Case Law (SC) -- Arbitration Agreements which are not stamped or are inadequately stamped are inadmissible in evidence u/s 35 of the Stamp Act and such agreements are not rendered void or void ab initio or unenforceable. Non-stamping or inadequate stamping is a curable defect.

 “223. We agree with these observations in Career Institute Educational Society (supra). Vidya Drolia (supra) did not deal with the issue of the effect of an unstamped or insufficiently stamped instrument on the existence or validity of an arbitration agreement. Therefore, the reasoning in Vidya Drolia (supra) does not lead to the conclusion that Garware Wall Ropes (supra) was rightly 176 2023 SCC OnLine SC 586 decided either on the aspect of examination and impounding of unstamped or insufficiently stamped instrument with respect to arbitration proceedings, or the validity of on arbitration agreement contained in an unstamped or insufficiently stamped underlying contract.

Conclusions

224. The conclusions reached in this judgment are summarised below:

a. Agreements which are not stamped or are inadequately stamped are inadmissible in evidence under Section 35 of the Stamp Act. Such agreements are not rendered void or void ab initio or unenforceable;

b. Non-stamping or inadequate stamping is a curable defect;

c. An objection as to stamping does not fall for determination under Sections 8 or 11 of the Arbitration Act. The concerned court must examine whether the arbitration agreement prima facie exists;

d. Any objections in relation to the stamping of the agreement fall within the ambit of the arbitral tribunal; and

e. The decision in NN Global 2 (supra) and SMS Tea Estates (supra) are overruled. Paragraphs 22 and 29 of Garware Wall Ropes (supra) are overruled to that extent.”

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