A seven-judge Constitution Bench on December 13 held that arbitration agreements embedded in unstamped or insufficiently-stamped substantive commercial contracts or instruments are not invalid, unenforceable or even non-existent.
The judgment gives a significant shot in the arm for India’s ambition to become an international arbitration hub to quickly resolve commercial disputes. Earlier, arbitrations on such disputes had struck a roadblock owing to non-payment of the required stamp duty for or insufficient stamping of contracts by the parties.
“Arbitration aims to provide speedy, efficient, and binding resolution of disputes that have arisen between the parties in regard to their substantive obligations,” the Supreme Court noted.
