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The supreme Court, has finally settled the much disputed matter under the Indian Stamp Act. it held that the payment of stamp duty under the Indian Stamp Act is not necessary for the enforcement of foreign arbitrations awards in India, since foreign award is not covered by the term “award” as mentioned under Indian Stamp Act, 1889. It observed that the award under the Act, would apply to the awards made in the whole of India, except Jammu and Kashmir and thus, it does not include foreign award.
This issue arose out of a judgment passed by Madras High Court which overruled the objections to ICC award delivered in London. It was contended on behalf of the appellant that the award cannot be enforced unless stamped in accordance with the Indian Stamp Act as per Section 47 of the Arbitration and Conciliation Act, 1996. While delivering this judgment, the court relied on the judgment passed by Punjab and Haryana HC in Gujrals M.A Morris. The respondents relied on various other judgments passed by the Delhi HC and Madhya Pradesh HC.
With context of the Indian Stamp Act, the Court observed that the act of 1889, dealt with British India and not with the princely states. Therefore, after Independence, only domestic awards must be covered by the Stamp Act. The bench did not agree with the contention of the appellant that the act must be construed as on date and not as per its original definition.
The court further overruled the judgment of Punjab and Haryana High Court on the ground that it did not take into account the definition of award under the Stamp Act however it agreed to the judgment rendered by Delhi HC on variant reasons and held that the HC misconstrued certain observations made by the SC, in respect of domestic awards. The Apex Court agreed to the judgment given by Madhya Pradesh HC.
The contention by the respondent that Section 47 of the Act required three things to be produced before the Court for the enforcement of foreign award was also rejected by the court. It held that the Section 47 does not indicate the payment of stamp duty if it is otherwise payable in law. The bench further added that there is no hindrance in making foreign award subject to stamp duty.
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