Case Note & Summary
The Petitioner, Coastal Marine Construction and Engineering Limited, filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of a sole arbitrator to adjudicate disputes arising from a sub-contract dated 14th June 2013 with the Respondent, Garware-Wall Ropes Limited. The sub-contract contained an arbitration clause providing for disputes to be resolved by a sole arbitrator appointed jointly by the parties. Disputes arose, and the Petitioner invoked the arbitration clause, but the parties could not agree on an arbitrator. The Respondent opposed the petition primarily on the ground that the sub-contract was unstamped or insufficiently stamped, and therefore, no arbitration agreement existed in law. The Court, after hearing arguments, held that at the Section 11 stage, it is only required to take a prima facie view of the existence of an arbitration agreement. The issue of stamp duty goes to the admissibility of the agreement as evidence and is a matter for the arbitrator to decide under Section 16 of the Arbitration Act. The Court appointed a sole arbitrator to adjudicate the disputes, leaving all contentions open, including the stamp duty issue.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Existence of Arbitration Agreement - The Court, at the stage of Section 11, is only required to take a prima facie view of the existence of an arbitration agreement. Objections regarding stamp duty on the underlying contract are matters for the arbitrator to decide and do not preclude the appointment of an arbitrator. (Paras 1-31) B) Stamp Act - Objection as to Stamp Duty - The Indian Stamp Act, 1899 - The issue of whether the agreement is sufficiently stamped is a question that goes to the admissibility of the agreement as evidence, not to the jurisdiction of the arbitrator. The arbitrator can decide this issue under Section 16 of the Arbitration Act. (Paras 20-31)
Issue of Consideration
Whether the Court can appoint an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 when the underlying agreement is alleged to be unstamped or insufficiently stamped.
Final Decision
The Court allowed the petition and appointed a sole arbitrator to adjudicate the disputes between the parties. All contentions, including the stamp duty issue, are left open for the arbitrator to decide.
Law Points
- Section 11 of the Arbitration and Conciliation Act
- 1996
- existence of arbitration agreement
- stamp duty
- prima facie view
- appointment of arbitrator
