The Division Bench of the Hon'ble Supreme Court of India in the matter of M/s. Shriram EPC Limited vs. Rioglass Solar SA1 has uphold that the payment of stamp duty under the Indian Stamp Act, 1899 is not mandatory for the enforcement of foreign arbitration awards in India.

FACTS:

The issue arose out of a judgment of the Hon'ble High Court of Judicature at Madras which dismissed objections to an ICC award delivered in London on 12.02.2015. The appellant had filed its objections under Section 34 of the Arbitration and Conciliation Act, 1996 ('Act of 1996') which were dismissed by the High Court on 27.09.2016 on the ground that the said petition under Section 34 of the Act of 1996 would not be maintainable against the foreign award.

In furtherance, the Respondent filed a petition under Section 47 of Act of 1996 for enforcement of the Award dated 12.02.2015. The Hon'ble Single Bench of High Court rejected the objections vide detailed judgment delivered on 09.02.2017. The said judgment came under challenge before the Hon'ble Supreme Court of India by way of a Special Leave Petition under Article 136 of the Constitution of India.

ISSUE:

Whether the unstamped foreign award can be enforced under Sections 48 and 49 of the Arbitration and Conciliation Act, 1996?

DECISION:

  • The Hon'ble Supreme Court held that Section 47 of the Act of 1996 in no manner interdicted the payment of stamp duty if it is otherwise payable in law. Section 47 of the Act of 1996 requires a party approaching the Court for execution of the award to show a) the original award of a copy thereof, duly authenticated in the matter required by the law of the country in which it was made; b) original arbitration agreement or duly certified copy thereof; c) such evidence as may be necessary to be that the award is a foreign award.
  • Even if stamp duty is payable on a foreign award, it cannot be held that the same would be contrary to the public policy of India.
  • The object of the Act of 1996 is to provide that every final arbitral award is enforced in the same manner as if it were a decree of the Court. While the Act of 1996 was enforced, no amendment was made in the definition of award given in the Indian Stamp Act, 1899 and even the Schedule which lays down the stamp duty payable on award was not amended by including the foreign award in it.

ANALYSIS:

With this judgement, the Hon'ble Supreme Court has settled the issue regarding non-payment of stamp duty for enforcement of Foreign Awards in India. The Judgment uplifts the spirit and intent of the Act of 1996 and closes doors for objection to a foreign award on the requirement of payment of any stamp duty. The decision of the Hon'ble Supreme Court comes in a good spirit which is in tune of the best practice for enforcement of Foreign Arbitration awards in India.

Footnote

1. Civil Appeal No. 9515 of 2018 (Decided on September 13, 2018)

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