tribunal has its juridical seat, as discussed in the following segments.
ii. Principle of minimum judicial interference
69. The principle of judicial non-interference in arbitral proceedings
is fundamental to both domestic as well as international commercial
arbitration. The principle entails that the arbitral proceedings are carried
out pursuant to the agreement of the parties or under the direction of the
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1129
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

tribunal without unnecessary interference by the national courts. 61 This
principle serves to proscribe judicial interference in arbitral proceedings,
which would undermine the objective of the parties in agreeing to arbitrate
their disputes, their desire for less formal and more ﬂexible procedures,
and their desire for neutral and expert arbitral procedures. 62 The principle
of judicial non-interference in arbitral proceedings respects the autonomy
of the parties to determine the arbitral procedures. This principle has also
been incorporated in international instruments, including the New York
Convention63 and the Model Law.
70. Article 5 of the Model Law deals with the extent of court
intervention. It states that “[i]n matters governed by this Law, no court shall
intervene except where so provided in this Law.” The drafters of the Model
Law deemed it important to incorporate this article to provide “certainty to
the parties and the arbitrators about the instances in which court supervision
or assistance was to be expected.”64 By including the introductory words “in
matters governed by this law”, the scope of the provision was limited only to
matters which were governed by or regulated in the Model Law. The purpose
was to ensure that no judicial authority assigns to itself the power that has
been expressly and exclusively bestowed upon the arbitral tribunal. For
instance, Article 16 of the Model Law confers upon the arbitral tribunal an
exclusive power to rule on its jurisdiction including dealing with objections
pertaining to the existence and validity of an arbitration agreement.
71. The Model Law does not regulate or govern all matters related
to international commercial arbitration as well as the arbitral process.65
Similarly, Article 5 does not bar the national courts from intervening in

61 Gary Born, The Principle of Judicial Non-Interference in International Arbitration
Proceedings’ (2009) 30 University of Pennsylvania Journal of International Law 999,
1002.
62 Gary Born, International Arbitration Law and Practice (3rd ed, 2021) 2361
63 Article II(3), New York Convention
64 Report of the Working Group on International Contract Practices on the work of its
seventh session, A/CN.9/246 (New York, 23 January-3 February 1984) 45.
65 Manuel A Gomez, ‘Article 5: Extent of Court Intervention’ in Ilias Bantekas (eds)
UNCITRAL Model Law on International Commercial Arbitration: A Commentary 89
(2020)
1130 SUPREME COURT REPORTS [2023] 15 S.C.R.

matters not governed by the Model Law.66 The UNCITRAL Working Group
itself identiﬁed certain situations not dealt with under the Model Law where
the national courts could intervene:
“Article 5 would, for example, not exclude court control or assistance
in those matters which the Working Group had decided not to deal with
in the law (e.g., capacity of parties to conclude arbitration agreement;
impact of state immunity; competence of arbitral tribunal to adapt
contracts; enforcement by courts of interim measures of protection
ordered by arbitral tribunal; ﬁxing of fees or request for deposit,
including security for fees or costs; time-limit for enforcement of
awards).”
72. This indicates that Article 5 of the Model Law emphasizes on
arbitral tribunal being the ﬁrst instance to determine all issues relating to
matters of law or construction as well as issues of jurisdiction and scope
of authority.67 It exclusively determines the manner and form of judicial
intervention in the arbitration process. National courts can intervene with
respect to matters not expressly governed by the Model Law. 68
73. Section 5 of the Arbitration Act is based on Article 5 of the Model
Law. However, Section 5 also incorporates a non-obstante clause setting
out the scope of judicial intervention. It reads as follows:
“5. Extent of judicial intervention.- Notwithstanding anything
contained in any other law for the time being in force, in matters
governed by this Part, no judicial authority shall intervene except
where so provided in this Part.”
Two aspects become clear from a comparison of Section 5 of the
Arbitration Act with Article 5 of the Model Law: ﬁrst, Section 5 begins
with a non-obstante clause unlike Article 5; and second, it limits the scope
of judicial intervention to the extent “so provided” in Part I.

66 Digest of Case Law on the Model Law on International Commercial Arbitration (2012)
21
67 Rio Algam v. Sammi Steel Co., Ontario Court of Justice, Canada, 1 March 1991,
[1991] O.J. No. 268
68 Richard Garnett, ‘Article 5 of the Model Law: Protector of the Arbitral Process?’
(2021) 38(2) Journal of International Arbitration 127-146.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1131
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

74. One of the main objectives of the Arbitration Act is to minimize
the supervisory role of courts in the arbitral process. Party autonomy and
settlement of disputes by an arbitral tribunal are the hallmarks of arbitration
law. Section 5 gives eﬀect to the true intention of the parties to have their
disputes resolved through arbitration in a quick, eﬃcient, and eﬀective
manner by minimizing judicial interference in the arbitral proceedings.69
Parliament enacted Section 5 to minimize the supervisory role of courts
in the arbitral process to the bare minimum, and only to the extent “so
provided” under the Part I of Arbitration Act. In doing so, the legislature
did not altogether exclude the role of courts or judicial authorities in arbitral
proceedings, but limited it to circumstances where the support of judicial
authorities is required for the successful implementation and enforcement
of the arbitral process.70 The Arbitration Act envisages the role of courts to
“support arbitration process”71 by providing necessary aid and assistance
when required by law in certain situations.
75. Section 5 begins with the expression “notwithstanding anything
contained in any other law for the time being in force.” The non-obstante
clause is Parliament’s addition to the Article 5 of the Model Law. It is of
a wide amplitude and sets forth the legislative intent of limiting judicial
intervention during the arbitral process. In the context of Section 5, this
means that the provisions contained in Part I of the Arbitration Act ought to
be given full eﬀect and operation irrespective of any other law for the time
being in force. It is now an established proposition of law that the legislature
uses non-obstante clauses to remove all obstructions which might arise out
of the provisions of any other law, which stand in the way of the operation
of the legislation which incorporates the non-obstante clause. 72
76. A non-obstante clause is appended in a provision to give
such provision overriding eﬀect over other provisions of the law.73 In

69 Food Corporation of India v. Indian Council of Arbitration, (2003) 6 SCC 564
70 Union of India v. Popular Construction Co., (2001) 8 SCC 470; P Anand Gajapathi
Raju v. P.V.G. Raju, (2000) 4 SCC 539
71 Swiss Timing Ltd. v. Commonwealth Games 2010 Organising Committee, (2014)
6 SCC 677
72 State of Bihar v. Bihar Rajya M.S.E.S.K.K. Mahasangh, (2005) 9 SCC 129
73 Owners and Parties Interested in the Vessel M.V. Polaris Galaxy v. Banque
Cantonale De Geneva, 2022 SCC OnLine SC 1293
1132 SUPREME COURT REPORTS [2023] 15 S.C.R.

Chandavarkar Sita Ratna Rao v. Ashalata S. Guram,74 Justice Sabyasachi
Mukharji explained the purport of non-obstante clause in the following
terms:
“67. A clause beginning with the expression “notwithstanding anything
contained in this Act or in some particular provision in the Act or in
some particular Act or in any law for the time being in force, or in any
contract” is more often than not appended to a section in the beginning
with a view to give the enacting part of the section in case of conﬂict an
overriding eﬀect over the provision of the act or the contract mentioned
in the non obstante clause. It is equivalent to saying that in spite of the
provisions of the Act or any other Act mentioned in the non obstante
clause or any contract or document mentioned the enactment following
it will have its full operation or that the provisions embraced in the
non obstante clause would not be an impediment for an operation of
the enactment.”
77. Although a non-obstante clause must be allowed to operate with
full vigour, its eﬀect is limited to the extent intended by the legislature. In
ICICI Bank Ltd v. SIDCO Leathers Ltd,75 a two-Judge Bench of this Court
held that a non-obstante clause must be interpreted by conﬁning it to the
legislative policy. Thus, even if a non-obstante clause has wide amplitude,
the extent of its impact has to be measured in view of the legislative intention
and legislative policy.76 In view of this settled legal position, the issue that
arises for our consideration is the scope of the non-obstante clause contained
in Section 5 of the Arbitration Act.
78. In Morgan Securities & Credit (P) Ltd. v. Modi Rubber Ltd.,77
the issue before the two-Judge Bench was whether the provisions of the
Arbitration Act would prevail over the provisions of the Sick Industrial
Companies (Special Provisions) Act, 1985.78 While noting the non-obstante
clause contained in Section 5 of the Arbitration Act, this Court held that the
non-obstante clause has “limited application aiming at the extent of judicial

74 (1986) 4 SCC 447
75 (2006) 10 SCC 452
76 JIK Industries Ltd. v. Amarlal V. Jumani, (2012) 3 SCC 255
77 (2006) 12 SCC 642
78 “SICA”
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1133
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

intervention.” It was held that the Arbitration Act would not prevail over
SICA since the latter enactment seeks to “achieve a higher goal.” In other
words, the scope of the non-obstante clause is limited to prohibiting the
intervention of judicial authorities, unless it has been expressly provided
for under Part I of the Arbitration Act.
79. Similar to Article 5 of the Model Law, Section 5 uses the expression
“in matters governed by this Part.” The use of this expression circumscribes
the scope of judicial intervention to matters expressly governed by Part I
of the Arbitration Act. The matters governed by Part I inter alia include (i)
Section 8 which mandates judicial authorities to refer parties to arbitration
when prima facie there is a valid arbitration agreement; (ii) Section 9 which
allows courts to issue interim measures on an application made by a party
to an arbitration agreement; (iii) Section 11 which empowers the Supreme
Court or the High Courts to appoint arbitrators on an application made by
parties to an arbitration agreement; (iv) Section 27 which allows the arbitral
tribunal to request the court for assistance in taking evidence; and (v) Section
34 which empowers the court to set aside an arbitral award on the basis of
the limited grounds mentioned therein.
80. Section 5 has two facets – positive and negative. The positive
facet vests judicial authorities with jurisdiction over arbitral proceedings
in matters expressly allowed in or dealt with under Part I of the Arbitration
Act. The ﬂip side to this approach is that judicial authorities are prohibited
from intervening in arbitral proceedings in situations where the arbitral
tribunal has been bestowed with exclusive jurisdiction. This is the negative
facet of Section 5. The non-obstante clause limits the extent of judicial
intervention in respect of matters expressly provided under the Arbitration
Act.79 In Bhaven Construction v. Sardar Sarovar Narmada Nigam
Ltd,80 a Bench of three Judges of this Court observed that the “non-
obstante clause is provided to uphold the intention of the legislature as
provided in the Preamble to adopt UNCITRAL Model Law and Rules, to
reduce excessive judicial interference which is not contemplated under
the Arbitration Act.”

79 Secur Industries Ltd v. Godrej & Boyce Mfg. Co. Ltd, (2004) 3 SCC 447
80 (2022) 1 SCC 75
1134 SUPREME COURT REPORTS [2023] 15 S.C.R.

81. One of the main objectives behind the enactment of the Arbitration
Act was to minimize the supervisory role of courts in the arbitral process
by conﬁning it only to the circumstances stipulated by the legislature. For
instance, Section 16 of the Arbitration Act provides that the arbitral tribunal
may rule on its own jurisdiction “including ruling on any objection with
respect to the existence or validity of the arbitration agreement.” The eﬀect
of Section 16, bearing in view the principle of minimum judicial interference,
is that judicial authorities cannot intervene in matters dealing with the
jurisdiction of the arbitral tribunal. Although Sections 8 and 11 allow courts
to refer parties to arbitration or appoint arbitrators, Section 5 limits the
courts from dealing with substantive objections pertaining to the existence
and validity of arbitration agreements at the referral or appointment stage.
A referral court at Section 8 or Section 11 stage can only enter into a prima
facie determination. The legislative mandate of prima facie determination
ensures that the referral courts do not trammel the arbitral tribunal’s authority
to rule on its own jurisdiction.
82. Section 5 is of aid in interpreting the extent of judicial interference
under Sections 8 and 11 of the Arbitration Act. Section 5 contains a
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.
iii. The Arbitration Act is a self-contained code
83. In Girnar Traders v. State of Maharashtra,81 a Constitution
Bench of this Court observed that a self-contained code is a complete
legislation with regard to the purpose for which it is enacted. Such a self-
contained code provides for a complete machinery to deal with the purpose
sought to be achieved by that law and its dependence on other legislations
is either absent or minimal.
84. A two-Judge Bench of this Court, in Fuerst Day Lawson Ltd.
v. Jindal Exports Ltd,82 explained the nature of the Arbitration Act in the
following terms:

81 (2011) 3 SCC 1
82 (2011) 8 SCC 333
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1135
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

“89. It is, thus, to be seen that Arbitration Act, 1940, from its inception
and right through to 2004 (in P.S. Sathappan [(2004) 11 SCC 672]) was
held to be a self-contained code. Now, if the Arbitration Act, 1940 was
held to be a self-contained code, on matters pertaining to arbitration,
the Arbitration and Conciliation Act, 1996, which consolidates, amends
and designs the law relating to arbitration to bring it, as much as
possible, in harmony with the Uncitral Model must be held only to be
more so. Once it is held that the Arbitration Act is a self-contained code
and exhaustive, then it must also be held, using the lucid expression of
Tulzapurkar, J., that it carries with it “a negative import that only such
acts as are mentioned in the Act are permissible to be done and acts or
things not mentioned therein are not permissible to be done”. In other
words, a letters patent appeal would be excluded by the application of
one of the general principles that where the special Act sets out a self-
contained code the applicability of the general law procedure would
be impliedly excluded.”
85. The Arbitration Act is a self-contained code inter alia with respect
to matters dealing with appointment of arbitrators, commencement of
arbitration, making of an award and challenges to the arbitral award, as
well as execution of such awards.83 When a self-contained code sets out a
procedure, the applicability of a general legal procedure would be impliedly
excluded.84 Being a self-contained and exhaustive code on arbitration
law, the Arbitration Act carries the imperative that what is permissible
under the law ought to be performed only in the manner indicated, and
not otherwise. Accordingly, matters governed by the Arbitration Act such
as the arbitration agreement, appointment of arbitrators and competence
of the arbitral tribunal to rule on its jurisdiction have to be assessed in the
manner speciﬁed under the law. The corollary is that it is not permissible to
do what is not mentioned under the Arbitration Act. Therefore, provisions
of other statutes cannot interfere with the working of the Arbitration Act,
unless speciﬁed otherwise.

83 Pasl Wind Solutions (P) Ltd v. GE Power Conversion (India) (P) Ltd., (2021) 7
SCC 1; Kandla Export Corporation v. OCI Corporation, (2018) 14 SCC 715
84 Subal Paul v. Malina Paul, (2003) 10 SCC 361
1136 SUPREME COURT REPORTS [2023] 15 S.C.R.

iv. Principles of modern arbitration
86. The Stamp Act and the Indian Arbitration Act, 1899 came into force
on the same day, that is, 1 July 1899. The Arbitration Act, 1899, which was
enacted more than a century ago, did not have minimum judicial interference
as its avowed object. However, the law on arbitration has undergone a sea
change over the course of a century.
87. The Arbitration Act represents the principles of modern arbitration,
which seeks to give eﬀect to the mutual intention of the parties to resolve their
disputes by a neutral third-party arbitral tribunal, whose decision is ﬁnal and
binding on all the parties. Arbitration law allows the parties to design arbitral
procedures, which ensures eﬃciency and expediency of the arbitration
process. One of the reasons that business and commercial entities prefer
arbitration is because it obviates cumbersome judicial processes, which can
often prove expensive, complex, and interminable. Most legal jurisdictions
have also recognized and adopted legal approaches that favor arbitration
at both the domestic and international level. In the process, national courts
have given eﬀect to principles such as the separability presumption and
jurisdictional competence of the arbitral tribunal. Modern arbitration law
does not completely restrict the role of national courts in the arbitration
process, but gives priority to the arbitral tribunal to decide on disputes and
issues pertaining to arbitration agreements as well as the substantive rights
of the parties. The Arbitration Act reﬂects these aspects of modern arbitration
law. It is the duty of this Court to interpret the Arbitration Act in a manner
which gives life to the principles of modern arbitration in India.
F*. The law on the arbitration agreement
88. An arbitration agreement is the foundation of arbitration as it
records the consent of the parties to submit their disputes to arbitration. 85
In Bihar State Mineral Development Corporation v. Encon Builders,86
this Court enlisted the essential elements of an arbitration agreement as
follows:

* Ed. Note: PART F
85 Redfern and Hunter on International Arbitration (7th edn, Oxford University Press,
2023) 49
86 (2003) 7 SCC 418
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1137
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

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.
89. Section 2(b) of the Arbitration Act defines an “arbitration
agreement” to mean an agreement referred to in Section 7. Section 7 deﬁnes
an “arbitration agreement” to mean an agreement by the parties to submit
to arbitration all or certain disputes which have arisen or which may arise
between them in respect of a deﬁned legal relationship, whether contractual
or not. It provides that an arbitration agreement could be in the form of
an arbitration clause in a contract or in the form of a separate agreement.
Further, Section 7 mandates that an arbitration agreement shall be in
writing. According to Section 7(4), an arbitration agreement is in writing
if it is contained in: (a) a document signed by the parties; (b) an exchange
of letters, telex, telegrams or other means of telecommunication including
communication through electronic means which provide a record of the
agreement; or (c) an exchange of statements of claim and defence in which
the existence of the agreement is alleged by one party and not denied by
the other. Section 7(5) provides that a reference in a contract to a document
containing an arbitration clause constitutes an arbitration agreement if the
contract is in writing and the reference is such as to make that arbitration
clause part of the contract.
i. Separability of the arbitration agreement
90. The concept of separability or severability of an arbitration
agreement from the underlying contract is a legal ﬁction which acknowledges
the separate nature of an arbitration agreement. The separate nature of the
arbitration agreement from the underlying contract is one of the cornerstones
of arbitration law. As Redfern and Hunter explain, an arbitration agreement is
juridically independent from the underlying contract in which it is contained.87

87 Redfern and Hunter on International Arbitration (7th edn, Oxford University Press,
2023) 81
1138 SUPREME COURT REPORTS [2023] 15 S.C.R.

The concept of separability reﬂects the presumptive intention of the parties
to distinguish the underlying contract, which captures the substantive rights
and obligations of the parties, from an arbitration agreement which provides
a procedural framework to resolve the disputes arising out of the underlying
contract. This presumption has various consequences in theory and practice,
the most important being that an arbitration agreement survives the invalidity
or termination of the underlying contract.
91. Schwebel, Sobota and Manton explain in a book on International
Arbitration that the separability presumption88 is based on four factors:
ﬁrst, the intention of the parties to require arbitration of any dispute arising
between them, including disputes over the validity of the contract; second,
preventing an unwilling party from avoiding its earlier commitment by
alleging the invalidity of the underlying contract; third, since the arbitration
agreement and the underlying contract are considered as two separate
agreements, the insuﬃciency in fulﬁlling formalities in the underlying
contract would not result in the invalidity of the arbitration agreement; and
fourth, if the separability presumption is discarded, courts will have to rule
on the merits of the disputes instead of the arbitral tribunals.
92. The rationale for the separability presumption lies in the contractual
freedom of the parties to an arbitration agreement to settle their disputes by
proceedings before an arbitral tribunal to the exclusion of courts. According
to the common grain of business understanding and expectation, the parties
intend all their disputes over substantive rights and obligations under the
underlying contract to be resolved by the arbitral tribunal.89 Therefore, the
separability presumption ensures that an arbitration agreement survives a
termination, repudiation, or frustration of a contract to give eﬀect to the
true intention of the parties and ensure sanctity of the arbitral proceedings.
93. Switzerland was one of the ﬁrst jurisdictions to recognize the
separability presumption. In a decision rendered by the Swiss Federal
Tribunal in 1933, it was observed that “[e]ven where the arbitration clause is
contained in the same document as the substantive contract to which it relates

88 Stephen Schwebel, Luke Sobota, and Ryan Manton, International Arbitration: Three
Salient Problems (Cambridge University Press, 2nd edn, 2020) 4.
89 Mulheim Pipecoatings GmbH v. Welspun Fintrade Ltd., 2013 SCC OnLine Bom
1048
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1139
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

and therefore from the outside appears as a part of the main agreement,
it still does not constitute a single provision of the main agreement but an
independent agreement of a special nature.”90 However, Gary Born points
out that although an arbitration agreement could be separated from the
underlying contract, it can never be independent or autonomous from such
contract.91 This is largely due to the fact that in certain situations, the defects
in the underlying contract could also invalidate the arbitration agreement.
94. To properly understand the contours of the separability presumption,
it is necessary to understand its origin and development in the international
context. Such an analysis is important because any ruling by this Court on
the separability presumption ought to be with the aid of international best
practices.
d. United Kingdom
95. The separability presumption developed gradually in English law
starting with the decision of the House of Lords in Heyman v. Darwins.92
The issue before the House of Lords was whether an arbitration agreement
contained in an underlying contract could survive the termination of such
contract for a repudiatory breach. It was held that an arbitration agreement
is collateral to the substantive contract and could survive its termination.
Lord Macmillan observed that an arbitration agreement is materially diﬀerent
from other ordinary contracts, the reason being that breach of obligations
under ordinary contracts cannot (in general) be speciﬁcally enforced and
breach of them results only in damages, but an arbitration agreement can
be speciﬁcally enforced by the machinery of the arbitration Acts. Lord
Macmillan concluded that repudiation or breach of a contract does not
extinguish the arbitration agreement, because it survives for the purpose of
resolving the outstanding claims arising out of the breach:
“I am, accordingly, of the opinion that what is commonly called
repudiation or total breach of a contract, whether acquiesced in by
the other party or not, does not abrogate the contract, though it may

90 Judgment of 7 October 1933, Tobler v. Justizkommission des Kantons Schwyz, DFT
59 | 177 (1933)
91 Gary Born (n 62) 377
92 [1942] AC 356
1140 SUPREME COURT REPORTS [2023] 15 S.C.R.

relieve the injured party of the duty of further fulﬁlling the obligations
which he has by the contract undertaken to the repudiating party. The
contract is not put out of existence, though all further performance of
the obligations undertaken by each party in favour of the other may
cease. It survives for the purpose of measuring the claims arising out
of the breach, and the arbitration clause survives for determining the
mode of their settlement. The purposes of the contract have failed,
but the arbitration clause is not one of the purposes of the contract.”
96. In subsequent decisions, the English courts reiterated the
separability presumption. In Harbour Assurance Co. (U.K.) Ltd. v. Kansa
General International Insurance Co. Ltd.93, the Court of Appeal held
that an arbitration agreement is “a self-contained contract collateral to the
containing contract.” The separability presumption is also enshrined in
Section 7 of the UK Arbitration Act 199694 in the following terms:
“Unless otherwise agreed by the parties, an arbitration agreement
which forms or was intended to form part of another agreement
(whether or not in writing) shall not be regarded as invalid, non-existent
or ineﬀective because that other agreement is invalid, or did not come
into existence or has become ineﬀective, and it shall for that purpose
be treated as a distinct agreement.”
97. Chitty on Contracts states that Section 7 of the UK Arbitration Act
maintains the established common law principle which treats an arbitration
agreement as distinct from the contract of which it forms part.95 According
to Chitty, treating an arbitration agreement distinct and separate from the
underlying contract has two consequences: ﬁrst, an arbitration agreement
can be void or voidable only on the grounds which directly relate to it; and
second, if the arbitration agreement is valid and binding and is suﬃciently
wide in its terms, issues relating to the validity, existence, or eﬀectiveness
of the underlying contract are within the substantive jurisdiction of the
arbitral tribunal.96

93 [1993] Q.B. 701
94 “UKG Arbitration Act”
95 Chitty on Contracts, Hugh Beale (ed), (32nd edn, Sweet and Maxwell, 2015) para 32-
028
96 ibid
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1141
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STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

98. In Premium Nafta Products Limited v. Fili Shipping Co. Ltd.,97
the House of Lords further explained the separability presumption in Section
7 of the UK Arbitration Act. In that case, the issue was whether a party was
bound by an arbitration agreement contained in an underlying contract which
was allegedly procured by fraud and bribery. Lord Hoﬀman, writing for the
House of Lords, held that it could be enforced in view of the separability
presumption. The Law Lord held that an arbitration agreement in terms
of Section 7 of the UK Arbitration Act is a “distinct agreement” from the
underlying contract and, therefore, can be void or voidable only on grounds
which relate directly to the arbitration agreement. Lord Hoﬀman, built on
his past decision in Harbour Assurance (supra), by holding that Section 7
protects an arbitration agreement from any indirect challenge.
e. United States of America
99. The US Federal Arbitration Act presupposes that an arbitration
agreement can be separate and distinct from the underlying contract. 98 The
separability presumption was subsequently reiterated by US courts with
respect to both international and domestic arbitration. In Prima Paint
Corporation v. Flood & Conklin Mfg. Co.,99 the Supreme Court of the
United States aﬃrmed the separability presumption by observing that
“arbitration clauses as a matter of federal law are ‘separable’ from the
contracts in which they are embedded.” In reaching this conclusion, the
court emphasized upon the presumptive desire of the parties to insulate
the arbitration agreement from challenges directed at the underlying
contract. The position of law which was laid down in Prima Paint (supra)
was reiterated by the Supreme Court of the United States in Buckeye
Check Cashing Inc v. Cardegna100 and Rent-A-Center, West, Inc. v.
Jackson.101 In Rent-A-Center (supra), it was held that application of
the severability rule does not depend on the substance of the remainder
of the contract.

97 [2007] UKHL 40
98 Gary Born (n 62) 382
99 388 US 395 (1967)
100 546 U.S. 440, 440 (2006)
101 2 561 U.S. 63 (2010)
1142 SUPREME COURT REPORTS [2023] 15 S.C.R.

f. Singapore
100. The doctrine of separability has been statutorily recognized
under the domestic arbitration regime in Singapore through Section 21
of the Singaporean Arbitration Act, 2001.102 The provision is that “an
arbitration clause which forms part of a contract shall be treated as an
agreement independent of the other terms of the contract.” The separability
presumption has been further explained by the Singapore High Court in BNA
v. BNB. The High Court observed that the “parties intend their arbitration
agreement to remain eﬀective if a provision of the substantive contract into
which it is integrated could, in certain circumstances of fact or law, operate
to render their arbitration agreement invalid.”103 Thus, the Singapore High
Court held that the purpose of the separability presumption is to insulate
an arbitration agreement from invalidity that may arise from a challenge to
the substantive contract.
g. International Conventions
101. The New York Convention does not expressly provide for the
separability presumption. Article II of the Convention deﬁnes an arbitration
agreement as including “an arbitral clause in a contract or an arbitration
agreement, signed by the parties or contained in an exchange of letters or
telegrams.” Moreover, Article V(1)(a) provides that the recognition and
enforcement of an arbitral award may be refused where the arbitration
agreement “is not valid under the law to which the parties have subjected
it or, failing any indication thereon, under the law of the country where the
award was made.” The provision rests on the premise that international
arbitration agreements could be subjected to diﬀerent national laws and legal
rules than the underlying contract, and, therefore, an arbitration agreement
is presumptively separate from the underlying contract. According to Gary
Born, Article II and Article V(1)(a) of the New York Convention indicate
that the Convention treats an arbitration agreement as being diﬀerent from
the underlying contract.104

102 Arbitration Act 2001 (No. 37 of 2001)
103 [2019] SGHC 142
104 Gary Born (n 62) 378
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1143
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

102. Article 16 of the Model Law deals with the competence of an
arbitral tribunal to rule on its own jurisdiction. Article 16(1) provides:
“The arbitral tribunal may rule on its own jurisdiction, including any
objections with respect to the existence or validity of the arbitration
agreement. For that purpose, an arbitration clause which forms
part of a contract shall be treated as an agreement independent of
the other terms of the contract. A decision by the arbitral tribunal
that the contract is null and void shall entail ipso jure the invalidity
of the arbitration clause.”
(emphasis supplied)
103. Rule 23 of the UNCITRAL Arbitration Rules, 2021 also provides
that “an arbitration clause that forms part of a contract shall be treated as
an agreement independent of the other terms of the contract.” In contrast
to the New York Convention, the Model Law expressly recognizes the
separability presumption.
104. According to the UNCITRAL Working Group, the separability
presumption is incorporated under Article 16(1) to complement the
principle of competence-competence. The separability presumption further
ensures that the invalidity of the underlying contract does not aﬀect the
jurisdiction of the arbitral tribunal to decide on the nullity of the contract
or any other issues submitted to its jurisdiction by the parties “unless it
ﬁnds that the defect which causes the nullity of the contract aﬀects also the
arbitration clause itself.”105 The last sentence of Article 16(1) (extracted
above) states the general principle of contractual validity of arbitration
clauses.106 It connotes that the invalidity of the underlying contract will
not necessarily entail the invalidity of an arbitration agreement contained
in the contract. Accordingly, the arbitral tribunal’s jurisdiction will be
aﬀected only when the defect causing invalidity is directed at the arbitration
agreement.107

105 Analytical Commentary on Draft Text of a Model Law on International Commercial
Arbitration, A/CN.9/264 (25 March 1985) 38.
106 Gary Born (n 62) 403
107 Digest of Case Law on the Model Law on International Commercial Arbitration (2012)
76.
1144 SUPREME COURT REPORTS [2023] 15 S.C.R.

h. India
105. The Arbitration Act also incorporates the separability presumption
in Section 16(1) along the lines of the Model Law. Section 16(1) reads as
follows:
“16. Competence of arbitral tribunal to rule on its jurisdiction – (1) The
arbitral tribunal may rule on its own jurisdiction, including ruling on
any objections with respect to the existence or validity of the arbitration
agreement, and for that purpose, -
(a) an arbitration agreement which forms part of a contract shall be
treated as an agreement independent of the other terms of the contract;
and
(b) a decision by the arbitral tribunal that the contract is null and void
shall not entail ipso jure the invalidity of the arbitration clause.”
106. The separability presumption, as incorporated under Article
16(1) of the Model Law, as well as Section 16 of the Arbitration Act, is
qualiﬁed by the expression “for that purpose.” A plain reading may suggest
that Section 16 has incorporated the separability presumption only for the
particular purpose of allocation of competence over jurisdictional disputes.
However, the Digest of Case Laws on UNCITRAL Model Law states that
“the language used in the second sentence does not prevent the application of
the separability presumption when a jurisdictional question is raised before
a court.”108 Gary Born suggests that the better view is that the separability
presumption contained in Article 16(1) states a general rule of contractual
validity “which is applicable for all purposes.”109 The judicial view that
emerges from the Indian courts also seems to suggest that an arbitration
agreement is treated as distinct and separate from the underlying contract
as a general rule of substantive validity.
107. The separability presumption has undergone a significant
evolution in India. Initially, the Indian courts viewed an arbitration agreement
as an integral part of the underlying contract without any existence beyond

108 Ibid.
109 Gary Born (n 62) 403
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1145
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STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

such contract. For instance, in Union of India v. Kishorilal Gupta,110 the
issue before this Court was whether an arbitration clause in the original
contract survived after the enactment of a subsequent contract. Justice K
Subba Rao (as the learned Chief Justice then was) considered Heyman
(supra) but distinguished it on the ground that it only dealt with repudiation,
where rights and obligations of parties survive the termination of contract.
It was held that in situations where the original contract is superseded by a
subsequent contract, the arbitration clause in the original contract will also
cease to exist. Justice K Subba Rao, speaking for the majority, held that ﬁrst,
an arbitration clause is a collateral term of a contract as distinguished from
its substantive terms, but nonetheless it is an integral part of it; second, the
existence of the underlying contract is a necessary condition for the operation
of an arbitration clause; third, if the underlying contract was non-est in the
sense that it never came legally into existence or was void-ab-initio, the
arbitration clause also cannot operate; fourth, if the parties put an end to a
validly executed contract and substitute it with a new contract, the arbitration
clause of the original contract also perishes with it; and ﬁfth, in situations
such as repudiation, frustration, or breach of contract, only the performance
of the contract comes to an end, the arbitration clause persists because the
contract continues to exist for the purposes of disputes arising under it.
108. In Damodar Valley Corporation v. K K Kar,111 a two-Judge
Bench of this Court held that the plea that a contract is void, illegal, or
fraudulent aﬀects the entire contract along with the arbitration clause.
However, the enactment of the Arbitration Act in 1996 enabled the Indian
courts to give eﬀect to the separability presumption with greater impetus.
Section 16(1)(b), which provides that a decision by the arbitral tribunal that
the contract is null and void shall not entail ipso jure the invalidity of the
arbitration clause, renders the decisions in Kishorilal Gupta (supra) and
Damodar Valley Corporation (supra) redundant. Consequently, even if
the underlying contract is declared null and void, it will not ipso jure result
in the invalidity of the arbitration agreement.

110 1959 SCC OnLine SC 6
111 (1974) 1 SCC 141
1146 SUPREME COURT REPORTS [2023] 15 S.C.R.

109. In Firm Ashok Traders v. Gurumukh Das Saluja,112 the
issue before this Court was whether an application under Section 9 of the
Arbitration Act moved by a partner of a non-registered ﬁrm or by a person
not shown as a partner in the Register of Firms was maintainable in view of
Section 69(3) of the Indian Partnership Act, 1932. Section 69(3) creates a
bar against the institution of a suit to enforce a right arising from a contract
unless the ﬁrm is registered and the person suing is or has been shown in
the Register of Firms as partner. This Court considered the overall scheme
of the Arbitration Act to hold that an “arbitration clause is separable from
the other clauses of the partnership deed” and “constitutes an agreement
by itself.”
110. In National Agricultural Coop. Marketing Federation India
Ltd. v. Gains Trading Co.,113 the issue before this Court in an application
under Section 11 was whether an arbitration clause comes to an end if the
contract containing such clause is repudiated. While answering this in
negative, this Court observed that even if the underlying contract comes to
an end, the arbitration agreement contained in such contract survives for
the purpose of the resolution of disputes between the parties. Similarly, in P
Manohar Reddy & Bros. v. Maharashtra Krishna Valley Development
Corp.,114 this Court referred to Buckeye Check Cashing Inc. (supra) to
observe that an arbitration agreement contained in an underlying contract
is a collateral term which may survive the termination of the contract.
111. In Magma Leasing & Finance Ltd. v. Potluri Madhavilata,115
this Court cited Heyman (supra) with approval to hold that the termination of
the underlying contract does not render an arbitration agreement inoperative.
It was further observed that the arbitration agreement survives for the
purpose of resolution of disputes arising “in respect of”, “with regard to”,
or “under” the underlying contract. The emphasis on the expressions “in
respect of”, “with regard to” or “under” in Magma Leasing & Finance Ltd.
(supra) indicates that the purpose of an arbitration agreement is to embody
the mutual intention of the parties to settle any disputes that may arise “in

112 (2004) 3 SCC 155
113 (2007) 5 SCC 692
114 (2009) 2 SCC 494
115 (2009) 10 SCC 103
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1147
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

respect of” the substantive obligations under the underlying contract. It is,
therefore, a logical conclusion that the parties mutually intend to make an
arbitration agreement distinct and separate from the underlying contract,
so that even if the underlying contract comes to an end, the arbitration
agreement survives to resolve any outstanding disputes that may arise out
the substantive obligations under the contract.
112. In view of the above discussion, we formulate our conclusions
on this aspect. First, the separability presumption contained in Section
16 is applicable not only for the purpose of determining the jurisdiction
of the arbitral tribunal. It encapsulates the general rule on the substantive
independence of an arbitration agreement. Second, parties to an arbitration
agreement mutually intend to confer jurisdiction on the arbitral tribunal to
determine questions as to jurisdiction as well as substantive contractual
disputes between them. The separability presumption gives effect to
this by ensuring the validity of an arbitration agreement contained in an
underlying contract, notwithstanding the invalidity, illegality, or termination
of such contract. Third, when the parties append their signatures to a
contract containing an arbitration agreement, they are regarded in eﬀect as
independently appending their signatures to the arbitration agreement. The
reason is that the parties intend to treat an arbitration agreement contained in
an underlying contract as distinct from the other terms of the contract; and
Fourth, the validity of an arbitration agreement, in the face of the invalidity
of the underlying contract, allows the arbitral tribunal to assume jurisdiction
and decide on its own jurisdiction by determining the existence and validity
of the arbitration agreement. In the process, the separability presumption
gives eﬀect to the doctrine of competence-competence.
113. In view of the legal position, we now proceed to analyze the
correctness of the decision in N N Global 2 (supra). The Constitution Bench
acknowledged the separability presumption, but refused to apply it in the
context of Sections 33 and 35 of the Stamp Act. The relevant observation
of the Court is as follows:
“157. […] The evolution of the principle that an arbitration is a separate
and distinct agreement from the contract, would indicate that it would
have no play in the context of the duty of a Court, within the meaning of
Sections 33 and 35 of the Stamp Act, to act in consonance therewith.”
1148 SUPREME COURT REPORTS [2023] 15 S.C.R.

114. The above position of law is contrary to the separability
presumption which treats an arbitration agreement as separate from the
underlying contract.
G*. The doctrine of competence-competence
115. The doctrine of kompetenz-kompetenz (also known as
competence-competence), as originally developed in Germany, was
traditionally understood to imply that arbitrators are empowered to make a
ﬁnal ruling on their own jurisdiction, with no subsequent judicial review of
the decision by any court.116 However, many jurisdictions allow an arbitral
tribunal to render a decision on its jurisdiction, subject to substantive judicial
review.117
116. It is a well-recognized principle of public international law that a
legal authority possessing adjudicatory powers has the right to decide its own
jurisdiction.118 Similarly, it is a general rule of international arbitration law
that an arbitral tribunal has the power to determine its own jurisdiction. The
ability of an arbitral tribunal to determine its own jurisdiction is an important
facet of arbitration jurisprudence because it gives eﬀect to the separability
presumption. The separability presumption insulates the arbitration
agreement from the defects of the underlying contract, and thereby ensures
the sustenance of the tribunal’s jurisdiction over the substantive rights and
obligations of the parties under the underlying contract even after such a
contract is put to an end. The doctrine of competence-competence allows
the tribunal to decide on all substantive issues arising out of the underlying
contract, including the existence and validity of the arbitration agreement.
i. Comparative analysis
117. The doctrine of competence-competence is now a part of all
major jurisdictions. Section 30 of the UK Arbitration Act provides that the
arbitral tribunal may rule on its own substantive jurisdiction with respect
to: ﬁrst, whether there is a valid arbitration agreement; second, whether the

* Ed. Note: PART G
116 Fouchard, Gaillard, Goldman on International Commercial Arbitration (edited by
Emmanuel Gaillard and John Savage, 1999) 396
117 Gary Born (n 62) 1143
118 Interpretation of Greco-Turkish Agreement of December 1st, 1926, Advisory Opinion,
Series B – No. 16 (August 28, 1928).
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1149
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

tribunal is properly constituted; and third, what matters have been submitted
to arbitration in accordance with the arbitration agreement. The basis for
the jurisdictional competence of an arbitral tribunal can be evinced from
the following observation of Lord Hoﬀman in Fili Shipping Company
Limited (supra): “In my opinion the construction of an arbitration clause
should start from the assumption that the parties, as rational businessmen,
are likely to have intended any dispute rising out of the relationship into
which they have entered or purported to enter to be decided by the same
tribunal.” In Dallah Real Estate and Tourism Holding Company v. The
Ministry of Religious Aﬀairs, Government of Pakistan,119 the United
Kingdom Supreme Court held that the tribunal’s own view of its jurisdiction
has no legal or evidential value when the issue pertains to the exercise of
legitimate authority by the tribunal. Thus, the UK position is that although
the arbitral tribunal is empowered to consider whether it has jurisdiction,
its determination is subject to the examination of the courts.
118. The courts in the United States have considered the principle of
competence-competence to be intertwined with the separability presumption.
In Prima Paint (supra), the United States Supreme Court held that if a claim
is made to the eﬀect that the underlying contract was induced fraudulently,
then the issue should be determined by the courts. The Supreme Court
concluded that all the other issues should be left for the determination of
the arbitral tribunal to “not only honor the plain meaning of the statute,
but also the unmistakably clear congressional purpose that the arbitration
procedure, when selected by the parties to a contract, be speedy, and not
subject to delay and obstruction in the courts.” In Buckeye Check Cashing
(supra), the United States Supreme Court reiterated Prima Paint (supra) by
holding that the arbitral tribunal should consider the issue of the validity of
underlying contract in the ﬁrst instance. Thus, the position in the US is that
the courts should only check if any invalidity is directed at the arbitration
agreement, leaving all the other issues, including that of the validity of the
underlying contract, to the arbitral tribunal.
119. Under Singaporean law, Article 21(1) of the Arbitration Act, 2001
incorporates the doctrine of competence-competence in so far as domestic

119 [2010] UKSC 46
1150 SUPREME COURT REPORTS [2023] 15 S.C.R.

arbitration is concerned. It provides that an arbitral tribunal may rule on
its own jurisdiction, including a plea that it has no jurisdiction and any
objections to the existence or validity of the arbitration agreement at any
stage of the arbitral proceedings. The conduct of international commercial
arbitrations in Singapore is governed by the International Arbitration Act,
1994.120 Section 3 of the IIA states that the Model Law has the force of law
in Singapore. In Malini Ventura v. Knight Capital Pte Ltd,121 the issue
before the Singapore High Court was whether the arbitral tribunal has
primacy to determine the existence of an arbitration agreement in the context
of international commercial arbitration. The Court analysed the scope and
purpose of Article 16(1) of the Model Law to hold that an arbitral tribunal
has ﬁrst priority in determining whether an arbitration agreement exists and
the court’s consideration must come after the tribunal’s own examination of
the issue. It was further observed that “the tribunal’s powers in relation to
the issue are wide because it can consider not only validity but also the very
existence of the arbitration agreement.” Thus, the Singapore High Court
has given full eﬀect to the doctrine of competence-competence since the
arbitral tribunal gets the ﬁrst priority to determine issues even with respect
to the very existence of the arbitration agreement, while the jurisdiction of
the courts is limited to a prima facie determination.
ii. India
120. Under the previous arbitration regime in India, that is the 1940 Act,
the issue of determining the existence or validity of arbitration agreement
was exclusively within the domain of the courts. To that eﬀect, Section 33
of the 1940 Act allowed any party to the arbitration agreement to ﬁle an
application before the courts challenging the existence or validity of an
arbitration agreement. In view of this, this Court consistently held that the
question as to the existence or validity of an arbitration agreement was to
be decided only by application to courts and not by the arbitral tribunal. 122
This position has now undergone a complete metamorphosis in the present

120 “IIA”
121 [2015] SGHC 225
122 Dhanrajamal Gobindram v. Shamji Kalidas & Co., 1961 SCC OnLine SC 28;
Khardah Co. Ltd. v. Raymon & Co. (India) Private Ltd., 1962 SCC OnLine SC
28.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1151
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

legislation. Section 16 of the Arbitration Act, which is based on Article 16
of the Model Law, recognizes the doctrine of competence-competence in
Indian arbitration law. Section 16 empowers the arbitral tribunal to rule
on its own jurisdiction, including ruling on any objections with respect to
the existence or validity of arbitration agreement. Importantly, the parties
have a right under Section 16(2) and 16(3) to challenge the jurisdiction of
the arbitral tribunal on grounds such as the non-existence or invalidity of
the arbitration agreement. The arbitral tribunal is obligated to decide on the
challenge to its jurisdiction, and where it rejects the challenge, it can proceed
with the arbitral proceedings and make an arbitral award. It is the principle
of procedural competence-competence which recognizes the power of an
arbitral tribunal to hear and decide challenges to its jurisdiction. Once the
arbitral tribunal makes an arbitral award, Section 16(6) allows the aggrieved
party to make an application for setting aside the award under Section 34.
Sections 16(5) and 16(6) further show that Parliament has completely ousted
the jurisdiction of courts to interfere during the arbitral proceedings - courts
can intervene only after the tribunal has made an award. Thus, Section 16
is intended to give full eﬀect to the procedural and substantive aspects of
the doctrine of competence-competence.
121. Section 34 of the Arbitration Act deals with applications for setting
aside arbitral awards. Section 34(2) provides that an arbitral award may be
set aside by the Court only if the party making the application establishes,
on the basis of the record of the arbitral tribunal, any of the following ﬁve
grounds:
(i) a party was under some incapacity; or
(ii) the arbitration agreement is not valid under the law to which the
parties have subjected it or, failing any indication thereon, under
the law for the time being in force; or
(iii) the party making an application was not given proper notice of
the appointment of an arbitrator or of the arbitral proceedings or
was otherwise unable to present his case; or
(iv) the arbitral award deals with a dispute not contemplated by or
not failing within the terms of the submission to arbitration, or it
contains decisions on matters beyond the scope of the submission
1152 SUPREME COURT REPORTS [2023] 15 S.C.R.

to arbitration, provided that if the decisions on matters submitted
to arbitration can be separated from those not so submitted, only
that part of the arbitral award which contains decisions on matters
not submitted to arbitration may be set aside; or
(v) the composition of the arbitral tribunal or the arbitral procedure
was not in accordance with the agreement of the parties, unless
such agreement was in conﬂict with a provision of Part I from
which the parties cannot derogate, or, failing such agreement,
was not in accordance with Part I.
Moreover, the court can set aside an arbitral award if it ﬁnds that:
(i) the subject-matter of the dispute is not capable of settlement by
arbitration under the law for the time being in force; or
(ii) the arbitral award is in conﬂict with the public policy of India.
122. Under Section 34, the grounds for setting aside an arbitral award
are speciﬁc. The provision requires a party challenging an award to plead
and prove the existence of one or more such grounds.123 The scheme of the
Arbitration Act shows that although an arbitral tribunal is given priority to
determine all issues pertaining to its jurisdiction based on the principle of
competence-competence, the tribunal’s decision is subject to judicial review
at the stage when an award is challenged. Moreover, one of the grounds on
which an arbitral award can be set aside is that the arbitration agreement
is not valid under law. This indicates that the Arbitration Act does not
contemplate the court determining the validity of an arbitration agreement
at a pre-arbitral stage.
123. In Indian Farmers Fertilizer Cooperative Limited v. Bhadra
Products,124 one of the issues before this Court was whether a decision on
the issue of limitation would go to the root of the jurisdiction of the arbitral
tribunal, and therefore be covered by Section 16 of the Arbitration Act. This
Court referred to Section 16(1) to observe that “the Arbitral Tribunal may
rule on its own jurisdiction, which makes it clear that it refers to whether
the Arbitral Tribunal may embark upon an inquiry into the issues raised by

123 Fiza Developers and Inter-Trade (P) Ltd. v. Amci (I) (P) Ltd., (2009) 17 SCC 796
124 (2018) 2 SCC 534
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1153
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

the parties to the dispute.” In Bhadra Products (supra), it was held that
the issue of limitation concerns the jurisdiction of the tribunal which tries
the proceedings.
124. In Uttarakhand Purv Sainik Kalyan Nigam Ltd v. Northern
Coal Field,125 the issue before this Court was whether a referral court at the
stage of appointment of arbitrators would be required to decide the issue
of limitation or leave it to the arbitral tribunal. A Bench of two Judges of
this Court held that the doctrine of competence-competence is “intended to
minimize judicial intervention, so that the arbitral process is not thwarted at
the threshold, when a preliminary objection is raised by one of the parties.”
Moreover, this Court held that Section 16 is an inclusive provision of very
wide ambit:
“7.13. In view of the provisions of Section 16, and the legislative policy
to restrict judicial intervention at the pre-reference stage, the issue of
limitation would require to be decided by the arbitrator. Sub-section
(1) of Section 16 provides that the Arbitral Tribunal may rule on
its own jurisdiction, “including any objections” with respect to
the existence or validity of the arbitration agreement. Section 16
is an inclusive provision, which would comprehend all preliminary
issues touching upon the jurisdiction of the Arbitral Tribunal. The
issue of limitation is a jurisdictional issue, which would be required
to be decided by the arbitrator under Section 16, and not the High
Court at the pre-reference stage under Section 11 of the Act. Once
the existence of the arbitration agreement is not disputed, all issues,
including jurisdictional objections are to be decided by the arbitrator.”
(emphasis supplied)
125. In view of the above discussion, the issue that comes up for
our consideration is whether an issue of stamping is a jurisdictional issue.
Jurisdiction is generally deﬁned as the power of a court or tribunal to hear
and determine a cause, and to adjudicate or exercise any judicial power in
relation to such cause.126 Jurisdiction refers to the authority of a court or

125 (2020) 2 SCC 455
126 Sukh Lal Sheikh v. Tara Chand Ta, 1905 SCC OnLine Cal 164
1154 SUPREME COURT REPORTS [2023] 15 S.C.R.

tribunal to decide matters that are litigated before it or to take cognizance
of matters presented before it in a formal way for its decision. In Oﬃcial
Trustee, West Bengal v. Sachindra Nath Chatterjee,127 this Court held
that for a court to have jurisdiction to decide a particular matter, it must not
only have jurisdiction to try the suit brought but must also have the authority
to pass the orders sought. In NTPC v. Siemens Atkeingesllchaft,128 this
Court observed that any refusal to go into the merits of a claim may be in
the realm of jurisdiction. Accordingly, it was observed that the issue of
limitation goes to jurisdiction because if a claim is barred by limitation, a
tribunal can refuse to exercise its jurisdiction.
126. Section 35 of the Stamp Act mandates that an unstamped
instrument cannot be acted upon unless it is duly stamped. The question is
whether a tribunal can eﬀectively exercise its jurisdiction to settle the claims
between the parties until stamp duty is paid on the underlying instrument.
In view of the decision of this Court in Uttarakhand Purv Sainik Kalyan
Nigam Ltd (supra), the scope of an arbitral tribunal’s authority is wide
enough as to comprehend all preliminary issues aﬀecting its jurisdiction,
including the issue of suﬃciency of stamping.
127. In case the issue of stamping is raised before an arbitral tribunal,
Sections 33 and 35 of the Stamp Act make it evident that a person having
authority by “consent of parties” to receive evidence is empowered to
impound and examine an instrument. A person having authority “by
consent of parties” to receive evidence includes an arbitral tribunal which
is constituted by consent of parties.
iii. Negative competence-competence
128. The international arbitration law as well as domestic law prioritize
the arbitral tribunal by permitting them to initially decide challenges to their
authority instead of the courts. The policy consideration behind this approach
is two-fold: ﬁrst, to recognize the mutual intention of the parties of choosing
the arbitrator to resolve all their disputes about the substantive rights and
obligations arising out of contract; and second, to prevent parties from

127 (1969) 3 SCR
128 (2007) 4 SCC 451
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1155
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

initiating parallel proceedings before courts and delaying the arbitral process.
This is the positive aspect of the doctrine of competence-competence.
129. The negative aspect, in contrast, speaks to the national courts.
It instructs the courts to limit their interference at the referral stage by
deferring to the jurisdiction of the arbitral tribunal in issues pertaining to
the existence and validity of an arbitration agreement. Thus, the negative
aspect of the doctrine of competence-competence suggests that the courts
should refrain from entertaining challenge to the jurisdiction of the arbitral
tribunal before the arbitrators themselves have had an opportunity to do
so.129 Allowing arbitral tribunals to ﬁrst rule on their own jurisdiction and
later allowing the courts to determine if the tribunal exercised its powers
properly safeguards both the power and authority of the arbitral tribunal as
well as the courts. The negative aspect of the doctrine has been expressly
recognized by Indian courts. Considering both the positive and negative
facets, the principle can be deﬁned as a rule whereby arbitrators must have
the ﬁrst opportunity to hear challenges relating to their jurisdiction, which
is subject to subsequent review by courts.130
130. In Chloro Controls India (P) Ltd. v. Severn Trent Water
Puriﬁcation Inc.,131 one of the issues before this Court was whether the
court at the referral stage under Section 45 is required to determine the
validity of an arbitration agreement. This Court recognized that the doctrine
of competence-competence has both the positive and the negative aspects.
It was observed that while the positive aspect enables the arbitrator to rule
on its own jurisdiction, the negative aspect deprives the courts of their
jurisdiction. However, this Court noted the absence of a provision similar
to Section 16 in Part II to conclude that the referral court is required to test
for the ingredients of Section 45 at the threshold stage itself.
131. Thereafter, this Court in Vidya Drolia (supra) held that the
doctrine of competence-competence has both negative and positive
connotations. The relevant extract from the decision is set out below:

129 George A Bermann, ‘The “Gateway” Problem in International Commercial Arbitration’
(2012) 37 Yale Journal of International Law 1, 16.
130 Fouchard (n 116) 401
131 (2013) 1 SCC 641
1156 SUPREME COURT REPORTS [2023] 15 S.C.R.

“129. Principles of competence-competence have positive and negative
connotations. As a positive implication, the Arbitral Tribunals are
declared competent and authorised by law to rule as to their jurisdiction
and decide non-arbitrability questions. In case of expressed negative
eﬀect, the statute would govern and should be followed. Implied
negative eﬀect curtails and constrains interference by the court at the
referral stage by necessary implication in order to allow the Arbitral
Tribunal to rule as to their jurisdiction and decide non-arbitrability
questions. As per the negative eﬀect, courts at the referral stage are
not to decide on merits, except when permitted by the legislation
either expressly or by necessary implication, such questions of non-
arbitrability. Such prioritisation of the Arbitral Tribunal over the courts
can be partial and limited when the legislation provides for some or
restricted scrutiny at the “ﬁrst look” referral stage. We would, therefore,
examine the principles of competence-competence with reference to
the legislation, that is, the Arbitration Act.”
132. In Arcelormittal Nippon Steel (India) Ltd. v. Essar Bulk
Terminal Ltd.,132 this Court held that negative competence-competence
prohibits courts from hearing disputes which the parties have mutually
intended to submit to the jurisdiction of arbitral tribunal. As held in the
preceding sections, the issue of stamping is a jurisdictional issue. The
principle of negative competence-competence requires the courts to leave the
issue of stamping to be decided by the arbitral tribunal in the ﬁrst instance.
H*. Judicial interference under the Arbitration Act
133. When parties enter into an arbitration agreement, it is their mutual
and unequivocal intention to submit their disputes to an arbitral tribunal. The
arbitration law recognizes this aspect by granting autonomy to the parties
to adopt a procedural mechanism for the appointment of arbitrators. Party
autonomy has also been expressly recognized by international arbitration
covenants as well as national arbitration legislations. For instance, Article
11(2) of the Model Law states that parties to an arbitration agreement are
free to agree on a procedure for appointing the arbitrator or arbitrators. In
a situation where the agreed procedure of the parties fails, the Model Law

* Ed. Note: PART H
132 (2022) 1 SCC 712
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1157
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

permits the national courts to appoint arbitrators on a request of a party.
The recourse to judicial appointment of arbitrators is often invoked as a last
resort by the parties when their agreed procedure becomes unworkable. The
power of appointment of arbitrators is vested with national courts to resolve
the deadlock in appointment of an arbitrator.133
134. As discussed in the preceding segments of this judgment, Section
5 of the Arbitration Act disallows a judicial authority from intervening unless
expressly provided under Part I. In the present proceedings, the exercise of
the powers by the courts or judicial authorities as provided under Section 8
and 11 becomes particularly relevant for our consideration.
135. According to Fouchard, an arbitration agreement has both a
positive and negative eﬀect. The positive eﬀect is that the parties ought to
honor their undertaking to submit to arbitration any disputes covered by their
arbitration. On the ﬂip side, the negative eﬀect of the arbitration agreement
is that courts are prohibited from hearing such disputes.134 Most international
covenants have recognised the principle that courts lack jurisdiction to hear
disputes covered by an arbitration agreement. For instance, Article II(3) of
the New York Convention states that “[t]he court of a Contracting State,
when seized of an action in a matter in respect of which the parties have
made an agreement within the meaning of this article, shall, at request of
one of the parties, refer the parties to arbitration, unless it ﬁnds that the said
agreement is null and void, inoperative or incapable of being performed.”
136. In the Indian context, Section 8 provides that when an action
is brought before a judicial authority in a matter which is the subject of
an arbitration agreement, such judicial authority shall refer the parties to
arbitration on an application made by a party to the arbitration agreement
or any person claiming through or under him not later than the date of
submitting their ﬁrst statement on the substance of the dispute. Section 8
mandates the judicial authority to refer the parties to arbitration “unless it
ﬁnds that prima facie no valid arbitration agreement exists.” Section 8 is
based on Article 8 of the Model Law which provides that a “court” before

133 Digest of Case Law on the Model Law on International Commercial Arbitration (2012)
60
134 Fouchard (n 116) 402
1158 SUPREME COURT REPORTS [2023] 15 S.C.R.

which an action is brought in a matter which is the subject of an arbitration
agreement shall refer the parties to arbitration “unless it ﬁnds that the
agreement is null and void, inoperative or incapable of being performed.”
It is evident that Section 8 has made a departure from Article 8 by using
the expansive term “judicial authority” rather than “court.” The intention
of the legislature to provide an expansive application can also be gauged
from the fact that the expression “unless it ﬁnds that the agreement is null
and void, inoperative or incapable of being performed” does not ﬁnd place
in Section 8.135
137. According to the UNCITRAL Working Group Commentary
on the Model Law, Article 8 of the Model Law enshrines the “negative
eﬀect” of an arbitration agreement.136 Moreover, Article 8 gives eﬀect to
the intention of the parties to submit their disputes to arbitration to the
exclusion of courts, irrespective of whether such exclusion is expressed
in the agreement. Similar legislation has also been incorporated under the
English137 and French138 national laws. It is worth noting that most of the
national legislations entitle the courts at the referral stage to review the
existence and validity of arbitration agreements. For example, Section 9(4)
of the English Arbitration Act, 1996 provides that a court can stay the legal
proceedings unless satisﬁed that the arbitration agreement “is null and void,
inoperative, or incapable of being performed.” Similarly, Article 1458 of

135 A Ayyasamy v. A Paramsivam, (2016) 10 SCC 386
136 Analytical Commentary on Draft Text of a Model Law on International Commercial
Arbitration, A/CN.9/264 (25 March 1985) 38.
137 Article 9(1) of UK Arbitration Act: It reads: “(1)A party to an arbitration agreement
against whom legal proceedings are brought (whether by way of claim or counterclaim)
in respect of a matter which under the agreement is to be referred to arbitration may
(upon notice to the other parties to the proceedings) apply to the court in which the
proceedings have been brought to stay the proceedings so far as they concern that
matter.
[…]
(4) On an application under this section the court shall grant a stay unless satisﬁed
that the arbitration agreement is null and void, inoperative, or incapable of being
performed.”
138 Article 1458 of French Code of Civil Procedure, 1981. It reads: “If a dispute pending
before an arbitral tribunal on the basis of an arbitration agreement is brought before a
State court, it shall declare itself incompetent.
If the dispute is not yet before an arbitral tribunal, the State court shall also declare
itself incompetent, unless the arbitration agreement is manifestly null and void.”
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1159
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

the French Civil Code provides that a state court is incompetent to decide
on issues pertaining to an arbitration agreement, unless the arbitration
agreement is “manifestly null and void.” Thus, the standard of review that
the court should adopt at the pre-arbitral stage diﬀers considerably across
jurisdictions.
138. One of the major bottlenecks in the smooth functioning of arbitral
proceedings is the inability of the parties to ensure the constitution of the
arbitral tribunal once the dispute has arisen. To ensure that such disagreement
between the parties does not derail the arbitral proceedings, international
covenants as well as national laws allow judicial authorities to assist the
parties in appointing arbitrators. For instance, Article 1444 of the French
Civil Code in the context of domestic arbitration provides that “[i]f a dispute
has arisen and problems occur with regard to the constitution of the arbitral
tribunal due to the behavior of a party or to the implementation of the
appointment method, the arbitrator or arbitrators shall be appointed by the
President of the Tribunal de Grande Instance.”139 The said provision further
provides that the President shall declare that there is no basis for appointment
if the “arbitration clause is manifestly null and void or insuﬃcient to
constitute an arbitral tribunal.” The basis for providing judicial intervention
to the extent of determining the validity of arbitration agreement is to ensure
that the courts do not mechanically appoint arbitrators in situations where
the arbitration does not have any contractual basis.140
139. Section 11 of the Arbitration Act deals with the appointment
of arbitrators. It recognizes the autonomy of the parties to agree upon
a procedure for appointment of an arbitrator or arbitrators. Section 11
requires the intervention of the court only when there is a deadlock or
failure of the parties to follow the appointment procedure. In the process,
Section 11 is meant to give eﬀect to the mutual intention of the parties to
settle their disputes by arbitration in situations where the parties fail to
appoint an arbitrator or arbitrators. In an arbitration with three arbitrators,
each party is required to appoint one arbitrator each, and subsequently
the two arbitrators will appoint the third arbitrator. Section 11(6) confers

139 Article 1444, French Code of Civil Procedure.
140 Fouchard (n 116) 495
1160 SUPREME COURT REPORTS [2023] 15 S.C.R.

powers on the Supreme Court and the High Court, as the case may be, on
the failure of the parties to comply with the agreed arbitration procedure.
Section 11(6) enlists three possible defects in the appointment procedure,
namely: ﬁrst, a party fails to act as required by the agreed procedure;
second, the parties or the two appointed arbitrators fail to reach an
agreement expected of them under that procedure; or third, a person,
including an institution, fails to perform any function entrusted to them
or under the agreed procedure.
140. Section 11(6) has had a long and chequered history before this
Court, particularly in respect of the nature of function of the Chief Justice
or his designate in the appointment of an arbitrator. In SPB & Co. v. Patel
Engineering Ltd.,141 a seven-Judge Bench of this Court held that the power
exercised by the Chief Justice of India or a Chief Justice of the High Court
under Section 11(6) is a judicial power. In the process, this Court analysed
the scope of the powers and authority of the referral court under Section
11(6). Moreover, this Court noted that Sections 8 and 11 are complementary
in nature. Consequently, if the judicial authority acting under Section 8 has
to mandatorily decide the issue of jurisdiction before referring the parties
to arbitration, the same standard of scrutiny was also held to be applicable
to the reference under Section 11. In conclusion, it was held that the Chief
Justice or their designate at the referral stage under Section 11(6) had the
right to determine all preliminary issues:
“47 (iv) The Chief Justice or the designated Judge will have the right
to decide the preliminary aspects as indicated in the earlier part of
this judgment. These will be his own jurisdiction to entertain the
request, the existence of a valid arbitration agreement, the existence or
otherwise of a live claim, the existence of the condition for the exercise
of his power and on the qualiﬁcations of the arbitrator or arbitrators.
The Chief Justice or the designated Judge would be entitled to seek
the opinion of an institution in the matter of nominating an arbitrator
qualiﬁed in terms of Section 11(8) of the Act if the need arises but the
order appointing the arbitrator could only be that of the Chief Justice
or the designated Judge.”

141 (2005) 8 SCC 618
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1161
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

141. The extent of judicial interference at the referral stage was
scrutinised by a Bench of two Judges of this Court in National Insurance
Co. Ltd. v. Boghara Polyfab Pvt. Ltd.142 This Court held that when the
intervention of the court is sought under Section 11 of the Arbitration Act,
the following categories of issues will arise before the referral court:
(i) The issues which the Chief Justice or his designate is bound
to decide. These issues were: ﬁrst, whether the party making
the application has approached the appropriate High Court;
and second, whether there is a valid arbitration agreement and
whether the party who has applied under Section 11 of the Act,
is a party to such an agreement;
(ii) The issues which the Chief Justice or his designate may choose to
decide or leave them to the decision of the arbitral tribunal. These
issues were: ﬁrst, whether the claim is a dead (long-barred) claim
or a live claim; and second, whether the parties have concluded
the contract/ transaction by recording the satisfaction of their
mutual rights and obligations or by receiving the ﬁnal payment
without objection; and
(iii) The issues which the Chief Justice or their designate should
leave exclusively to the arbitral tribunal. These issues were:
ﬁrst, whether a claim made falls within the arbitration clause
(as for example, a matter which is reserved for ﬁnal decision
of a departmental authority and excepted or excluded from
arbitration); and second, merits or any claim involved in the
arbitration.
142. The decisions of this Court in Patel Engineering (supra) and
Boghara Polyfab (supra) allowed for greater judicial interference at the
pre-arbitral stage. In eﬀect, the referral courts were encouraged to conduct
mini-trials instead of summarily dealing with the preliminary issues. This
was also noted by the Law Commission of India, which observed that
judicial intervention in the arbitral proceedings is a pervasive problem in

142 (2009) 1 SCC 267
1162 SUPREME COURT REPORTS [2023] 15 S.C.R.

India leading to signiﬁcant delays in the arbitration process.143 The Law
Commission recognized that one of the problems plaguing implementation
of the Arbitration Act was that Section 11 applications were kept pending
for years by the courts. To remedy the situation, the Law Commission
proposed changing the then existing scheme of the power of appointment
being vested in the “Chief Justice” to the “High Court” and the “Supreme
Court”. It also clariﬁed that the power of appointment of arbitrators ought
not to be regarded as a judicial act.
143. Signiﬁcantly, the Law Commission observed that there was a need
to reduce judicial intervention at the pre-arbitral stage, that is, prior to the
constitution of the arbitral tribunal. Accordingly, it proposed limiting the
scope of the judicial intervention at the referral stage under Sections 8 and
11 of the Arbitration Act “to situations where the Court/ Judicial Authority
ﬁnds that the arbitration agreement does not exist or is null and void.” The
Law Commission suggested insertion of sub-section 6A under Section 11
which would read: “Any appointment by the High Court or the person or
institution designated by it under sub-section (4) or sub-section (5) or sub-
section (6) shall not be made only if the High Court ﬁnds that the arbitration
does not exist or is null and void.” In light of the recommendations of the
Law Commission, Parliament passed the Arbitration and Conciliation
(Amendment) Act 2015144 to incorporate Section 11(6-A).
144. The Statement of Objects and Reasons of the 2015 Amendment
Act states that sub-section (6A) is inserted in Section 11 to provide that
the Supreme Court or the High Court while considering application under
sub-section (4) to (6) “shall conﬁne to the examination of an arbitration
agreement.” With the coming into force of the 2015 Amendment Act, the
nature of preliminary examination at the referral stage under Section 11 was
conﬁned to the existence of an arbitration agreement. It also incorporates
a non-obstante clause which covers “any judgment, decree or order of any
Court.” By virtue of the non-obstante clause, Section 11(6A) has set out a
new position of law, which takes away the basis of the position laid down
by the previous decisions of this Court in Patel Engineering (supra) and

143 Law Commission of India, 246th Report (2014)
144 “2015 Amendment Act”
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1163
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

Boghara Polyfab (supra). It is also important to note that Parliament did
not incorporate the expression “or is null and void” as was suggested by
the Law Commission. This indicates that Parliament intended to conﬁne
the jurisdiction of the courts at the pre-arbitral stage to as minimum a level
as possible.
145. The effect and impact of the 2015 Amendment Act was
subsequently clariﬁed by this Court. In Duro Felguera, S A v. Gangavaram
Port Ltd.,145 Justice Kurien Joseph noted that the intention of the legislature
in incorporating Section 11(6A) was to limit the scope of the referral court’s
jurisdiction to only one aspect – the existence of an arbitration agreement.
To determine the existence of an arbitration agreement, the court only
needs to examine whether the underlying contract contains a clause which
provides for arbitration pertaining to the disputes which have arisen between
the parties to the agreement. This Court further held that Section 11(6A)
incorporates the principle of minimal judicial intervention:
“59. The scope of the power under Section 11(6) of the 1996 Act
was considerably wide in view of the decisions in SBP and Co. and
Boghara Polyfab. This position continued till the amendment brought
about in 2015. After the amendment, all that the courts need to see
is whether an arbitration agreement exists—nothing more, nothing
less. The legislative policy and purpose is essentially to minimise the
Court’s intervention at the stage of appointing the arbitrator and this
intention as incorporated in Section 11(6-A) ought to be respected.”
146. In 2017, the High-Level Committee to Review the
Institutionalization of Arbitration Mechanism in India submitted a report
noting that while the 2015 amendment facilitated the speedy disposal of
Section 11 applications, they failed to limit judicial interference in arbitral
proceedings. Accordingly, the High-Level Committee recommended the
amendment of Section 11 to provide for appointment of arbitrators solely by
arbitral institutions designated by the Supreme Court in case of international
commercial arbitrations or the High Court in case of all other arbitrations.
In view of the report of the High-Level committee, Parliament enacted the

145 (2017) 9 SCC 729
1164 SUPREME COURT REPORTS [2023] 15 S.C.R.

Arbitration and Conciliation (Amendment) Act 2019146 omitting Section
11(6A) so as to leave the appointment of arbitrators to arbitral institutions.
Section 1(2) of the 2019 Amendment Act provides that amended provisions
shall come into force on such date as notiﬁed by the Central Government in
the oﬃcial gazette However, Section 3 of the 2019 Amendment Act which
amended Section 11 by omitting Section 11(6A) is yet to be notiﬁed. Till
such time, Section 11(6A) will continue to operate.
147. In Mayavati Trading (P) Ltd. v. Pradyuat Deb Burman,147 a
three-Judge Bench of this Court aﬃrmed the reasoning in Duro Felguera
(supra) by observing that the examination under Section 11(6A) is “conﬁned
to the examination of the existence of an arbitration agreement and is to
be understood in the narrow sense.” Moreover, it held that the position of
law prior to the 2015 Amendment Act, as set forth by the decisions of this
Court in Patel Engineering (supra) and Boghara Polyfab (supra), has been
legislatively overruled. Thus, this Court gave eﬀect to the intention of the
legislature in minimizing the role of the courts at the pre-arbitral stage to
the bare minimum.
148. Thereafter, in Vidya Drolia (supra), another three-Judge Bench
of this Court, aﬃrmed the ruling in Mayavati Trading (supra) that Patel
Engineering (supra) has been legislatively overruled. In Vidya Drolia
(supra), one of the issues before this Court was whether the court at the
reference stage or the arbitral tribunal in the arbitration proceedings would
decide the question of non-arbitrability. This Court began its analysis by
holding that an arbitration agreement has to satisfy the mandate of the
Contract Act, in addition to satisfying the requirements stipulated under
Section 7 of the Arbitration Act to qualify as an agreement.
149. In the course of the decision, one of the questions before this
Court in Vidya Drolia (supra) was the interpretation of the word “existence”
as appearing in Section 11. It was held that existence and validity are
intertwined. Further, it was observed that an arbitration agreement does
not exist if it is illegal or does not satisfy mandatory legal requirements.
Therefore, this Court read the mandate of valid arbitration agreement

146 “2019 Amendment Act”
147 (2019) 8 SCC 714
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1165
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

contained in Section 8 into the mandate of Section 11, that is, “existence of
an arbitration agreement.”
150. At the outset, Vidya Drolia (supra) noted that “Section 11 has
undergone another amendment vide Act 33 of 2019 with eﬀect from 9-8-
2019.” The purport of the omission of the said clause was further explained
in the following terms:
“145. Omission of sub-section (6-A) by Act 33 of 2019 was with the
speciﬁc object and purpose and is relatable to by substitution of sub-
sections (12), (13) and (14) of Section 11 of the Arbitration Act by Act
33 of 2019, which, vide sub-section (3-A) stipulates that the High Court
and this Court shall have the power to designate the arbitral institutions
which have been so graded by the Council under Section 43-I, provided
where a graded arbitral institution is not available, the High Court
concerned shall maintain a panel of arbitrators for discharging the
function and thereupon the High Court shall perform the duty of an
arbitral institution for reference to the Arbitral Tribunal. Therefore, it
would be wrong to accept that post omission of sub-section (6-A) of
Section 11 the ratio in Patel Engg. Ltd. [SBP & Co. v. Patel Engg.
Ltd., (2005) 8 SCC 618] would become applicable.”
151. Vidya Drolia (supra) proceeds on the presumption that Section
11(6A) was effectively omitted from the statute books by the 2019
Amendment Act. This is also reﬂected in the conclusion arrived at by the
Court, as is evident from the following extract:
“154.1. Ratio of the decision in Patel Engg. Ltd. [SBP & Co. v. Patel
Engg. Ltd., (2005) 8 SCC 618] on the scope of judicial review by
the court while deciding an application under Sections 8 or 11 of
the Arbitration Act, post the amendments by Act 3 of 2016 (with
retrospective eﬀect from 23-10-2015) and even post the amendments
vide Act 33 of 2019 (with eﬀect from 9-8-2019), is no longer
applicable.”
(emphasis supplied)
152. We are of the opinion that the above premise of the Court in
Vidya Drolia (supra) is erroneous because the omission of Section 11(6A)
has not been notiﬁed and, therefore, the said provision continues to remain
1166 SUPREME COURT REPORTS [2023] 15 S.C.R.

in full force. Since Section 11(6A) continues to remain in force, pending
the notiﬁcation of the Central Government, it is incumbent upon this Court
to give true eﬀect to the legislative intent.
153. The 2015 Amendment Act has laid down diﬀerent parameters for
judicial review under Section 8 and Section 11. Where Section 8 requires
the referral court to look into the prima facie existence of a valid arbitration
agreement, Section 11 conﬁnes the court’s jurisdiction to the examination
of the existence of an arbitration agreement. Although the object and
purpose behind both Sections 8 and 11 is to compel parties to abide by their
contractual understanding, the scope of power of the referral courts under the
said provisions is intended to be diﬀerent. The same is also evident from the
fact that Section 37 of the Arbitration Act allows an appeal from the order of
an arbitral tribunal refusing to refer the parties to arbitration under Section
8, but not from Section 11. Thus, the 2015 Amendment Act has legislatively
overruled the dictum of Patel Engineering (supra) where it was held that
Section 8 and Section 11 are complementary in nature. Accordingly, the two
provisions cannot be read as laying down a similar standard.
154. The legislature conﬁned the scope of reference under Section
11(6A) to the examination of the existence of an arbitration agreement. The
use of the term “examination” in itself connotes that the scope of the power
is limited to a prima facie determination. Since the Arbitration Act is a self-
contained code, the requirement of “existence” of an arbitration agreement
draws eﬀect from Section 7 of the Arbitration Act. In Duro Felguera
(supra), this Court held that the referral courts only need to consider one
aspect to determine the existence of an arbitration agreement – whether the
underlying contract contains an arbitration agreement which provides for
arbitration pertaining to the disputes which have arisen between the parties
to the agreement. Therefore, the scope of examination under Section 11(6A)
should be conﬁned to the existence of an arbitration agreement on the basis
of Section 7. Similarly, the validity of an arbitration agreement, in view of
Section 7, should be restricted to the requirement of formal validity such
as the requirement that the agreement be in writing. This interpretation also
gives true eﬀect to the doctrine of competence-competence by leaving the
issue of substantive existence and validity of an arbitration agreement to
be decided by arbitral tribunal under Section 16. We accordingly clarify the
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1167
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

position of law laid down in Vidya Drolia (supra) in the context of Section
8 and Section 11 of the Arbitration Act.
155. The burden of proving the existence of arbitration agreement
generally lies on the party seeking to rely on such agreement. In jurisdictions
such as India, which accept the doctrine of competence-competence, only
prima facie proof of the existence of an arbitration agreement must be
adduced before the referral court. The referral court is not the appropriate
forum to conduct a mini-trial by allowing the parties to adduce the evidence
in regard to the existence or validity of an arbitration agreement. The
determination of the existence and validity of an arbitration agreement on
the basis of evidence ought to be left to the arbitral tribunal. This position
of law can also be gauged from the plain language of the statute.
156. Section 11(6A) uses the expression “examination of the existence
of an arbitration agreement.” The purport of using the word “examination”
connotes that the legislature intends that the referral court has to inspect or
scrutinize the dealings between the parties for the existence of an arbitration
agreement. Moreover, the expression “examination” does not connote or
imply a laborious or contested inquiry.148 On the other hand, Section 16
provides that the arbitral tribunal can “rule” on its jurisdiction, including
the existence and validity of an arbitration agreement. A “ruling” connotes
adjudication of disputes after admitting evidence from the parties. Therefore,
it is evident that the referral court is only required to examine the existence
of arbitration agreements, whereas the arbitral tribunal ought to rule on its
jurisdiction, including the issues pertaining to the existence and validity
of an arbitration agreement. A similar view was adopted by this Court in
Shin-Etsu Chemical Co. Ltd. v. Aksh Optiﬁbre Ltd.149
157. In Shin-Etsu (supra), this Court was called upon to determine
the nature of adjudication contemplated by unamended Section 45 of the
Arbitration Act when the objection with regards to the arbitration agreement
being “null and void, inoperative or incapable of being performed” is raised
before a judicial authority. Writing for the majority, Justice B N Srikrishna

148 P Ramanatha Aiyar, The Law Lexicon (Second edition, 1997) 666
149 (2005) 7 SCC 234
1168 SUPREME COURT REPORTS [2023] 15 S.C.R.

held that Section 45 does not require the judicial authority to give a ﬁnal
determination. The court observed that:
“74. There are distinct advantages in veering to the view that Section 45
does not require a ﬁnal determinative ﬁnding by the court. First, under
the Rules of Arbitration of the International Chamber of Commerce (as
in force with eﬀect from 1-1-1998), as in the present case, invariably
the Arbitral Tribunal is vested with the power to rule upon its own
jurisdiction. Even if the court takes the view that the arbitral agreement
is not vitiated or that it is not invalid, inoperative or unenforceable,
based upon purely a prima facie view, nothing prevents the arbitrator
from trying the issue fully and rendering a ﬁnal decision thereupon.
If the arbitrator ﬁnds the agreement valid, there is no problem as the
arbitration will proceed and the award will be made. However, if the
arbitrator ﬁnds the agreement invalid, inoperative or void, this means
that the party who wanted to proceed for arbitration was given an
opportunity of proceeding to arbitration, and the arbitrator after fully
trying the issue has found that there is no scope for arbitration. Since
the arbitrator's ﬁnding would not be an enforceable award, there is
no need to take recourse to the judicial intercession available under
Section 48(1)(a) of the Act.”
158. When the referral court renders a prima facie opinion, neither the
arbitral tribunal, nor the court enforcing the arbitral award will be bound
by such a prima facie view. If a prima facie view as to the existence of
an arbitration agreement is taken by the referral court, it still allows the
arbitral tribunal to examine the issue in-depth. Such a legal approach will
help the referral court in weeding out prima facie non-existent arbitration
agreements. It will also protect the jurisdictional competence of the arbitral
tribunals to decide on issues pertaining to the existence and validity of an
arbitration agreement.
I*. Harmonious construction of the Arbitration Act, the Stamp
Act, and the Contract Act
159. One of the cardinal principles of the interpretation of statutes is to
discover and give eﬀect to the legislative intention. If a statute is susceptible
to two interpretations, the court will have to reject the construction which
* Ed. Note: PART I
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1169
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

will defeat the plain intention of the legislation.150 The court has to ascertain
the intention of the legislation by considering not only the clause to be
interpreted, but also the entirety of the statute. The legislature often enacts
a statute to give eﬀect to legislative policy. When enacting a statute, the
legislature often endeavors to ensure that the provisions of a statute do not
contradict the provisions of the same statute or provisions of another statute.
However, inconsistencies or contradictions may nonetheless arise between
statutes. In such situations, it is left to the court to bring about a harmony
between the working of such statutes.
160. In Sultana Begum v. Prem Chand Jain,151 this Court analysed
the relevant decisions of this Court and laid down the following principles
pertaining to the 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.

150 CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57
151 (1997) 1 SCC 373
1170 SUPREME COURT REPORTS [2023] 15 S.C.R.

161. In Kandla Export Corporation v. OCI Corporation152, the
issue before this Court was whether an appeal which was not maintainable
under Section 50 of the Arbitration Act was nonetheless maintainable under
Section 13(1) of the Commercial Courts Act 2015. Section 50 the Arbitration
Act provides that no appeal shall lie from the order refusing to: (a) refer the
parties to arbitration under section 45; and (b) enforce a foreign award under
section 48. Section 13(1) of the Commercial Courts Act, 2015 allows any
person aggrieved by the decision of the Commercial Court or Commercial
Division of a High Court to ﬁle an appeal before the Commercial Appellate
Division of that High Court.
162. This Court referred to the objects of both the statutes to observe
that the Arbitration Act is meant to eﬀectuate a speedy resolution of disputes
between parties, while the Commercial Courts Act 2015 is for the speedy
resolution of commercial disputes involving signiﬁcant amounts of money.
It was held that the provision of another appeal under Section 13(1) of
the Commercial Courts Act 2015 in matters of foreign arbitration would
be against the object of speedy enforcement of foreign arbitral awards.
Therefore, this Court held that any construction of Section 13 of the
Commercial Courts Act, 2015 which would lead to further delay, instead of
an expeditious enforcement of a foreign award must be eschewed:
“Even on applying the doctrine of harmonious construction of both
statutes, it is clear that they are best harmonized by giving eﬀect to
the special statute i.e. the Arbitration Act, vis-à-vis the more general
statute, namely, the Commercial Courts Act, being left to operate in
spheres other than arbitration.”
163. In Silpi Industries v. Kerala State Road Transport
Corporation,153 the issue before this Court was whether a counter-claim
was maintainable in arbitration proceedings initiated under Section 18(3) of
the Micro, Small and Medium Enterprises Development Act 2006. Section
18(3) provides that where the conciliation proceedings initiated by any party
are not successful and stand terminated without any settlement between the
parties, the Micro and Small Enterprises Facilitation Council shall either take

152 (2018) 14 SCC 715
153 2021 SCC OnLine SC 439
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1171
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

up the dispute for arbitration or refer it to any institution or centre. The said
provision further states that the provisions of the Arbitration Act shall then
apply to the disputes as if the arbitration was in pursuance of an arbitration
agreement referred to in Section 7(1) of the Arbitration Act.
164. This Court noted that Section 23(2A) of the Arbitration Act gives
the respondent a right to submit a counter-claim or plead a set-oﬀ, which
shall be adjudicated upon by the arbitral tribunal. It was held that since
Section 18(3) of the MSME Act expressly provides that proceedings initiated
under Section 18(3) shall be carried out as if they were in pursuance of an
arbitration agreement under Section 7(1) of the Arbitration Act, the right
to make a counter-claim before the statutory authorities exists under the
MSMED Act. In this way, the two statutes were harmonized.
165. In the present reference, the challenge before this Court is to
harmonize the provisions of the Arbitration Act and the Stamp Act. The
object of the Arbitration Act is to inter alia ensure an eﬃcacious process
of arbitration and minimize the supervisory role of courts in the arbitral
process. On the other hand, the object of the Stamp Act is to secure revenue
for state. It is a cardinal principle of interpretation of statutes that provisions
contained in two statutes must be, if possible, interpreted in a harmonious
manner to give full eﬀect to both the statutes.154 In providing a harmonious
interpretation, this Court has to be cognizant of the fact that it does not defeat
the purpose of the statutes or render them ineﬀective. 155 The challenge,
therefore, before this Court is to preserve the workability and eﬃcacy of
both the Arbitration Act and the Stamp Act.156
i. The Arbitration Act will have primacy with respect to arbitration
agreements
166. As discussed in the preceding segments, the Arbitration Act is a
legislation enacted to inter alia consolidate the law relating to arbitration
in India. It will have primacy over the Stamp Act and the Contract Act in
relation to arbitration agreements for multiple reasons.

154 Jagdish Singh v. Lt. Governor, Delhi, (1997) 4 SCC 435
155 State of Tamil Nadu v. M K Kandaswami, (1975) 4 SCC 745
156 CIT v. Hindustan Bulk Carriers, (2003) 3 SCC 57
1172 SUPREME COURT REPORTS [2023] 15 S.C.R.

a. The Arbitration Act is a special law and the Indian Contract
Act and the Stamp Act are general laws
167. It is trite law that a general law must give way to a special law.
This rule of construction stems from the doctrine generalia specialibus non
derogant. In LIC v. D.J. Bahadur,157 this Court held:
“52. In determining whether a statute is a special or a general one,
the focus must be on the principal subject-matter plus the particular
perspective. For certain purposes, an Act may be general and for certain
other purposes it may be special and we cannot blur distinctions when
dealing with ﬁner points of law.”
In Sundaram Finance Ltd. v. T. Thankam,158 this Court held:
“13. … Once it is brought to the notice of the court that its jurisdiction
has been taken away in terms of the procedure prescribed under a
special statute, the civil court should ﬁrst see whether there is ouster of
jurisdiction in terms or compliance with the procedure under the special
statute. The general law should yield to the special law—generalia
specialibus non derogant. In such a situation, the approach shall not
be to see whether there is still jurisdiction in the civil court under
the general law. Such approaches would only delay the resolution
of disputes and complicate the redressal of grievance and of course
unnecessarily increase the pendency in the court.”
169. The following position of law emerges from these precedents:
a. 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; and
b. The court should examine whether its jurisdiction has been ousted
in terms of the procedure prescribed by a special law.
170. To determine which of the three statutes that this Court is faced
with is a special law, it is necessary to ﬁrst refer to their subject-matter:

157 (1981) 1 SCC 315
158 (2015) 14 SCC 444
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1173
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

a. The Stamp Act is a law governing the payment of stamp-duty
for all manner of instruments. Schedule I to the Stamp Act sets
out various types instruments which fall within the ambit of the
said legislation;
b. The Contract Act, as the name suggests, sets out the rules in
relation to contracts in general. An arbitration agreement is one
of the many diﬀerent types of contracts to which it is applicable;
and
c. The Arbitration Act contains the law relating to domestic
arbitration, international commercial arbitration, the enforcement
of foreign arbitral awards, and conciliation.
171. Second, the “particular perspective” of this case pertains to
whether an unstamped arbitration agreement is rendered unenforceable
pending the payment of stamp-duty so as to interpose a bar on the referral
court to refer parties to arbitration. The issue is not whether all agreements are
rendered unenforceable under the provisions of the Stamp Act but whether
arbitration agreements in particular are unenforceable.
172. The Arbitration Act is a special law in the context of this case
because it governs the law on arbitration, including arbitration agreements –
Section 2(1)(b) and Section 7 of this statute deﬁne an arbitration agreement.
In contrast, the Stamp Act deﬁnes ‘instruments’159 as a whole and the Contract
Act deﬁnes ‘agreements’160 and ‘contracts.’161
173. It is not only the deﬁnition of ‘arbitration agreement’ but also
the other provisions of the Arbitration Act and the purpose for which it was
enacted that makes it a special law. As observed by this Court in Bhaven
Construction. (supra), “the Arbitration Act is a code in itself.”162 It provides
for a detailed mechanism by which arbitration may be conducted, with
a view to ensuring its success as a speedy and eﬃcacious alternative to
the courts. The Statements of Objects and Reasons of the Arbitration Act

159 Section 2(14), Stamp Act
160 Section 2(e), Contract Act
161 Section 2(h), Contract Act
162 Ibid at paragraph 12
1174 SUPREME COURT REPORTS [2023] 15 S.C.R.

records that the main objective of this law was to comprehensively cover
international and commercial arbitration and conciliation as also domestic
arbitration and conciliation.
b. Section 5 of the Arbitration Act
174. In the above segments, we have dealt with the scope of Section
5 of the Arbitration Act. It restricts the extent of judicial intervention in
various matters governed by Part I of the Arbitration Act.163 The non-
obstante clause in this provision is of particular signiﬁcance. It indicates
that the rule in Section 5 (and consequently, the provisions of the Arbitration
Act) must take precedence over any other law for the time being in force.
Any intervention by the courts (including impounding an agreement in
which an arbitration clause is contained) is, therefore, permitted only if
the Arbitration Act provides for such a step, which it does not. Sections
33 and 35 cannot be allowed to operate in proceedings under Section 11
(or Section 8 as the case may be), in view of the non-obstante clause in
Section 5. This being the case, we are unable to agree with the decision in
N N Global 2 (supra), that the court in a proceeding under section 11 must
give eﬀect to Sections 33 and 35 of the Stamp Act despite the interdict in
Section 5. The court held:
“129. Section 5 no doubt provides for a non obstante clause. It provides
against judicial interference except as provided in the Act. The non
obstante clause purports to proclaim so despite the presence of any
law which may provide for interference otherwise. However, this does
not mean that the operation of the Stamp Act, in particular, Sections
33 and 35 would not have any play. We are of the clear view that the
purport of Section 5 is not to take away the eﬀect of Sections 33 and
35 of the Stamp Act. The Court under Section 11 purporting to give
eﬀect to Sections 33 and 35 cannot be accused of judicial interference
contrary to Section 5 of the Act.”

163 CDC Financial Services (Mauritius) Ltd. v. BPL Communications Ltd., (2003)
12 SCC 140; Empire Jute Co. Ltd. v. Jute Corpn. of India Ltd., (2007) 14 SCC
680; Associate Builders v. DDA, (2015) 3 SCC 49; Bhaven Construction v. Sardar
Sarovar Narmada Nigam Ltd., (2022) 1 SCC 75
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1175
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

175. Section 5 is eﬀectively rendered otiose by the interpretation given
to it in N N Global 2 (supra). The court failed to provide a reason for holding
that Section 5 of the Arbitration Act does not have the eﬀect of excluding
the operation of Sections 33 and 35 of the Stamp Act in proceedings under
Section 11 of the Arbitration Act. The non-obstante clause in Section 5
does precisely this. In addition to the eﬀect of the non-obstante clause, the
Arbitration Act is a special law. We must also be cognizant of the fact that
one of objectives of the Arbitration Act was to minimise the supervisory
role of courts in the arbitral process.164
176. In Hameed Joharan v. Abdul Salam,165 this Court made the
following observations on the interplay between the Stamp Act and the
Limitation Act 1963:
“38. … The intent of the legislature in engrafting the Limitation Act
shall have to be given its proper weightage. Absurdity cannot be the
outcome of interpretation by a court order and wherever there is even
a possibility of such absurdity, it would be a plain exercise of judicial
power to repel the same rather than encouraging it. The whole purport
of the Indian Stamp Act is to make available certain dues and to collect
revenue but it does not mean and imply overriding the eﬀect over
another statute operating in a completely diﬀerent sphere.”
c. Parliament was aware of the Stamp Act when it enacted the
Arbitration Act
177. Parliament was aware of the Stamp Act when it enacted the
Arbitration Act. Yet, the latter does not specify stamping as a pre-condition
to the existence of a valid arbitration agreement. Further, Section 11(6-A) of
the Arbitration Act requires the court to conﬁne itself to the examination of
the existence of the arbitration agreement. This provision stands in contrast
to Section 33(2) of the Stamp Act which also uses the word “examine.”
Section 33(2) requires the person before whom an instrument is produced,
to examine whether it is stamped with a stamp of the value and description
required by the law when such instrument was executed or ﬁrst executed.

164 Statements of Objects and Reasons, Arbitration Act
165 (2001) 7 SCC 573
1176 SUPREME COURT REPORTS [2023] 15 S.C.R.

Although Parliament was aware of the mandate of Section 33(2), it did not
require the court acting under Section 11 to also undertake the examination
required by Section 33(2).
ii. Harmonious construction of the three statutes under
consideration
a. The eﬀect of the competence-competence doctrine
178. In A. Ayyasamy v. A. Paramasivam,166 a two-judge Bench of this
Court of which one of us, DY Chandrachud, J, was a part emphasized that
arbitration must provide a “one-stop forum” for the resolution of disputes
and held that (a) Courts must give eﬀect to the commercial understanding
of parties to arbitration agreements that arbitration is eﬃcacious; and (b)
This can be done by minimising judicial intervention:
“48. The basic principle which must guide judicial decision-making is
that arbitration is essentially a voluntary assumption of an obligation by
contracting parties to resolve their disputes through a private tribunal.
The intent of the parties is expressed in the terms of their agreement.
Where commercial entities and persons of business enter into such
dealings, they do so with a knowledge of the eﬃcacy of the arbitral
process. The commercial understanding is reﬂected in the terms of the
agreement between the parties. The duty of the court is to impart to
that commercial understanding a sense of business eﬃcacy.
…
53. … Jurisprudence in India must evolve towards strengthening the
institutional eﬃcacy of arbitration. Deference to a forum chosen by
parties as a complete remedy for resolving all their claims is but part
of that evolution. Minimising the intervention of courts is again a
recognition of the same principle.”
(emphasis supplied)
179. The decision of the majority in N N Global 2 (supra) assumes that
the inadmissibility of the document in evidence renders it unenforceable.

166 (2016) 10 SCC 386
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1177
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

However, the eﬀect of the principle of competence-competence is that the
arbitral tribunal is vested with the power and authority to determine its
enforceability. The question of enforceability survives, pending the curing
of the defect which renders the instrument inadmissible. By appointing
a tribunal or its members, this Court (or the High Courts, as the case
may be) is merely giving eﬀect to the principle enshrined in Section 16.
The appointment of an arbitral tribunal does not necessarily mean that
the agreement in which the arbitration clause is contained as well as the
arbitration agreement itself are enforceable. The arbitral tribunal will answer
precisely these questions.
180. In terms of Section 10 of the Contract Act, agreements are
contracts if they are:
a. Made by the free consent of parties competent to contract;
b. For a lawful consideration;
c. With a lawful object; and
d. Not expressly declared to be void under its provisions.
181. These requirements do not aﬀect any law in force and not
expressly repealed, which:167
a. Requires contracts to be made in writing;
b. Requires contracts to be made in the presence of witnesses; or
c. Laws relating to the registration of documents.
182. In addition, Section 7 of the Arbitration Act specifies the
requirements for the existence of an arbitration agreement.
183. It is the arbitral tribunal and not the court which may test
whether the requirements of a valid contract and a valid arbitration
agreement are met. If the tribunal ﬁnds that these conditions are not
met, it will decline to hear the dispute any further. If it ﬁnds that a
valid arbitration agreement exists, it may assess whether the underlying
agreement is a valid contract.

167 Section 10, Contract Act
1178 SUPREME COURT REPORTS [2023] 15 S.C.R.

184. By enacting Section 16 of the Arbitration Act, Parliament has (in a
manner of speaking) permitted an agreement to arbitrate to be preliminarily
enforced even if it is only an agreement. After parties have been referred to
arbitration under Section 8 of the Arbitration Act or after the appointment of
arbitrators under Section 11 of the Arbitration Act the arbitral tribunal will
have jurisdiction to determine all questions and issues in dispute between the
parties. The legitimate concerns of the revenue in the realization of stamp
duty are not defeated because the arbitral tribunal has the jurisdiction to act
in pursuance of the provisions of the Stamp Act.
185. The corollary of the doctrine of competence-competence is that
courts may only examine whether an arbitration agreement exists on the
basis of the prima facie standard of review. The nature of objections to the
jurisdiction of an arbitral tribunal on the basis that stamp-duty has not been
paid or is inadequate is such as cannot be decided on a prima facie basis.
Objections of this kind will require a detailed consideration of evidence and
submissions and a ﬁnding as to the law as well as the facts. Obligating the
court to decide issues of stamping at the Section 8 or Section 11 stage will
defeat the legislative intent underlying the Arbitration Act.
186. The purpose of vesting courts with certain powers under
Sections 8 and 11 of the Arbitration Act is to facilitate and enable
arbitration as well as to ensure that parties comply with arbitration
agreements. The disputes which have arisen between them remain the
domain of the arbitral tribunal (subject to the scope of its jurisdiction as
deﬁned by the arbitration clause). The exercise of the jurisdiction of the
courts of the country over the substantive dispute between the parties is
only possible at two stages:
a. If an application for interim measures is ﬁled under Section 9 of
the Arbitration Act; or
b. If the award is challenged under Section 34.
Issues which concern the payment of stamp-duty fall within the remit
of the arbitral tribunal. The discussion in the preceding segments also
make it evident that courts are not required to deal with the issue of
stamping at the stage of granting interim measures under Section 9.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1179
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

187. One of the intervenors, the Singapore International Arbitration
Centre, submitted that the decision in N N Global 2 (supra) reversed the
prima facie standard by observing that the court may refer a dispute to the
arbitral tribunal if objections as to its being duly stamped are “on the face
of it, wholly without foundation.” We agree with this submission.
188. Once the arbitral tribunal has been appointed, it will act in
accordance with law and proceed to impound the agreement under
Section 33 of the Stamp Act if it sees ﬁt to do so. It has the authority to
receive evidence by consent of the parties, in terms of Section 35. The
procedure under Section 35 may be followed thereafter. In this manner, the
competence-competence doctrine is given life and arbitration proceedings
can continue to remain a faster alternative to suits before the trial courts
or other, similar actions.
b. The eﬀect of the word “shall” in Sections 33 and 35 of the
Stamp Act
189. Sections 33 and 35 of the Stamp Act use the word “shall.” While
this ordinarily indicates that the provision is mandatory, it may be read as
directory. In Sainik Motors v. State of Rajasthan, 168 this Court held:
“The word ‘shall’ is ordinarily mandatory, but it is sometimes not so
interpreted if the context or the intention otherwise demands.”
190. In State of U.P. v. Babu Ram Upadhya,169 this Court held that
the principles for the construction of statutes which used the mandatory
word “shall” were as follows:
“29. The relevant rules of interpretation may be brieﬂy stated thus :
When a statute uses the word “shall”, prima facie, it is mandatory,
but the Court may ascertain the real intention of the legislature by
carefully attending to the whole scope of the statute. For ascertaining
the real intention of the Legislature the Court may consider, inter
alia, the nature and the design of the statute, and the consequences
which would follow from construing it the one way or the other, the

168 1961 SCC OnLine SC 15
169 1960 SCC OnLine SC 5
1180 SUPREME COURT REPORTS [2023] 15 S.C.R.

impact of other provisions whereby the necessity of complying with
the provisions in question is avoided, the circumstance, namely, that
the statute provides for a contingency of the non-compliance with the
provisions, the fact that the non-compliance with the provisions is or
is not visited by some penalty, the serious or trivial consequences that
ﬂow therefrom, and, above all, whether the object of the legislation
will be defeated or furthered.”
191. This Court must therefore interpret Sections 33 and 35 to assess
whether they are mandatory in relation to a court presiding over proceedings
under Section 8 or Section 11 by examining:
a. Whether the context indicates that the provision is directory;
b. The scope of the statute;
c. The nature and design of the statute;
d. The consequences which would follow from construing it one
way or another;
e. The impact of other provisions;
f. The consequences of non-compliance; and
g. Whether the object of the legislation will be furthered or
destroyed.
192. The decisions adverted to in the preceding paragraphs were
delivered in the context of a single provision in a single statute. Additional
factors must be considered in cases such as the present one, where multiple
statutes appear to operate in relation to a single issue (or a single agreement
such as the arbitration agreement in the present case). To this list of
considerations which must animate the court’s evaluation of whether a
provision is mandatory or directory, we would add that the scope, nature,
and design of all the statutes which appear to operate simultaneously must
be considered. Their interplay and the intention of the legislature must be
evaluated in the context of all such statutes. The question of whether the
object(s) of the applicable legislation(s) will be furthered or destroyed must
also be considered in view of all such statutes.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1181
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

c. The object of the Stamp Act is preserved
193. In N N Global 2 (supra), the majority judgment observed as
follows:
“92. While the Stamp Act is a ﬁscal enactment intended to raise
revenue, it is a law, which is meant to have teeth. The point of time, at
which the stamp duty is to be paid is expressly provided for in Section
17 of the Stamp Act. There cannot be any gainsaying, that call it a
ﬁscal enactment, it is intended that it is to be implemented with full
vigour. The duty of a Court must be to adopt an interpretation which
results in the enforcement of the law, rather than allowing the law to
be ﬂouted with impunity. Once this principle is borne in mind, the task
of the Court becomes less diﬃcult.”
194. The interpretation accorded to the Stamp Act by this Court in the
present judgment does not allow the law to be ﬂouted. The arbitral tribunal
continues to be bound by the provisions of the Stamp Act, including those
relating to its impounding and admissibility. The interpretation of the law
in this judgment ensures that the provisions of the Arbitration Act are given
eﬀect to while not detracting from the purpose of the Stamp Act.
195. The interests of revenue are not jeopardised in any manner because
the duty chargeable must be paid before the agreement in question is rendered
admissible and the lis between the parties adjudicated. The question is at
which stage the agreement would be impounded and not whether it would
be impounded at all. The courts are not abdicating their duty but are instead
giving eﬀect to:
a. The principle of minimal judicial intervention in Section 5 of the
Arbitration Act;
b. The prima facie standard applicable to Sections 8 and 11 of the
Arbitration Act; and
c. The purpose of the Stamp Act which is to protect the interests of
revenue and not arm litigants with a weapon of technicality by
which they delay the adjudication of the lis.
d. The interpretation of the law must give eﬀect to the purpose
of the Arbitration Act in addition to the Stamp Act
1182 SUPREME COURT REPORTS [2023] 15 S.C.R.

196. The decision of the Constitution Bench in N N Global 2
(supra) gives eﬀect exclusively to the purpose of Stamp Act. It prioritises
the objective of the Stamp Act, i.e., to collect revenue at the cost of the
Arbitration Act. As discussed previously, the purpose of the Arbitration Act is
to ensure that a speedy and eﬃcacious alternative dispute resolution system
is available to parties both commercial and otherwise. This purpose is in
danger of being undermined by the interpretation accorded to the Stamp Act
in N N Global 2 (supra). The impounding of an agreement which contains
an arbitration clause at the stage of the appointment of an arbitrator under
Section 11 (or Section 8 as the case may be) of the Arbitration Act will delay
the commencement of arbitration. It is a well-known fact that courts are
burdened with innumerable cases on their docket. This has the inevitable
consequence of delaying the speed at which each case progresses. Arbitral
tribunals, on the other hand, deal with a smaller volume of cases. They are
able to dedicate extended periods of time to the adjudication of a single
case before them. If an agreement is impounded by the arbitral tribunal in
a particular case, it is far likelier that the process of payment of stamp-duty
and a penalty (if any) and the other procedures under the Stamp Act are
completed at a quicker pace than before courts.
J*. SMS Tea Estates and Garware Wall Ropes were wrongly decided
i. SMS Tea Estates
197. The genesis of the present issue stems from a two-Judge Bench
decision of this Court in SMS Tea Estates (supra). In that case, the appellant
and respondent executed a lease deed with respect to two tea estates in favor of
the appellant. The lease deed provided for the settlement of disputes between
the parties by arbitration. When the appellant sought to invoke the arbitration
clause, the respondent opposed the same on the ground that the lease deed was
unregistered and not duly stamped, and was therefore invalid, unenforceable,
and not binding. The High Court dismissed the appellant’s application for the
appointment of an arbitrator. On appeal, inter alia the following issues came
for consideration before this Court: ﬁrst, whether an arbitration agreement
contained in an unregistered (but compulsorily registerable) instrument is
valid and enforceable; and second, whether an arbitration agreement in an
unregistered instrument which is not duly stamped, is valid and enforceable.
198. With regard to the ﬁrst issue, the Court analysed Section 49 of
the Registration Act. Section 49 of the Registration Act provides that an
* Ed. Note: PART J
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1183
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

unregistered document cannot be received as evidence of any transaction
affecting such property or conferring such power unless it has been
registered. However, the proviso to Section 49 provides that an unregistered
instrument can be used as evidence of any collateral transaction not required
to be eﬀected by such instrument. In view of the aforesaid provision, this
Court held that an arbitration agreement contained in an unregistered
instrument is a collateral term relating to the resolution of disputes, which
was unrelated to the performance of the contract. Therefore, it was held
that an arbitration agreement contained in an unregistered but compulsorily
registerable document can be acted upon and enforced for the purpose of
dispute resolution by arbitration.
199. With regard to the second issue, it was noted that Section 35 of
the Stamp Act does not contain a proviso like Section 49 of the Registration
Act enabling the unstamped instrument to be used for a collateral purpose.
Thereafter, this Court observed that Section 33 casts a duty upon every
court, as also an arbitrator, before whom an unregistered instrument
chargeable with stamp duty is produced to examine the instrument in order
to ascertain whether it is duly stamped. If the Court or arbitrator comes to
the conclusion that the instrument is not duly stamped, it has to necessarily
impound the document. The Court laid down the procedure to be adopted
when an arbitration is contained in a document which is not duly stamped
in the following terms:
a. The Court should, before admitting any document into evidence
or acting upon such document, examine whether the instrument/
document is duly stamped and whether it is an instrument which
is compulsorily registerable.
b. If the document is found to be not duly stamped, Section 35
of the Stamp Act bars the said document being acted upon.
Consequently, even the arbitration clause therein cannot be acted
upon. The court should then proceed to impound the document
under Section 33 of the Stamp Act and follow the procedure
under Sections 35 and 38 of the Stamp Act.
c. If the document is found to be duly stamped, or if the deﬁcit
stamp duty and penalty is paid, either before the court or before
1184 SUPREME COURT REPORTS [2023] 15 S.C.R.

the Collector (as contemplated in Section 35 of Section 49 of
the Stamp Act), and the defect with reference to deﬁcit duty is
cured, the court may treat the document as duly stamped.
200. SMS Tea Estates (supra) allowed the courts to impound the
document under Section 33 of the Stamp Act at the Section 11 stage. Thus,
the courts were mandated to intervene at the pre-arbitral stage before the
arbitral tribunal could assume jurisdiction. SMS Tea Estates (supra) was
decided in 2011. At that time, Patel Engineering (supra) and Boghara
Polyfab (supra) held the ﬁeld, which held that the referral courts had
wide powers to decide a large number of preliminary issues, including
the existence and validity of arbitration agreements. As discussed in the
segments above, the Law Commission of India recommended amendments to
Sections 8 and 11 with a view to restrict the scope of the judicial intervention
“to situations where the Court/Judicial Authority ﬁnds that the arbitration
agreement does not exist or is null and void.”
201. Pursuant to the recommendations of the Law Commission of
India, Parliament incorporated Section 11(6A) which clariﬁed that the scope
of judicial intervention was limited to the examination of the existence
of an arbitration agreement. The legislative note on Clause 11(6A) states
that “[s]ub-section (6A) is inserted to provide that the Supreme Court or
the High Court while considering applications under sub-section (4) to
(6) shall conﬁne to the examination of an arbitration agreement.” More
importantly, the said provision contains a non-obstante clause which reads:
“notwithstanding any judgment, decree or order of any Court.”
202. In Emmar MGF Land Ltd. v. Aftab Singh,170 this Court was
examining the purport of Section 8 which included a similar non-obstante
clause as contained in Section 11(6A). This Court explained the purpose
of the non-obstante clause contained in Section 8 in the following terms:
“52. […] The words “notwithstanding any judgment, decree or order
of the Supreme Court or any court” added by amendment in Section
8 were with intent to minimise the intervention of judicial authority in
the context of arbitration agreement. As per the amended Section 8(1),

170 (2019) 12 SCC 751
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1185
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

the judicial authority has only to consider the question “whether the
parties have a valid arbitration agreement?” The Court cannot refuse
to refer the parties to arbitration “unless it ﬁnds that prima facie no
valid arbitration agreement exists”. The amended provision, thus, limits
the intervention by judicial authority to only one aspect i.e. refusal by
judicial authority to refer is conﬁned to only one aspect, when it ﬁnds
that prima facie no valid arbitration agreement exists.”
203. In Emmar MGF Land (supra), this Court clariﬁed that the
expression “notwithstanding any judgment” referred to in Section 8(1)
relates to those judicial precedents which explained the discretion and power
of judicial authority to examine various aspects while exercising powers
under Section 8. In a similar vein, Section 11(6A) intended to minimize
judicial interference to the examination of the existence of an arbitration
agreement. Accordingly, the non-obstante clause contained in Section
11(6A) pertains to those judicial precedents which delved into the discretion
and power of referral courts to intervene and examine the existence and
validity of an arbitration agreement at the Section 11 stage. This includes
SMS Tea Estates (supra) considering the fact that it mandated the referral
court to judicially intervene in the arbitration process by impounding the
unstamped instrument containing the arbitration agreement. Therefore, we
hold that Section 11(6A) also legislatively altered the basis of SMS Tea
Estates (supra) to the extent that it dealt with judicial intervention at the
Section 11 stage.
ii. Garware Wall Ropes
204. In Garware Wall Ropes (supra), a Bench of two Judges of this
Court was called upon to decide the eﬀect of an arbitration clause contained
in a contract which requires to be stamped. Since SMS Tea Estates (supra)
was decided before the introduction of Section 11(6A) of the Arbitration Act,
another pertinent issue before this Court was whether introduction of this
provision removed the basis for the decision in SMS Tea Estates (supra)
to the extent that an unstamped instrument could be impounded not by the
referral court under Section 11 but by the arbitrator. This Court held that
the referral court under Section 11(6A) would be bound by the mandatory
provisions of the Stamp Act to examine and impound the unstamped
instrument. It was further observed that since the Stamp Act applied to the
1186 SUPREME COURT REPORTS [2023] 15 S.C.R.

instrument as a whole, it was not possible to bifurcate the arbitration clause
contained in such instrument and give it an independent existence.
205. This Court in Garware Wall Ropes (supra) further analysed the
purport of the word “existence” contained in Section 11 of the Arbitration
Act. It was held that an arbitration agreement contained in an unstamped
instrument would not exist in law. The relevant paragraph is extracted below:
“22. When an arbitration clause is contained “in a contract”, it
is signiﬁcant that the agreement only becomes a contract if it is
enforceable by law. We have seen how, under the Stamp Act, an
agreement does not become a contract, namely, that it is not enforceable
in law, unless it is duly stamped. Therefore, even a plain reading of
section 11(6-A), when read with Section 7(2) of the 1996 Act and
Section 2(h) of the Contract Act, would make it clear that an arbitration
clause in an agreement would not exist when it is not enforceable by
law. This is also an indicator that SMS Tea Estates has, in no manner,
been touched by the amendment of Section 11(6-A).”
206. Further, this Court noted Section 11(13) of the Arbitration Act
which provides a timeline of sixty days for disposal of any application for
appointment of an arbitrator. In view of Section 11(13), this Court held
that the provisions of the Stamp Act and the Arbitration Act need to be
harmoniously construed. Accordingly, the Court held that once the High
Court impounds an unstamped instrument at the Section 11 stage, it shall
hand it over to the relevant authority under the Maharashtra Stamp Act to
be decided within a period of forty-ﬁve days from which such authority
receives the instrument. Once the stamp duty and penalty was paid, the
High Court could proceed expeditiously to hear and dispose of the Section
11 application.
207. The conclusions of this Court in Garware Wall Ropes (supra) can
be summarized as follows: ﬁrst, there was no legislative intent to overrule
SMS Tea Estates (supra) because neither the Statement of Objects and
Reasons of the 2015 Amendment Act nor the Law Commission of India
Report, 2014 mentions it; second, the referral court at the Section 11 stage
is only giving eﬀect to the provisions of the Stamp Act and not deciding any
preliminary issues between the parties; third, the separability presumption
could only be applied for limited purposes. Since the Stamp Act applies
to the instrument as a whole, it is not possible to bifurcate the arbitration
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1187
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

clause contained in such agreement; and fourth, an arbitration clause in an
unstamped contract would not exist, leading to the conclusion that Section
11(6A) has not overruled SMS Tea Estates (supra).
208. The Statement of Objects and Reasons of the 2015 Amendment
Act are as follows:
“(iii) an application for appointment of an arbitrator shall be disposed
of by the High Court or Supreme Court, as the case may be, as
expeditiously as possible and an endeavour should be made to dispose
of the matter within a period of sixty days.
“(iv) to provide that while considering any application for appointment
of arbitrator, the High Court or the Supreme Court shall examine the
existence of a prima facie arbitration agreement and not other issues.”
209. The above extract indicates that the Supreme Court or High Court
at the stage of the appointment of an arbitrator shall “examine the existence
of a prima facie arbitration agreement and not other issues”. These other
issues not only pertain to the validity of the arbitration agreement, but also
include any other issues which are a consequence of unnecessary judicial
interference in the arbitration proceedings. Accordingly, the “other issues”
also include examination and impounding of an unstamped instrument by the
referral court at the Section 8 or Section 11 stage. The process of examination,
impounding, and dealing with an unstamped instrument under the Stamp Act
is not a time-bound process, and therefore does not align with the stated goal
of the Arbitration Act to ensure expeditious and time-bound appointment of
arbitrators. Therefore, even though the Law Commission of India Report or
the Statement of Objects and Reasons of the 2015 Amendment Act do not
speciﬁcally refer to SMS Tea Estates (supra), it nevertheless does not make
any diﬀerence to the position of law as has been set out above.
210. Garware Wall Ropes (supra) relied on Patel Engineering (supra)
to observe that “it is diﬃcult to accede to the argument made by the learned
counsel on behalf of the respondent that Section 16 makes it clear that an
arbitration agreement has an independent existence of its own, and must be
applied while deciding an application under Section 11 of the 1996 Act.”
In view of this observation, it was held that the separability presumption
cannot be applied in case of an unstamped instrument because the Stamp
Act applies to the instrument as a whole. As discussed in the preceding
segments, the separability presumption ensures the validity of an arbitration
1188 SUPREME COURT REPORTS [2023] 15 S.C.R.

agreement notwithstanding the invalidity, illegality, or non-existence of the
underlying contract.
211. The scope of authority of an arbitral tribunal under Section 16 is
wide because it can deal with issues pertaining to the existence and validity
of an arbitration agreement. In his dissenting opinion in NN Global 2 (supra),
Justice Roy correctly observes that since “[s]ection 16 speciﬁcally deals with
both existence and validity whereas Section 11 only deals with existence, the
former should be given more weight.” This observation comports with the
stated goal of the Arbitration Act to minimize the supervisory role of courts
in the arbitral process. Post the 2015 Amendment Act the referral courts
are only required to prima facie determine the existence or validity of an
arbitration agreement. The basis for such prima facie determination lies in
the fact that the arbitral tribunal will later have the competence to rule on
the issue of existence and validity of the arbitration agreement. Therefore,
the separability presumption applies at the referral stage.
212. In Intercontinental Hotels Group (India) (P) Ltd v. Waterline
Hotels (P) Ltd.,171 the issue before a Bench of three Judges of this Court
in a Section 11 application was: whether the court can proceed to appoint
an arbitrator when the underlying contract is incorrectly stamped. In that
case, it was observed that although “stamp duty has been paid, whether it
be insuﬃcient or appropriate is a question that may be answered at a later
stage as this Court cannot review or go into this aspect under Section 11(6).”
213. The discussion in preceding segments has held that non-stamping
or insuﬃcient stamping of an instrument does not render it invalid or non-
existent. Therefore, paragraphs 22 and 29 of Garware Wall Ropes (supra),
which held that an arbitration agreement contained in an unstamped or
insuﬃciently stamped contract would be non-existent in law, does not set
forth the correct position of law.
K*. The Appointment of Arbitrators by the Chief Justice of India
Scheme, 1996
214. In N N Global 2 (supra), the majority considered the Appointment
of Arbitrators by the Chief Justice of India Scheme, 1996.172 Para 2 of the
1996 Scheme reads as follows:

* Ed. Note: PART K
171 (2022) 7 SCC 662
172 “1996 Scheme”
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1189
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

“2. Submission of request.- The request to the Chief Justice under
sub-section (4) or sub-section (5) or sub-section (6) of section 11 shall
be made in writing and shall be accompanied by-
(a) the original arbitration agreement or a duly certiﬁed copy thereof;
The 1996 Scheme provides that an application under Section 11 for
the appointment of an arbitrator shall be accompanied by the original
arbitration agreement or a duly certiﬁed copy.
215. In SMS Tea Estates (supra), it was observed that a certiﬁed
copy of the agreement/ contract/ instrument containing the arbitration
clause should disclose the stamp duty that has been paid on the original. N
N Global 2 (supra) has endorsed this view. In that case, this Court further
referred to paragraph 5 of the 1996 Scheme which allows the Chief Justice
or the person or the institution designated by him under para 3 to seek
further information or clariﬁcation from the party making request under the
Scheme. Consequently, it was held that a Judge dealing with an application
under Section 11 could seek further clariﬁcation or information with respect
to the payment of stamp duty to satisfy the requirements as laid down in
SMS Tea Estates (supra).
216. N N Global 2 (supra) also refers to the two-Judge Bench decision
of this Court in Jupudi Kesava Rao v. Pulavarthi Venkata Subbarao173
where it was held that Section 35 of the Stamp Act renders any secondary
evidence of an unstamped or insuﬃciently stamped instrument inadmissible
in evidence. It was further held that any secondary evidence of such
instrument cannot be acted upon in terms of Section 35. Subsequently, a
three-Judge Bench of this Court in Hariom Agrawal v. Prakash Chand
Malviya 174 affirmed Jupudi Kesava Rao (supra) by observing that
Sections 33 and 35 of the Stamp Act are not concerned with any copy of
the instrument. The relevant paragraph is extracted below:
“10. It is clear from the decisions of this Court and a plain reading
of Sections 33, 35 and 2(14) of the Act that an instrument which
is not duly stamped can be impounded and when the required fee
and penalty has been paid for such instrument it can be taken in

173 (1971) 1 SCC 545
174 (2007) 8 SCC 514
1190 SUPREME COURT REPORTS [2023] 15 S.C.R.

evidence under Section 35 of the Stamp Act. Sections 33 or 35 are
not concerned with any copy of the instrument and party can only be
allowed to rely on the document which is an instrument within the
meaning of Section 2(14). There is no scope for the inclusion of the
copy of the document for the purposes of the Stamp Act. Law is now
no doubt well settled that copy of the instrument cannot be validated
by impounding and this cannot be admitted as secondary evidence
under the Stamp Act, 1899.”
217. An arbitration agreement or its certiﬁed copy is not rendered
void or unenforceable because it is unstamped or insuﬃciently stamped.
We accordingly clarify that the position of law laid down in Jupudi Kesava
Rao (supra) and Hariom Agrawal (supra) cannot constrain a referral court
at Section 11 stage (as well as Section 8 stage) from acting upon a certiﬁed
copy of an arbitration agreement and referring the parties to arbitral tribunal.
218. The discussion in preceding segments indicates that the referral
court at Section 11 stage should not examine or impound an unstamped or
insuﬃciently stamped instrument, but rather leave it for the determination by
the arbitral tribunal. When a party produces an arbitration agreement or its
certiﬁed copy, the referral court only has to examine whether an arbitration
agreement exists in terms of Section 7 of the Arbitration Act. The referral
court under Section 11 is not required to examine whether a certiﬁed copy
of the agreement/ instrument/ contract discloses the fact of payment of
stamp duty on the original. Accordingly, we hold that the holding of this
Court in SMS Tea Estate (supra), as reiterated in N N Global 2 (supra), is
no longer valid in law.
L*. Vidya Drolia does not deal with the issue of stamping
219. The genesis of these proceedings lies in N N Global 1 (supra)
doubting the correctness of the ﬁnding in Vidya Drolia (supra). N N Global
1 (supra) doubted the correctness of the view taken in paragraphs 146 and
147 of the co-ordinate Bench in Vidya Drolia (supra), where the three-Judge
Bench relied on Garware Wall Ropes (supra).
220. In paragraph 146, this Court was dealing with the issue of
whether the expression “existence” as contained in Section 11(6A) also
presupposes the validity of an arbitration agreement. The Court answered
this proposition by observing that an arbitration agreement “exists” only
* Ed. Note: PART L
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1191
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [DR. DHANANJAYA Y CHANDRACHUD, CJI ]

when it is valid and enforceable. Accordingly, it was held that existence of
an arbitration agreement means an arbitration agreement which satisﬁes
the requirements of both the Arbitration Act and the Contract Act. In the
succeeding paragraphs, this Court sought to reinforce its conclusion. In the
process, it referred to various precedents of this Court including Garware
Wall Ropes (supra).
221. Paragraph 147.1 clariﬁes that it is referring to Garware Wall
Ropes (supra) only for the purposes of establishing the correlation between
existence and validity of an arbitration agreement. The relevant paragraph of
Garware Wall Ropes (supra) refers to United India Insurance Co. Ltd. v.
Hyundai Engg. & Construction Co. Ltd.175 in which the arbitration clause
was triggered only if one of the parties admitted or accepted its liability. In
that case, since the relevant party (the insurer) did not accept its liability, the
court held that the arbitration clause did not exist in law although it existed
in fact. Garware Wall Ropes (supra) relied on Hyundai Engg. (supra) to
hold, albeit incorrectly, that an unstamped agreement would not exist as a
matter of law until the underlying instrument is duly stamped. We are of
the opinion that Vidya Drolia (supra) did not, in any manner, determine
the eﬀect of an unstamped or insuﬃciently stamped underlying contract on
an arbitration agreement. It referred to Garware Wall Ropes (supra) only
to buttress its interpretation that an arbitration agreement does not exist if
it is invalid or illegal, which has been clariﬁed in the above segments of
this judgment.
222. Signiﬁcantly, a two-Judge Bench of this Court in Career Institute
Educational Society v. Om Shree Thakurji Educational Society176
clariﬁed that Vidya Drolia (supra) referred to Garware Wall Ropes (supra)
only “to interpret the word ‘existence’, and whether an ‘invalid’ arbitration
agreement can be said to exist” The two-Judge Bench further clariﬁed that
Vidya Drolia (supra) did not decide the issue of the eﬀect of an unstamped
or insuﬃciently stamped underlying contract on the arbitration clause. The
relevant extract is as follows:
“3. The judgement in Vidya Drolia v. Durga Trading Corporation did
not examine and decide the issue of eﬀect of unstamped or under-

175 (2018) 17 SCC 607
176 2023 SCC OnLine SC 586
1192 SUPREME COURT REPORTS [2023] 15 S.C.R.

stamped underlying contract on the arbitration agreement. As this
issue and question has not been decided in Vidya Drolia (supra), the
decision is not a precedent on this question.”
223. We agree with these observations in Career Institute
Educational Society (supra). Vidya Drolia (supra) did not deal with the
issue of the eﬀect of an unstamped or insuﬃciently stamped instrument on
the existence or validity of an arbitration agreement. Therefore, the reasoning
in Vidya Drolia (supra) does not lead to the conclusion that Garware Wall
Ropes (supra) was rightly decided either on the aspect of examination
and impounding of unstamped or insuﬃciently stamped instrument with
respect to arbitration proceedings, or the validity of on arbitration agreement
contained in an unstamped or insuﬃciently stamped underlying contract.
M*. Conclusions
224. The conclusions reached in this judgment are summarised below:
a. 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;
b. Non-stamping or inadequate stamping is a curable defect;
c. 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;
d. Any objections in relation to the stamping of the agreement fall
within the ambit of the arbitral tribunal; and
e. The decision in NN Global 2 (supra) and SMS Tea Estates (supra)
are overruled. Paragraphs 22 and 29 of Garware Wall Ropes
(supra) are overruled to that extent.
225. The Registry is directed to take administrative directions from
Hon’ble Chief Justice of India for placing the matters before an appropriate
Bench.

* Ed. Note: PART M
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1193
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

SANJIV KHANNA, J.
I respectfully agree with the view expressed by the Hon’ble the Chief
Justice of India Dr. D.Y. Chandrachud in his elaborate exposition of the
diﬀerent contours which arise for consideration in the present reference.
Complementing the same, I would like to provide additional justiﬁcations
for the ﬁnal conclusion,viz., unstamped or insuﬃciently stamped instruments
inadmissible in evidence in terms of Section 35 of the Indian Stamp Act, 18991,
are not rendered void and void ab initio; an objection as to the under-stamping
or non-stamping of the underlying contract will not have any bearing when
the prima facie test, “the existence of arbitration agreement”, is applied by the
courts while deciding applications under Sections 82 or 113 of the Arbitration

1 For short, “the Stamp Act”
2 8. Power to refer parties to arbitration where there is an arbitration agreement.—
(1) A judicial authority, before which an action is brought in a matter which is the
subject of an arbitration agreement shall, if a party to the arbitration agreement or any
person claiming through or under him, so applies not later than the date of submitting
his ﬁrst statement on the substance of the dispute, then, notwithstanding any judgment,
decree or order of the Supreme Court or any court, refer the parties to arbitration unless
it ﬁnds that prima facie no valid arbitration agreement exists.
(2) The application referred to in sub-section (1) shall not be entertained unless it is
accompanied by the original arbitration agreement or a duly certiﬁed copy thereof.
Provided that where the original arbitration agreement or a certiﬁed copy thereof is
not available with the party applying for reference to arbitration under sub-section
(1), and the said agreement or certiﬁed copy is retained by the other party to that
agreement, then, the party so applying shall ﬁle such application along with a copy of
the arbitration agreement and a petition praying the court to call upon the other party to
produce the original arbitration agreement or its duly certiﬁed copy before that court.
(3) Notwithstanding that an application has been made under sub-section (1) and that
the issue is pending before the judicial authority, an arbitration may be commenced or
continued and an arbitral award made.
3 11. Appointment of arbitrators.—(1) A person of any nationality may be an arbitrator,
unless otherwise agreed by the parties.
(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing
the arbitrator or arbitrators.
(3) Failing any agreement referred to in sub-section (2), in an arbitration with three
arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators
shall appoint the third arbitrator who shall act as the presiding arbitrator.
(4) If the appointment procedure in sub-section (3) applies and—
(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request
to do so from the other party; or
(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days
from the date of their appointment, the appointment shall be made, upon request of a
1194 SUPREME COURT REPORTS [2023] 15 S.C.R.

party, by 1[the Supreme Court or, as the case may be, the High Court or any person or
institution designated by such Court];
(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole
arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of
a request by one party from the other party to so agree the appointment shall be made,
upon request of a party, by the Supreme Court or, as the case may be, the High Court
or any person or institution designated by such Court.
(6) Where, under an appointment procedure agreed upon by the parties,—
(a) a party fails to act as required under that procedure; or
(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of
them under that procedure; or
(c) a person, including an institution, fails to perform any function entrusted to him
or it under that procedure, a party may request the Supreme Court or, as the case may
be, the High Court or any person or institution designated by such Court to take the
necessary measure, unless the agreement on the appointment procedure provides other
means for securing the appointment.
(6A) The Supreme Court or, as the case may be, the High Court, while considering
any application under sub-section (4) or sub-section (5) or sub-section (6), shall,
notwithstanding any judgment, decree or order of any Court, conﬁne to the examination
of the existence of an arbitration agreement.
(6B) The designation of any person or institution by the Supreme Court or, as the case
may be, the High Court, for the purposes of this section shall not be regarded as a
delegation of judicial power by the Supreme Court or the High Court.
(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-
section (6) to the Supreme Court or, as the case may be, the High Court or the person
or institution designated by such Court is ﬁnal and no appeal including Letters Patent
Appeal shall lie against such decision.
(8) The Supreme Court or, as the case may be, the High Court or the person or institution
designated by such Court, before appointing an arbitrator, shall seek a disclosure in
writing from the prospective arbitrator in terms of sub-section (1) of section 12, and
have due regard to—
(a) any qualiﬁcations required for the arbitrator by the agreement of the parties; and
(b) the contents of the disclosure and other considerations as are likely to secure the
appointment of an independent and impartial arbitrator.
(9) In the case of appointment of sole or third arbitrator in an international commercial
arbitration, the Supreme Court or the person or institution designated by that Court]
may appoint an arbitrator of a nationality other than the nationalities of the parties
where the parties belong to diﬀerent nationalities.
(10) The Supreme Court or, as the case may be, the High Court, may make such
scheme as the said Court may deem appropriate for dealing with matters entrusted by
sub-section (4) or sub-section (5) or sub-section (6), to it.
(11) Where more than one request has been made under sub-section (4) or sub-section
(5) or sub-section (6) to the Chief Justices of diﬀerent High Courts or their designates,
diﬀerent High Courts or their designates, the High Court or its designate to whom the
request has been ﬁrst made] under the relevant sub-section shall alone be competent
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1195
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

and Conciliation Act, 19964; and an objection as to insuﬃcient stamping of the
underlying agreement can be examined and decided by the arbitral tribunal.
Accordingly, the majority decision of the Constitution Bench in N.N. Global
Mercantile (P) Ltd. v. Indo Unique Flame Ltd.5 should be overruled.
2. The judgment authored by Hon’ble the Chief Justice, under the
heading ‘D. Indian Stamp Act, 1899’, gives an overall view of the Stamp
Act, and the procedures it prescribes. It also refers to Sections 33, 35and 36
of the Stamp Act, which I would like to elaborate on and elucidate.
3. Sections 33 and 35 of the Stamp Act are reproduced for reference:
“33. Examination and impounding of instruments.—(1) Every
person having by law or consent of parties authority to receive
evidence, and every person in charge of a public oﬃce, except an
oﬃcer of police, before whom any instrument, chargeable, in his
opinion, with duty, is produced or comes in the performance of his

to decide on the request.
(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-
section (10) arise in an international commercial arbitration, the reference to the
“Supreme Court or, as the case may be, the High Court” in those sub-sections shall be
construed as a reference to the “Supreme Court”; and
(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and sub-section
(10) arise in any other arbitration, the reference to “the Supreme Court or, as the case
may be, the High Court” in those sub-sections shall be construed as a reference to the
“High Court” within whose local limits the principal Civil Court referred to in clause
(e) of sub-section (1) of section 2 is situate, and where the High Court itself is the
Court referred to in that clause, to that High Court.
(13) An application made under this section for appointment of an arbitrator or
arbitrators shall be disposed of by the Supreme Court or the High Court or the person
or institution designated by such Court, as the case may be, as expeditiously as possible
and an endeavour shall be made to dispose of the matter within a period of sixty days
from the date of service of notice on the opposite party.
(14) For the purpose of determination of the fees of the arbitral tribunal and the manner
of its payment to the arbitral tribunal, the High Court may frame such rules as may be
necessary, after taking into consideration the rates speciﬁed in the Fourth Schedule.
Explanation.—For the removal of doubts, it is hereby clariﬁed that this sub-section
shall not apply to international commercial arbitration and in arbitrations (other
than international commercial arbitration) in case where parties have agreed for
determination of fees as per the rules of an arbitral institution.
4 For short, “the Arbitration Act”.
5 (2023) 7 SCC 1.
1196 SUPREME COURT REPORTS [2023] 15 S.C.R.

functions, shall, if it appears to him that such instrument is not duly
stamped, impound the same.
(2) For that purpose every such person shall examine every instrument
so chargeable and so produced or coming before him, in order
to ascertain whether it is stamped with a stamp of the value and
description required by the law in force in India when such instrument
was executed or ﬁrst executed:
Provided that—
(a) nothing herein contained shall be deemed to require any Magistrate
or Judge of a Criminal Court to examine or impound, if he does not
think ﬁt so to do, any instrument coming before him in the course of
any proceeding other than a proceeding under Chapter XII or Chapter
XXXVI of the Code of Criminal Procedure, 1898 (5 of 1898);
(b) in the case of a Judge of a High Court, the duty of examining and
impounding any instrument under this section may be delegated to
such oﬃcer as the Court appoints in this behalf.
(3) For the purposes of this section, in cases of doubt,—
(a) the State Government may determine what oﬃces shall be deemed
to be public oﬃces; and
(b) the State Government may determine who shall be deemed to be
persons in charge of public oﬃces.”
×× ×× ××
35.Instruments not duly stamped inadmissible in evidence, etc.—
No instrument chargeable with duty shall be admitted in evidence for
any purpose by any person having by law or consent of parties authority
to receive evidence, or shall be acted upon, registered or authenticated
by any such person or by any public oﬃcer, unless such instruments
is duly stamped:
Provided that—
(a) any such instrument shall be admitted in evidence on payment of the
duty with which the same is chargeable or, in the case of an instrument
insuﬃciently stamped, of the amount required to make up such duty,
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1197
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

together with a penalty of ﬁve rupees, or, when ten times the amount
of the proper duty or deﬁcient portion thereof exceeds ﬁve rupees, of
a sum equal to ten times such duty or portion;
(b) where any person from whom a stamped receipt could have been
demanded, has given an unstamped receipt and such receipt, if stamped,
would be admissible in evidence against him, then such receipt shall
be admitted in evidence against him on payment of a penalty of one
rupee by the person tendering it;
(c) where a contract or agreement of any kind is effected by
correspondence consisting of two or more letters and any one of the
letters bears the proper stamp, the contract or agreement shall be
deemed to be duly stamped;
(d) nothing herein contained shall prevent the admission of any
instrument in evidence in any proceeding in a Criminal Court, other
than a proceeding under Chapter XII or Chapter XXXVI of the Code
of Criminal Procedure, 1898 (5 of 1898);
(e) nothing herein contained shall prevent the admission of any
instrument in any Court when such instrument has been executed by
or on behalf of the Government or where it bears the certiﬁcate of the
Collector as provided by Section 32 or any other provision of this Act.”
4. Section 33 of the Stamp Act is cautiously worded,to not over expand
its ambit and scope. The section applies on production of an instrument
before a person who by law or consent of the parties has the authority to
receive evidence.6 It also applies when an instrument is produced before
a person in charge of a public oﬃce. Production of the instrument must
be during the course of performance of functions by such person orpublic
oﬃcer. The proviso states that Section 33 shall not be deemed to require any
Magistrate or Judge of a criminal court to examine or impound an instrument
if he does not think ﬁt to do so, except in proceedings under Chapter XII or
Chapter XXXVI of the Code of Criminal Procedure, 1898 (Chapter X(D)
and Chapter IX of the Code of Criminal Procedure, 1973).Police oﬃcers
are not public oﬃcers under Section 33 of the Stamp Act.

6 Hereinafter also referred to as ‘such person’.
1198 SUPREME COURT REPORTS [2023] 15 S.C.R.

5. Sub-section (3) to Section 33 states that in case of doubt, the State
Government may determine which oﬃces shall be deemed to be public
oﬃces and who shall be deemed to be persons in charge of the public oﬃces.
6. Sub-section (2) to Section 33 states that for the purpose of sub-
section (1), such person or public oﬃcer shall examine the instrument so
chargeable and so produced or coming before him,in order to ascertain
whether it is duly stamped as per the law in force in India when the instrument
was executed or ﬁrst executed.
7. Section 35 states that an instrument not duly stamped and chargeable
with duty shall not be admitted in evidence by any person having by law
or by consent of the parties the authority to receive evidence. The words
“for any purpose” mean that the instrument cannot be relied upon for a
collateral purpose either. Further, the instrument shall not be acted upon,
registered or authenticated by such person or by any public oﬃcer, unless
it is duly stamped. The words ‘acted upon’ are with reference to the acts or
the proceedings before such oﬃcer or public oﬃcer, as the case may be.
8. Section 35 permits admission of an unstamped or under-stamped
instrument after the same instrument is duly stamped. Proviso (a) requires
payment of the chargeable duty and penalty, before an insufficiently
stamped instrument is admitted in evidence, or is acted upon, registered or
authenticated.
9. Section 40(1)(b) of the Stamp Act provides for payment of proper
duty if the instrument impounded is not duly stamped. Section 42(1) provides
for certifying that proper duty has been paid on the impounded instrument.
Sub-section (2) of Section 42 provides that after certiﬁcation the instrument
shall be admissible in evidence, and may be registered, acted upon and
authenticated as if it has been duly stamped.
10. Sections 33 and 35donot apply when an instrument is produced or
is acted upon by the parties themselves, or by a person who does not have
authority by law or by consent of the parties to receive evidence, or a person
who is not a public oﬃcer. Sections 33 does not authorise a police oﬃcer
to examine and impound an instrument, even when insuﬃciently stamped.
A Magistrate or a Judge of a criminal court may not examine or impound
an instrument coming before him,and can admit an insuﬃciently stamped
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1199
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

instrument in evidence, other than in the proceeding under Chapter XII or
Chapter XXXVI of the Code of Criminal Procedure, 1898 (Chapter X(D)
and Chapter IX of the Code of Criminal Procedure, 1973).Thus, the same
instrument may be admissible and acted upon before a criminal court, while
being inadmissible before a civil court, public oﬃcer etc.
11. The negative stipulations in Sections 33 and 35 are speciﬁc, albeit
not so absolute as to make the instrument invalid in law. A “void ab initio”
instrument, which is stillborn,has no corporeality in the eyes of law. It cannot
confer or give rights, or create obligations. However, an instrument which is
“inadmissible” exists in law, albeit cannot be admitted in evidence by such
person, or be registered, authenticated or be acted upon by such person or
a public oﬃcer till it is duly stamped. As rightly observed by Hon’ble the
Chief Justice, Section 35 deals with admissibility etc. of an instrument and
not invalidity.
12. Section 36 of the Stamp Act refers to the situation where the
admission of an instrument is not to be questioned, and reads:
“36. Admission of instrument where not to be questioned.—Where
an instrument has been admitted in evidence, such admission shall not,
except as provided in Section 61, be called in question at any stage
of the same suit or proceeding on the ground that the instrument has
not been duly stamped.”
Thus, where an instrument has been admitted in evidence, such
admission shall not be called in question, except as provided in Section 61,
at any stage of the same suit or proceedings on the ground that the instrument
is not duly stamped. Consequently, where an instrument has been admitted
in evidence, such instrument cannot be impounded as it cannot be called
in question at any stage of the same suit or proceeding on the ground of
insuﬃcient stamping.
13. An instrument which is void ab initio or void, cannot be validated
by mere consent or waiver, unless consent or wavier undoes the cause of
invalidity. On the other hand, Section 36 of the Stamp Act incorporates
the doctrine of waiver, estoppel and implied consent. That apart,after due
stamping as per the Stamp Act, the unstamped or insuﬃciently stamped
1200 SUPREME COURT REPORTS [2023] 15 S.C.R.

instrument can be admitted in evidence, or be registered, authenticated or
be acted upon by such person or public oﬃcer.
14. This has long been a recognised position of law, as accepted by
this Court in several decisions, which I would like to refer to.
15. In Javer Chand and Others. v. Pukhraj Surana7, way back in
1961, a four Judges’ Bench of this Court had examined the interplay between
Sections 35 and 36 of the Stamp Act to hold that Section 36 is categorical in
terms that when a document has been admitted in evidence, such admission
cannot be called in question at any stage of the suit or proceedings on the
ground that the instrument had not been duly stamped. The only exception
recognised by Section 36 is the class of cases contemplated by Section 61
of the Stamp Act. Section 36 does not admit of any other exception. It does
not matter whether the court has wrongly decided to admit the document
in evidence. Section 35 is in the nature of a penal provision which has far
reaching eﬀects. The parties to the litigation have to be circumspect and
have to be alert so as to challenge the admissibility of an instrument before
it is admitted in evidence.
16. A ﬁve Judges’ Bench in The State of Biharv. M/s Karam Chand
Thapar and Brothers Ltd.8, has held that the instrument that can be validated
under Section 35 is only the original, when it is unstamped or insuﬃciently
stamped. A copy cannot be validated and acted upon,albeit where multiple
copies are prepared and signed and sent to respective parties, each one would
be an original instrument.
17. In Jupudi Kesava Raov. Pulavarthi Venkata Subbarao and
Others9, a two Judges’ Bench of this Court observed that The Indian
Evidence Act, 1872 does not purport to deal with admissibility of the
documents which are required to be stamped under the provisions of the
Stamp Act. Thereafter, it is observed:
“13. The ﬁrst limb of Section 35 clearly shuts out from evidence any
instrument chargeable with duty unless it is duly stamped. The second

7 AIR 1961 SC 1655.
8 AIR 1962 SC 110.
9 (1971) 1 SCC 545.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1201
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

limb of it which relates to acting upon the instrument will obviously
shut out any secondary evidence of such instrument, for allowing such
evidence to be let in when the original admittedly chargeable with
duty was not stamped or insuﬃciently stamped, would be tantamount
to the document being acted upon by the person having by law or
authority to receive evidence. Proviso (a) is only applicable when
the original instrument is actually before the Court of law and the
deﬁciency in stamp with penalty is paid by the party seeking to rely
upon the document. Clearly secondary evidence either by way of oral
evidence of the contents of the unstamped document or the copy of
it covered by Section 63 of the Indian Evidence Act would not fulﬁl
the requirements of the proviso which enjoins upon the authority to
receive nothing in evidence except the instrument itself. Section 25 is
not concerned with any copy of an instrument and a party can only be
allowed to rely on a document which is an instrument for the purpose
of Section 35. “Instrument” is deﬁned in Section 2(14) as including
every document by which any right or liability is, or purports to be
created, transferred, limited, extended, extinguished or recorded. There
is no scope for inclusion of a copy of a document as an instrument for
the purpose of the Stamp Act.
14. If Section 35 only deals with original instruments and not copies
Section 36 cannot be so interpreted as to allow secondary evidence of
an instrument to have its beneﬁt. The words “an instrument” in Section
36 must have the same meaning as that in Section 35. The legislature
only relented from the strict provisions of Section 35 in cases where
the original instrument was admitted in evidence without objection
at the initial stage of a suit or proceeding. In other words, although
the objection is based on the insuﬃciency of the stamp aﬃxed to the
document, a party who has a right to object to the reception of it must
do so when the document is ﬁrst tendered. Once the time for raising
objection to the admission of the documentary evidence is passed, no
objection based on the same ground can be raised at a later stage. But
this in no way extends the applicability of Section 36 to secondary
evidence adduced or sought to be adduced in proof of the contents of
a document which is unstamped or insuﬃciently stamped.”
1202 SUPREME COURT REPORTS [2023] 15 S.C.R.

This judgment also holds that a copy of the instrument cannot be
validated. It overruled the dictum that Section 36 will also apply where
secondary evidence of an instrument unduly stamped, has been wrongly
admitted.
18. In Hameed Joharan (਄ਅਁ਄) and Others v. Abdul Salam (਄ਅਁ਄)
by LRs. and Others10, this Court observed that applicability of the Stamp
Act stands restricted to the scheme of the Stamp Act. The Stamp Act being
a true ﬁscal statute in nature, strict construction and not liberal interpretation
is required to be eﬀected . Section 2(15) includes a decree of partition
and Section 35 lays down a bar on unstamped or insuﬃcient stamp being
admitted in evidence or being acted upon. The law however does not
prescribe that the period for ﬁling appeal shall remain suspended still stamp
paper is furnished and the partition decree is drawn thereon and signed by the
judge. The whole purport of the Stamp Act is to make available certain dues
and collect revenue, but it does not mean and imply an overriding eﬀect on
another statute operating in a completely diﬀerent sphere. Enforceability of
a decree cannot be a subject matter of Section 35 of the Stamp Act, neither
can the limitation be said to be under suspension. The heading of Section
35 itself denotes the limited sphere of applicability.
19. In Dr. Chiranji Lal (D) by LRs. v. Hari Das (D) by LRs.11, a
three Judge Bench of this Court rejected the contention that an unstamped
preliminary decree is not enforceable and, therefore, the period of limitation
begins to run when the decree is engrossed on the stamp paper. The Stamp
Act is a ﬁscal measure with the object to secure revenue for the State on
certain classes of instruments. The Stamp Act is not enacted to arm the
litigant with a weapon of technicality to meet the case of his opponent. As
there is no rule which prescribes any time for furnishing of stamp paper or
to call upon a person to pay stamp duty on a preliminary decree of partition,
the proposition that period of limitation would remain suspended till stamp
paper is furnished and decree engrossed thereon was rejected.

10 (2001) 7 SCC 573.
11 (2005) 10 SCC 746.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1203
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

20. In Hariom Agrawal v. Prakash Chand Malviya12, a three Judge
Bench has referred to Karam Chand Thapar (supra), Jupudi Kesava Rao
(supra), to observe:
“10. It is clear from the decisions of this Court and a plain reading of
Sections 33, 35 and 2(14) of the Act that an instrument which is not
duly stamped can be impounded and when the required fee and penalty
has been paid for such instrument it can be taken in evidence under
Section 35 of the Stamp Act. Sections 33 or 35 are not concerned with
any copy of the instrument and party can only be allowed to rely on
the document which is an instrument within the meaning of Section
2(14). There is no scope for the inclusion of the copy of the document
for the purposes of the Stamp Act. Law is now no doubt well settled
that copy of the instrument cannot be validated by impounding and this
cannot be admitted as secondary evidence under the Stamp Act, 1899.”
21. In Shyamal Kumar Roy v. Sushil Kumar Agarwal13, this Court
observed that Section 36 is a standalone clause which categorically prohibits
the court of law from reopening the matter with regard to the suﬃciency or
otherwise of the stamp duty paid on an instrument in the event the same has
been admitted in evidence, the only exception being Section 61 providing
for reference and revision. Reliance was placed on Javer Chand (supra).
22. Avinash Kumar Chauhanv. Vijay Krishna Mishra14 expounds the
meaning of the words ‘for any purpose’ used in Section 35 of the Stamp
Act. These words are to be given natural meaning and eﬀect. They would
include collateral purpose, as was held in the decision of the Privy Council
in Ram Rattanv. Parma Nand15. Distinction was drawn between non-eﬀect
of registration of a document in terms of Section 49 of the Registration Act,
1908, which does not bar use of an unregistered document for a collateral
purpose. Section 35 is diﬀerently worded, and when applicable, bars use of
insuﬃciently stamped instrument for a collateral purpose.

12 (2007) 8 SCC 514.
13 (2006) 11 SCC 331.
14 (2009) 2 SCC 532.
15 AIR 1946 PC 51.
1204 SUPREME COURT REPORTS [2023] 15 S.C.R.

23. It is necessary to aﬃrm this legal position, as we enter into contracts
or agreements several times in our interactions with others during the course
of the day. Even written documents in the form of invoices, receipts or
standard format agreements are often exchanged, and form the terms of the
interactions. An unstamped or under-stamped contract or agreement cannot
be impounded, except when it is produced for being received in evidence
before a person authorised to do so or a public oﬃcer in terms of Section
33 of the Stamp Act. To hold that insuﬃciently stamped instrument does
not exist in law, will cause disarray and disruption.
24. Predictability and certainty are central tenets of law, especially
in matters of commercial and routine nature. Adherence to the principle of
stare decisis is essential for parties to be able to rely on the law to deﬁne
their conduct in commercial or ordinary day to day dealings. Transient
laws undermine public legitimacy and faith in the mandate of Rule of Law.
This Court has previously observed that before reviewing and revising
its earlier decision, the Court must satisfy itself whether it is necessary
to do so in the interest of public good or for any other compelling reason,
and the Court must endeavour to maintain certainty and continuity in the
interpretation of the law in the country.16 On several occasions, this Court
has emphasised on certainty and consistency in judicial pronouncements
as being the cornerstone of the administration of justice.17 Consistency in
judicial decisions is conducive to reassuring parties of the consequences of
the transactions forming part of their daily aﬀairs.18
25. An instrument is to be stamped as per Section 33 when it is executed
or ﬁrst executed. The expressions ‘executed’ and ‘execution’ have been
deﬁned in clause (12) to Section 2 of the Stamp Act to mean ‘signed’ or
‘signature’.19 It includes attribution of electronic record within the meaning

16 Keshav Mills Co. Ltd. v. Commissioner of Income Tax, Bombay North, Ahmedabad,AIR
1965 SC 1636.
17 Government of Andhra Pradeshand Others v. A.P. Jaiswal and Others, (2001) 1 SCC
748.
18 Total Environment Building Systems Pvt. Ltd. v. Deputy Commissioner of Commercial
Taxes and Others, 2022 SCC OnLine SC 953; Union of Indiaand Another v. Raghubir
Singh (Dਅਁ਄) by LRs. etc., (1989) 2 SCC 754.
19 2. Deﬁnitions.—In this Act, unless there is something repugnant in subject or
context,—
(12) Executed and execution.—“Executed” and “execution”, used with reference
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1205
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

of Section 11 of the Information Technology Act, 200020. I shall now analyse
the relevance of execution or ‘signature’, with reference to an arbitration
agreement as deﬁned in Section 7 of the Arbitration Act.
26. Section 7of the Arbitration Act reads:
“7. Arbitration agreement.—(1) In this Part, “arbitration agreement”
means an agreement by the parties to submit to arbitration all or certain
disputes which have arisen or which may arise between them in respect
of a deﬁned legal relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration clause
in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication including communication through electronic means
which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which the
existence of the agreement is alleged by one party and not denied by
the other.
(5) The reference in a contract to a document containing an arbitration
clause constitutes an arbitration agreement if the contract is in writing
and the reference is such as to make that arbitration clause part of the
contract.”

to instruments, mean “signed” and “signature”and includes attribution of electronic
record within the meaning of Section 11 of the Information Technology Act, 2000 (21
of 2000).
20 11. Attribution of electronic records.—An electronic record shall be attributed to the
originator—
(a) if it was sent by the originator himself;
(b) by a person who had the authority to act on behalf of the originator in respect of
that electronic record; or
(c) by an information system programmed by or on behalf of the originator to operate
automatically.
1206 SUPREME COURT REPORTS [2023] 15 S.C.R.

An ‘arbitration agreement’ is an agreement by the parties to submit to
arbitration all or certain disputes which have arisen or may arise between
them. The disputes may be in respect of a deﬁned legal relationship, whether
contractual or not. An arbitration agreement has to be in writing.
27. Sub-section (4) to Section 7 speciﬁes when an arbitration agreement
can be said to be in writing. Clause (a) to sub-section (4) states that an
arbitration agreement can be a document signed by the parties. According
to clause (b) to sub-section (4) to Section 7, an arbitration agreement
can be established or inferred from exchange of letters, telex, telegrams
or other forms of communication, including communication through
electronic means. The provision does not mention the need for ‘execution’
or signatures of the parties.21 Similarly, clause (c) to sub-section (4) to
Section 7 which refers to exchange of statements of claim and defence, in
which the existence of the arbitration agreement is alleged by one party
and not denied by the other, does not refer to an instrument which is signed
by the parties. Clause (c) incorporates the principle wherein the parties by
“consent” agree to the existence of an arbitration agreement, or impliedly
agree by not denying its existence when alleged by one party and not denied
by the other. An arbitration agreement is deﬁned in the widest terms, and
may be in the form of a clause in the underlying contract or separate from
an underlying agreement. Signiﬁcantly, even when it is a clause of the
underlying agreement, it is treated as a separate agreement, an aspect to
which I shall advert.
28. Section 1622 of the Arbitration Act, empowers the arbitral tribunal

21 Caravel Shipping Services (P) Ltd. v. Premier Sea Foods Exim (P) Ltd. (2019) 11 SCC
461; Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia Pvt. Ltd. (2015) 13 SCC
477.
22 16. Competence of arbitral tribunal to rule on its jurisdiction.—(1) The arbitral
tribunal may rule on its own jurisdiction, including ruling on any objections with
respect to the existence or validity of the arbitration agreement, and for that purpose,—
(a) an arbitration clause which forms part of a contract shall be treated as an agreement
independent of the other terms of the contract; and
(b) a decision by the arbitral tribunal that the contract is null and void shall not entail
ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later
than the submission of the statement of defence; however, a party shall not be precluded
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1207
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

to rule on its own jurisdiction. This includes the authority to decide the
existence and validity of the arbitration agreement. This has reference to
Section 7 of the Arbitration Act, which I have examined. As per Section 16,
an arbitration agreement is an agreement independent of the other terms of
the contract, even when it is only a clause in the underlying contract. The
section speciﬁcally states that a decision by the arbitral tribunal holding
the underlying contract to be null and void, will not lead to ipso jure the
invalidity of the arbitration clause. The existence of an arbitration agreement
is to be ascertained with reference to the requirements of Section 7 of the
Arbitration Act. In a given case the underlying contract may be null and
void, but the arbitration clause may exist and be enforceable. Invalidity of
an underlying agreement may not,unless relating to its formation, result in
invalidity of the arbitration clause in the underlying agreement. Hon’ble the
Chief Justice has elaborately explained the negative and positive contours
of the doctrine of separability in reference to an arbitration agreement, with
which I respectfully agree.
29. In this connection, I may note a decision of the Singapore High
Court in the case of BNA v. BNB and Another23 which holds that a defect
in the arbitration agreement does not render it void ab initio unless the
defect is so fundamental or irretrievable as to negate the parties’ intent or
agreement to arbitrate. This principle is based upon the observations of the
Court of Appeal of Singapore in the judgment in Insigma Technology Co
Ltd v. Alstom Technology Ltd24.

from raising such a plea merely because that he has appointed, or participated in the
appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised
as soon as the matter alleged to be beyond the scope of its authority is raised during
the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-
section (3), admit a later plea if it considers the delay justiﬁed.
(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-
section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue
with the arbitral proceedings and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an application for setting
aside such an arbitral award in accordance with Section 34.
23 [2019] SGHC 142.
24 [2009] SGCA 24.
1208 SUPREME COURT REPORTS [2023] 15 S.C.R.

30. Jurisprudentially it is important to distinguish the terms and
consequences of an agreement void ab initio, and a voidable agreement,
and the eﬀect of illegality and violation of law on an agreement.
31. As per the Indian Contract Act, 1872 25, an agreement not
enforceable by law is said to be void, and an agreement enforceable by law
is a contract.26 A contract which ceases to be enforceable by law becomes
void when it ceases to be enforceable.27
32. The requirements of Section 10 of the Contract Act28 are that
the contract should be made by parties competent to contract, for lawful
consideration and with lawful object. Consent of the parties should be free.
The contract should not be expressly declared to be void. Section 2 has to
be read with Section 10 and not in isolation, in order to avoid contradiction
and to harmoniously apply the two sections.
33. Sections 1129 and 1230 deal with persons entitled to contract. In
instances where a person is explicitly declared as incompetent or does
not fall within the deﬁnition of a competent person under the aforesaid
provisions, like a minor or a person of unsound mind, a contract entered into
by such person would be void. An agreement is also rendered void when
both parties are under mistake of fact31. As per Section 24, agreements are
void if consideration and objects are unlawful in part.32 This section does
not have any application to the present issue, and neither are we concerned
with Section 25, which relates to agreements without consideration and in

25 For short, “the Contract Act”.
26 2 (g) An agreement not enforceable by law is said to be void;(h) An agreement
enforceable by law is a contract
27 2 (j) A contract which ceases to be enforceable by law becomes void when it ceases to
be enforceable.
28 10. What agreements are contracts.—All agreements are contracts if they are made
by the free consent of parties competent to contract, for a lawful consideration and
with a lawful object, and are not hereby expressly declared to be void.
Nothing herein contained shall aﬀect any law in force in India and not hereby expressly
repealed, by which any contract is required to be made in writingor in the presence of
witnesses, or any law relating to the registration of documents.
29 Section 11, The Indian Contract Act, 1872.
30 Section 12, The Indian Contract Act, 1872.
31 Section 20, The Indian Contract Act, 1872.
32 Section 24, The Indian Contract Act, 1872.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1209
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

which situation they have to be treated as void33. Agreements which are in
restraint of marriage or in restraint of trade are void.34 Agreements by way
of wager are also void.35 Agreements, the meaning of which is not certain, or
capable of being made certain, are void.36 Section 28 states that agreements in
restraint of legal proceedings are void, but Exception 1 states that a contract
by which parties agree for disputes arising between them to be referred to
arbitration shall not render the contract illegal.37
34. Sections 13 to 19A relate to consent38, free consent39, coercion40,
undue inﬂuence41, fraud42, misrepresentation43, void ability of agreements
without free consent44, and power to set aside contract induced by undue
inﬂuence45. The Contract Act declares contracts aﬀected by the preceding
provisions to be voidable at the option of the aggrieved party.
35. Under Section 21, a contract is not voidable because it is caused
by mistake as to law enforced in India46, and a contract where mistake of
fact is made by one party is also not voidable as per Section 2247.
36. According to Section 23 of the Contract Act, the consideration
or object of an agreement is lawful unless it is forbidden by law or is of
such nature as to defeat the provisions of law, or is fraudulent. Neither are
these provisions applicable in case of unstamped or insuﬃciently stamped
instruments, nor is the consideration or object unlawful as it involves or
implies injury to a person or property of another. The last clause of Section
23 applies when the consideration or object of an agreement is regarded as

33 Section 25, The Indian Contract Act, 1872.
34 Sections 26 and 27, The Indian Contract Act, 1872.
35 Section 30, The Indian Contract Act, 1872.
36 Section 29, The Indian Contract Act, 1872.
37 Section 28, The Indian Contract Act, 1872.
38 Section 13, The Indian Contract Act, 1872.
39 Section 14, The Indian Contract Act, 1872.
40 Section 15, The Indian Contract Act, 1872.
41 Section 16, The Indian Contract Act, 1872.
42 Section 17, The Indian Contract Act, 1872.
43 Section 18, The Indian Contract Act, 1872.
44 Section 19, The Indian Contract Act, 1872.
45 Section 19A, The Indian Contract Act, 1872.
46 Section 21, The Indian Contract Act, 1872.
47 Section 22, The Indian Contract Act, 1872.
1210 SUPREME COURT REPORTS [2023] 15 S.C.R.

immoral or opposed to public policy. An instrument whether unstamped or
insuﬃciently stamped will not fall foul on the ground of consideration or
object of the agreement being immoral, neither will it fall foul as opposed
to public policy.
37. In B.O.I. Finance Ltd. v. Custodian and Others48 this Court after
examining the case law on the subject of public policy, observed that in
pursuant to an agreement to do an illegal act, a transaction, in part, takes
place which would otherwise be valid if there was no such prior agreement,
then notwithstanding the illegality of the contract, the completed transaction
itself cannot be regarded as invalid.
38. Following this judgment, in Canara Bank and Others v. Standard
Chartered Bank49, it is held that for the contract to be declared void on the
ground of public policy, it must be shown that the object and consideration of
the contract was one which was illegal. Where the object and consideration
of the contract is not illegal as in the case of sale/ purchase of securities
and payment of price, the contract will not be void on the ground of being
opposed to public policy. The contention that the performance of contract
in violation of law will be void on ground of public policy was rejected.
These observations were made in the context of the argument that there was
violation of law while carrying out the contract and the arrangement was
opposed to public policy.
39. A judgment by Mr. Justice S.S. Nijjar in Swiss Timing Ltd. v.
Commonwealth Games 2010 Organising Committee50, has elaborately dealt
with the terms ‘void’ and ‘voidable’ and states that they are used loosely
and interchangeably with each other, though strictly in law, they are not
so. It is also important to draw a distinction between contracts which are
void, and those which are void ab initio due to lack of elements of oﬀer or
acceptance, which prevents a contract from coming into operation. Thus,
a contract by a minor or by a person of unsound mind would be void due
to lack of eﬀectual oﬀer or acceptance. But once the contract is made, that
is to say where parties, whatever their innermost state of mind, have to all

48 (1997) 10 SCC 488.
49 (2002) 10 SCC 697.
50 (2014) 6 SCC 677.
IN RE: INTERPLAY BETWEEN ARBITRATION AGREEMENTS UNDER 1211
THE ARBITRATION AND CONCILIATION ACT 1996 AND THE INDIAN
STAMP ACT 1899 [SANJIV KHANNA, J.]

outward appearances, agreed with suﬃcient certainty in the same terms of
the subject matter, then the contract is good unless and until it is set aside
for failure of some condition on which the existence of contract depends,
or for fraud, or on some other equitable ground. Neither party can rely upon
its own mistake to say that it was a nullity from the beginning, no matter
that it was a mistake which to his mind was fundamental, no matter that the
other party knew that he was under a mistake.51
40. The judgment in Vidya Drolia and Others v. Durga Trading
Corporation52, after referring to Avitel Post Studioz Ltd. v. HSBC PI
Holdings (Mauritius) Ltd.53, draws a distinction between contract obtained
through fraud, and post contract fraud or cheating. The latter falls outside
the scope of Section 17 of the Contract Act. It observes that the fraud may
permeate the entire contract and above all the agreement of arbitration,
rendering it void. However, it may not be so when the allegations of fraud
touch upon the internal aﬀairs of the parties inter se, having no implication
in the public domain.
41. There are also two aspects of the judgment in Vidya Drolia (supra),
which need to be noticed. First, I agree to and accept the error made by me
in the judgment which observes that Section 11(6A) of the Arbitration Act
has ceased to be operative in view of the enforcement of Section 3 of the
Arbitration and Conciliation (Amendment) Act, 2019. As rightly observed
by Hon’ble the Chief Justice, Section 3 of the Arbitration and Conciliation
(Amendment) Act, 2019which relates to the amendment to Section 11
has not been enforced. Secondly, as has been noted in the judgment of
Hon’ble the Chief Justice and in Career Institute Educational Society v.
Om Shree Thakurji Educational Society54, the issue before this Court in
Vidya Drolia (supra)was not the validity of an unstamped or under-stamped
arbitration agreement. No speciﬁc opinion was expressed on this question.

51 See ITC Ltd.v. George Joseph Fernandes and Another(1989) 2 SCC 1, which quotes
from Smith v. Hughes LR (1871) 6 QB 597 and Sollev. Butcher (1950) 1 KB 671. The
judgment in ITC Ltd.(supra) was under the Arbitration Act,1940 and should not be
applied to interpret the Arbitration and Conciliation Act, 1996.
52 (2021) 2 SCC 1.
53 (2021) 4 SCC 713.
54 2023 SCC OnLine SC 586.
1212 SUPREME COURT REPORTS [2023] 15 S.C.R.

The reference to the validity of an unstamped arbitration agreement, as
mentioned in Garware Wall Ropes Ltd. v. Coastal Marine Constructions
& Engg. Ltd.55, was only to serve the purpose of drawing a comparison
between the ‘existence’ and the ‘validity’ of an arbitration agreement, and
not a comment or opinion on the ‘existence’ of unstamped or under-stamped
arbitration agreements.
42. For the reasons set out in detail by Hon’ble the Chief Justice and
recorded herein, I agree with the conclusions drawn, and referred to above.
I also concur with the other ﬁndings and ratio in the judgment by Hon’ble
the Chief Justice.

Headnotes prepared by: Matters to be placed before appropriate Bench.
Bibhuti Bhushan Bose

55 (2019) 9 SCC 209.

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