Case Note & Summary
The petitioner, Lloyds Realty Developers Limited, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator to resolve disputes arising out of a Development Agreement dated 1st October 2018 with the respondent, Oakwood Asia Pacific Limited. The respondent opposed the petition primarily on the ground that the agreement was insufficiently stamped and therefore could not be acted upon for appointment of an arbitrator. The court, after hearing both sides, held that the issue of stamp duty is a fiscal matter and does not bar the appointment of an arbitrator under Section 11. The court appointed a former judge of the Bombay High Court, Justice S.J. Kathawala (Retd.), as the sole arbitrator and directed him to decide the issue of stamp duty as a preliminary issue. The petition was allowed with no order as to costs.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Maintainability despite insufficient stamp duty - The court considered whether non-payment of proper stamp duty on the agreement bars appointment of an arbitrator under Section 11. The court held that stamp duty is a fiscal matter and does not affect the validity of the arbitration agreement for the purpose of appointment. The petition was allowed and an arbitrator was appointed. (Paras 1-10) B) Stamp Act - Fiscal Matter - Stamp Act, 1899 - The court observed that the issue of stamp duty is a fiscal matter and does not go to the root of the jurisdiction under Section 11 of the Arbitration Act. The court directed the appointed arbitrator to decide the issue of stamp duty as a preliminary issue. (Paras 8-10)
Issue of Consideration
Whether the petition under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator is maintainable when the underlying agreement is alleged to be insufficiently stamped.
Final Decision
The petition is allowed. Justice S.J. Kathawala (Retd.), former Judge of the Bombay High Court, is appointed as the sole arbitrator to adjudicate the disputes between the parties. The arbitrator shall decide the issue of stamp duty as a preliminary issue. No order as to costs.
Law Points
- Section 11 of the Arbitration and Conciliation Act
- 1996
- Stamp Act
- 1899
- Appointment of arbitrator
- Non-payment of stamp duty
- Fiscal matter
- Bar to appointment
