Arbitration agreement survives stamp defects as referral courts limit review and leave stamping objections to the tribunal.

Non-stamping or insufficient stamping of the underlying instrument affects admissibility, not the legal existence of the arbitration agreement, because separability under the Arbitration and Conciliation Act, 1996 preserves the agreement as independent of the main contract. At the referral stage under Sections 8 and 11, the court's inquiry is limited to the prima facie existence of an arbitration agreement and it is not required to examine or impound the unstamped instrument. Objections relating to stamp duty are to be considered by the arbitral tribunal in the first instance, which may deal with the instrument in accordance with the Stamp Act if necessary.

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Issues: (i) Whether non-stamping or insufficient stamping of an underlying instrument renders an arbitration agreement contained in it void, non-existent, or unenforceable; (ii) whether the court at the referral stage under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996 must examine and impound an unstamped or insufficiently stamped instrument; and (iii) whether objections as to stamping fall for determination before the court or the arbitral tribunal.

Issue (i): Whether non-stamping or insufficient stamping of an underlying instrument renders an arbitration agreement contained in it void, non-existent, or unenforceable.

Analysis: The statutory scheme of the Indian Stamp Act, 1899 makes an unstamped or insufficiently stamped instrument inadmissible in evidence and not liable to be acted upon until duty and penalty are paid, but it does not declare such instrument void. The distinction between inadmissibility and invalidity is central. The arbitration agreement, by virtue of the doctrine of separability and the text of Section 16 of the Arbitration and Conciliation Act, 1996, is treated as independent of the underlying contract. Non-payment of stamp duty is a curable defect and does not destroy the existence of the arbitration agreement in law.

Conclusion: An arbitration agreement is not rendered void, non-existent, or unenforceable merely because the underlying instrument is unstamped or insufficiently stamped.

Issue (ii): Whether the court at the referral stage under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996 must examine and impound an unstamped or insufficiently stamped instrument.

Analysis: Section 11(6A) confines the court to the examination of the existence of an arbitration agreement, and Section 5 embodies the legislative command of minimum judicial interference. The Arbitration and Conciliation Act, 1996 is a special and self-contained code governing arbitration, while the Stamp Act is a fiscal statute. Harmonious construction requires effect to be given to the arbitration law without defeating the revenue purpose of the Stamp Act. The referral court therefore does not undertake the impounding exercise at the pre-arbitral stage.

Conclusion: The referral court under Sections 8 and 11 is not required to examine or impound the unstamped or insufficiently stamped instrument.

Issue (iii): Whether objections as to stamping fall for determination before the court or the arbitral tribunal.

Analysis: The doctrine of competence-competence gives the arbitral tribunal the first opportunity to rule on its own jurisdiction, including objections touching the existence or validity of the arbitration agreement. Questions concerning sufficiency of stamp duty are jurisdictional in the broader arbitral sense and may require evidence and legal scrutiny beyond the prima facie inquiry undertaken by the referral court. The tribunal can impound the instrument and proceed in accordance with the Stamp Act if necessary.

Conclusion: Objections relating to stamping fall within the ambit of the arbitral tribunal in the first instance.

Final Conclusion: The earlier view that an unstamped or insufficiently stamped underlying instrument disables the arbitration agreement at the referral stage was disapproved, and the law was restated in favour of referral to arbitration subject to the tribunal's power to decide stamping objections in accordance with law.

Ratio Decidendi: Non-stamping or insufficient stamping affects admissibility, not the legal existence of an arbitration agreement, and the referral court under Sections 8 and 11 must confine itself to a prima facie examination of existence while leaving stamping objections to the arbitral tribunal.

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