Arbitration and Conciliation Act, 1996 Section 11

Unless the stamp duty and penalty due in respect of the instrument is paid, the court cannot act upon the instrument

Section 35 of the Stamp Act, unless the stamp duty and penalty due in respect of the instrument is paid, the court cannot act upon the instrument, which means that it cannot act upon the arbitration agreement also which is part of the instrument. Section 35 of the Stamp Act is distinct and different from Section 49 of the Registration Act in regard to an unregistered document. Section 35 of the Stamp Act, does not contain a proviso like Section 49 of the Registration Act enabling the instrument to be used to establish a collateral transaction.

When a lease deed or any other instrument is relied upon as containing the arbitration agreement, the Court is required to consider at the outset, whether the document is properly stamped or not. It has been held, that even when an objection in that behalf is not raised, it is the duty of the Court to consider the issue. It has further been held, that if the Court comes to the conclusion, that the instrument is not properly stamped, it should be impounded and dealt with, in the manner specified in Section 38 of the Stamp Act, 1899. It has also been held, that the Court cannot act upon such a document or the arbitration clause therein. However, if the deficit duty and penalty is paid in the manner set out in Section 35 or Section 40 of the Stamp Act, 1899, the document can be acted upon or admitted in evidence. SMS Tea Estates Private Limited v. Chandmari Tea Company Private Limited, (2011) 14 SCC 66

Stamp Duty | Deficient | Court is required to consider at the outset, whether the document is properly stamped or not

Arbitration and Conciliation Act, 1996 - Section 11(6) - When a lease deed or any other instrument is relied upon as containing the arbitration agreement, the Court is required to consider at the outset, whether the document is properly stamped or not - Even when an objection in that behalf is not raised, it is the duty of the Court to consider the issue - If the Court comes to the conclusion, that the instrument is not properly stamped, it should be impounded and dealt with, in the manner specified in Section 38 of the Stamp Act, 1899 - Court cannot act upon such a document or the arbitration clause therein - However, if the deficit duty and penalty is paid in the manner set out in Section 35 or Section 40 of the Stamp Act, 1899, the document can be acted upon or admitted in evidence - Lease deed containing the arbitration clause which was required to be duly stamped, was not sufficiently stamped and though the Registrar (Judicial) had directed the respondents to pay deficit stamp duty and penalty of Rs. 1,01,56,388/- the respondents failed to do so, the High Court has erred in relying on the said lease deed – Order appointing arbitrator - Set aside. #2020 SCeJ 98

Power to appoint | person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator

Arbitration and Conciliation Act, 1996 - Sections 11(6) read with 11(12)(a) - Appointment of a sole Arbitrator - In a case where only one party has a right to appoint a sole arbitrator, its choice will always have an element of exclusivity in determining or charting the course for dispute resolution - Naturally, the person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator. 2017 SCeJ 003, followed

2019 SCeJ 3007, PERKINS EASTMAN ARCHITECTS DPC v. HSCC (INDIA) LTD

Person who is ineligible cannot nominate a person

Arbitration and Conciliation Act, 1996 - Section 11(6) - Once the arbitrator has become ineligible by operation of law, he cannot nominate another as an arbitrator. The arbitrator becomes ineligible as per prescription contained in Section 12(5) of the Act - It is inconceivable in law that person who is statutorily ineligible can nominate a person.

2017 SCeJ 003.