The Supreme Court has referred to a seven-judge bench, to consider, the rationale of validity of Unstamped Arbitration Agreements in law.
The issue in M/s. N.N. Global Mercantile Pvt. Ltd. Vs. M/s. Indo Unique Flame Ltd., already decided by a five-judge Constitution Bench has now been referred to a seven-judge bench for reconsideration.
The Bench of Justice KM Joseph, Justice Ajay Rastogi, Justice Aniruddha Bose, Justice Hrishikesh Roy, and Justice CT Ravikumar with a 3:2 majority had ruled that the Arbitration Clause in Unstamped Instrument exigible to Stamp Duty cannot be invoked.
Senior Advocate Arvind Datar argued that if the 5-judge bench dictum has to be followed then no applications under Section 9 of the Arbitration and Conciliation Act for interim measures could be moved at all.
A bench headed by CJI Chandrachud in view of such ramifications referred the issue to a seven-judge bench terming it as critical for Arbitrators across the country.
"Arbitrators across the country are facing the situation where they are being told - 'See the agreement is unstamped and now open the case...' So this uncertainty has to end", the court said rejecting objection to jurisdiction of the curative petition.
Asking for submission of all relevant compilations and documents related to the case by October 6, 2023, the CJI indicated that the seven-judge bench would be convened soon after the conclusion of another seven-judge bench case.
SC rules that unstamped Arbitration Agreements are invalid in law, Read Judgement
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