Judge GS Patel heard an arbitration application from S Satyanaryana and Co., a Vishakhapatnam-based partnership company. West Quay Multiport Pvt Ltd, headquartered in Mumbai, is the sponsor. In this case, it was found that if an application under Sections 11 (4) to 11 (6) of the 1996 Act is pending before a court and appears to be a compromise clause in an unstamped agreement, the court is invited by the provisions of the Indian Stamp Act to refer the agreement first and to see that the stamp tax and penalty (if any) is paid. before the agreement as a whole, can be exchanged, including the compromise clause. It was also decided that the agreement applies to the whole agreement and that the compromise clause cannot be branched out in order to give it an independent existence for limited purposes. Therefore, the introduction of Section 11 6A empty of the 2015 Act would not in any way repeal the SMS Tea Estates services that are still in effect. The agreement was signed by West Quay in Mumbai and Satyanarayana in Vishakhapatnam and officially executed in Vishakhapatnam. However, Article 55.2 of the two contracts clarified the compromise clause and declared Mumbai as the place of arbitration, in case there were disputes. In 2015, disputes broke out between the two parties and Satyanarayana invoked arbitration and asked West Quay to appoint its arbitrator. West Quay did not appoint its arbitrator, after which Satyanarayana filed an arbitration under Section 11 of the Arbitration and Conciliation Act in 1996. A single bank of judges of the Bombay High Court, composed of Justice G.S. Patel, decided that an arbitration agreement should be stamped in the state where the arbitration is to take place.
The facts are that the applicant is a social society based in Vishakhapatnam, which awarded a contract for work to the respondent based in Bombay. The only thing that had to be done in Maharashtra was the arbitration itself, but the documents were stamped in accordance with local law in Vishakhapatnam. … is not properly stamped and registered, it should be referred to the Court of Justice and the petitioner should be asked to apply the necessary stamp duty and registration fees before the arbitration clause in… stamp collector and induce the petitioner to pay the stamp duty and registration fee required before he proceeds to arbitration. If not, arbitration… Engineering Pvt. Ltd., 200 (2013) DLT 121: 2013 (5) RAJ 742 (Del), the question of whether the unregured document with compromise clause is a… In interpreting this provision, the petitioner challenged the principle that the agreement should be seen as a stamp duty in Maharashtra. It submitted that Section 3 (a) (b) of MSA should be limited to the contracting contractor`s order work and could not include an arbitration procedure.
In addition, an arbitration procedure is a dispute resolution mechanism where there is a dispute over a “done or done” thing. The Supreme Court found that under the Maharashtra Stamp Act of 1958 (“Stamp Act”), an agreement is not applicable by law until it is properly stamped. The respondent attempted to distinguish between the “validity” and “existence” of an arbitration agreement and argued that the stamp provisions of the Law were tax measures that fall within the “validity” determination of a compromise clause and not its “existence,” which should allow the court to appoint arbitrators even in cases where the agreement is not stamped. However, the Supreme Court was not impressed by such statements and found that a compromise clause did not fully despair of the agreement in which it is contained, since the stamp law applies to the whole agreement. Therefore, a compromise clause would not exist if the underlying agreement is not legally applicable. As a result, the Supreme Court has ruled that the court can enter a section 11 agreement of the Act if it is not stamped in accordance with the mandatory provisions of the Stamp Act.