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A 68. Section 11(6A) as we have noted above begins with a non- obstante clause viz. “notwithstanding any judgment, decree or order of any Court” and effectively overrules all judgments which widened the ambit of examination.

69. The first submission before us by Mr. Gagan Sanghi, learned B Counsel for the Appellant on this aspect was that the observations of two different three- Judge Bench decisions in Dharmaratnakara (supra) and Black Pearl Hotels (supra) have not been considered in NN Global(supra) which is another three-judge bench and that this seriously calls into question the finding of NN Global(supra).

C 70. It is significant to note here that the above two judgments did not consider the recent 11(6A) Amendment. Black Pearl Hotels(supra) was delivered pre-11(6A) and hence stands legislatively overruled. In Dharmaratnakara (supra), it appears that the amendment to Section 11(6A) was not brought to the notice of the Court and the earlier judgment in Garware(supra) was not considered. This could also be because the D Court considered the order which was passed prior to introduction of Section 11(6A). In Dharmaratnakara (supra), the issue before the Court was whether a document executed between parties was a lease deed or an “agreement to lease”, and whether arbitration could be invoked under the said document. Even after determination by the Registrar E (Judicial) of the Karnataka High Court that the concerned document was a lease deed, the deficit stamp duty was not paid. The Court relied on SMS Tea(supra), to hold that the arbitration agreement could not be acted upon, unless stamp duty is paid.

71. From the discussion above, it is clear that Dharmaratnakara F (supra) does not lay down the correct position in light of the post-2015 amendment regime. Through the Amending Act, SMS Tea (supra) stands legislatively overruled. 72.The correct exposition of law after the insertion of Section 11(6A) is to be found in Duro Felguera, S.A. v. Gangavaram Port G Ltd53 (for short “Duro Felguera”) where it was held that, ”(a)fter the (2015) amendment, all that the courts need to see is whether an arbitration agreement exists—nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Court’s intervention at the stage of appointing the arbitrator and this 53 H (2017) 9 SCC 729

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intention as incorporated in Section 11(6-A) ought to be respected.” A This has been re-affirmed by a 3-judge bench in Mayavati Trading Private Limited v. Pradyuat Deb Burman54 where it was held as under: “10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction B has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgment as Section 11(6A) is confined to the 15 examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment Duro Felguera, S.A. (supra) – see paras 48 & 59.” C

73. The following extract from Pravin Electricals (P) Ltd. v. Galaxy Infra & Engg. (P) Ltd.55is equally pertinent where the Court interpreted Section 11 (6A) to conclusively hold that a Section 11 judge cannot conduct a mini-trial at that stage: D “29. The facts of this case remind one of Alice in Wonderland. In Chapter II of Lewis Caroll’s classic, after little Alice had gone down the Rabbit hole, she exclaims “Curiouser and curiouser!” and Lewis Caroll states “(she was so much surprised, that for the moment she quite forgot how to speak good English)”. This is a case which eminently cries for the truth to come out between the E parties through documentary evidence and cross-examination. Large pieces of the jigsaw puzzle that forms the documentary evidence between the parties in this case remained unfilled. The emails dated 22nd July, 2014 and 25th July, 2014 produced here for the first time as well as certain correspondence between F SBPDCL and the Respondent do show that there is some dealing between the Appellant and the Respondent qua a tender floated by SBPDCL, but that is not sufficient to conclude that there is a concluded contract between the parties, which contains an arbitration clause. Given the inconclusive nature of the finding by CFSL together with the signing of the agreement in Haryana by G parties whose registered offices are at Bombay and Bihar qua works to be executed in Bihar; given the fact that the Notary who

54 (2019) 8 SCC 714 55 (2021) 5 SCC 671 H

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A signed the agreement was not authorised to do so and various other conundrums that arise on the facts of this case, it is unsafe to conclude, one way or the other, that an arbitration agreement exists between the parties. The prima facie review spoken of in Vidya Drolia (supra) can lead to only one conclusion on the facts of this case - that a deeper consideration of whether an arbitration agreement exists between the parties must be left to an Arbitrator who is to examine the documentary evidence produced before him in detail after witnesses are cross- examined on the same. For all these reasons, we set aside the impugned judgment of the Delhi High Court in so far as it conclusively finds that there is an Arbitration Agreement between the parties.” [emphasis supplied]

74. At this point, it would suffice to note that the Court in SMS Tea(supra) held that an arbitral agreement would be rendered inadmissible in evidence if the underlying contract is not stamped. It did not, however, state that an unstamped arbitration agreement would be rendered voidas held in Garware(supra) in the later decision. While SMS Tea(supra) extended the separability presumption in the context of the Registration Act, 1908 we will notice below that this presumption can also be extended in the context of Stamp Act, 1899 through harmonious construction. I. Discussion on Garware

75. The facts in Garware(supra) were that a sub-contrAct, for the installation of geo-textile tubes embankment with toe mound at village F Pentha in Odisha, was provided by the employer for prevention from coastal erosion. Owing to disputes between parties, the sub-contract was terminated. The Respondent filed a petition under Section 11 which was allowed by the Bombay High Court and sole arbitrator was appointed. On appeal, this Court primarily relied on SMS Tea(supra) to hold that G the arbitration agreement in an unstamped document cannot be acted upon and hence, an arbitrator could not be appointed until the unstamped agreement in question was impounded. Despite considering the amended Section 11(6A) and the 246th LCI Report(supra) to note that SBP(supra) and Boghara(supra) have been overruled, the Court held that “SMS Tea Estates ha(d), in no manner, been touched by the amendment of H

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Section 11(6-A)” since it was not excluded by either the 246th LCI A Report(supra) or the Statement of Object and Reasons of the 2015 Amendment. It was further held that as per Section 2(h) of the Indian Contract Act1872, an agreement becomes a contract only if it is enforceable by law and hence, an unstamped document would be unenforceable due to the bar under Section 35 of the Stamp Act, 1899. B The following paragraph has been doubted by NN Global(supra): “22. When an arbitration clause is contained “in a contract”, it is significant that the agreement only becomes a contract if it is enforceable by law. We have seen how, under the Stamp Act, an agreement does not become a contrAct, namely, that it is not enforceable in law, unless it is duly stamped. Therefore, even a C plain reading of Section 11(6-A), when read with Section 7(2) of the 1996 Act and Section 2(h) of the Contract Act, would make it clear that an arbitration clause in an agreement would not exist when it is not enforceable by law. This is also an indicator that SMS Tea Estates has, in no manner, been touched by the D amendment of Section 11(6-A).”

76. The above proposition of law in Garware(supra) appears to be incorrect. As noted earlier, the judgment in SMS Tea(supra) stands legislatively overruled as it was delivered in the pre-2015 amendment regime. Even though there is no express mention in the 246th LCI Report E (supra), the non-obstante clause effectively overrules it.

77. Now let us consider Section 2(g) and 2(h) of the Indian Contract Act, 1872 which read as under: “(g) An agreement not enforceable by law is said to be void; F (h) An agreement enforceable by law is a contract;” Incorporating the principle in Garware(supra) would mean that as per Section 2(g) and (h) of the Contract Act, 1872, an agreement would be rendered void-ab-initio, if it is not stamped. This would however be contrary to the legislative scheme of the Stamp Act, 1899 G as per which non-stamping/insufficient stamping is a curable defect as discussed earlier. Moreover, stamp duty is levied on the instrument and not the transaction.56

56 Board of Revenue v N. Narasimhan AIR 1961 Mad 504; A. Bapiraju v District Registrar AIR 1968 AP 142 H

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A 77.1. In Gulzari Lal Malwari v Ram Gopal57 Lord Williams J while discussing Section 35 of the Stamp Act, 1899 noted that there is no provision in the Stamp Act, 1899 which renders a document invalid: “There is a clear distinction to be drawn between invalidity and inadmissibility of documents. Certain statutes and sections render documents invalid if they are not stamped. No section of the Indian Stamp Act has this effect but an instance of a document being rendered invalid by the omission of stamps is contained in the English Stamp Act, s. 93, which provides:— A contract for sea insurance (other than such insurance as is referred to, in the fifty-fifth section of the Merchant Shipping Act, Amendment Act, 1862) shall not be valid unless the same is expressed in a policy of sea insurance” [emphasis supplied] 77.2. Moreover, the language of Section 11(6A) confines the scope of enquiry to only “existence.” and not even whether a contract is null and void, as recommended by the 246th LCI Report(supra). The question on validity and existence can be gone into by the arbitrator under Section 16 of the Arbitration Act, 1996 and not by the Court under Section 11 of the Arbitration Act, 1996. E J. Interplay between the Stamp Act 1899, Contract Act 1872 and the Arbitration Act, 1996 i) Arbitration Act, 1996 is a special legislation

78. In order to understand the interplay between the three Acts, reference to the relevant provisions is necessary. F i) Stamp Act, 1899: The residuary entry in Article 5(c) of Schedule I of the Indian Stamp Act, 1899 with the title “Agreements” as noted earlier, states “if not otherwise provided for” which, as held by us, brings under its ambit even an Arbitration Agreement. G Now, Instrument is defined under Section 2(14) as under: “(14) ”Instrument” includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or record.” H 57 AIR 1937 Cal 765

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Section 17 provides for the timing of stamping: A “ Instruments executed in India.—All instrument chargeable with duty and executed by any person in [India] shall be stamped before or at the time of execution.” “Execution” is defined in Section 2(12): B “Executed” or “Execution” used with reference to instruments, mean “signed” and “signature” ii) Indian Contract Act, 1872: An agreement under the Indian Contract Act, 1872 is defined in Section 2(e) as under: C

“Every promise and every set of promises, forming the consideration for each other, is an agreement”. Sections 2(g), 2(h) and 2(j) and Section 10 of the Indian Contract Act, 1872 state: D “(g) An agreement not enforceable by law is said to be void; (h) An agreement enforceable by law is a contract;” (j) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable E (10) All agreements are contracts if they are made by the free consent of parties competent to contrAct, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. iii) Arbitration Act, 1996: F Section 2(b) provides as under: “(b) arbitration agreement” means an agreement referred to in section 7" Let us now consider Section 7 of the Arbitration Act, 1996 G which specifically defines Arbitration agreement: “7 Arbitration agreement. — (1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which H

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A have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. B (4) An arbitration agreement is in writing if it is contained in— (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or [any other electronic means] other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.” [emphasis supplied] E 78.1. The following conclusions can be drawn from a consolidated reading of the above provisions in the three enactments: i) There are no specific requirements in Section 7 of the Arbitration Act, 1996 or any other provision in the Arbitration Act, 1996 as a whole, which provide for F necessary stamping for validity of an arbitration agreement or elaborate generally on the same. ii) Even though Section 10 of the Indian Contract Act, 1872 recognises oral agreements, a written agreement is sine- qua-non for a valid arbitration agreement. G iii) “Signing” is just an example of one of the conditions that may satisfy the form of an arbitration agreement. Thus, the mandatory requirement of a signature is ruled out for an arbitration agreement in Section 7 of the Arbitration Act,

1996. Since Section 7(2)(c) of the Arbitration Act, 1996 recognises even exchange of claim and defence as written H

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arbitration agreements, there is no signing requirement. Even A if a written arbitration agreement is not signed, the parties can still be bound to an arbitration agreement58. However, Section 17 of the Stamp Act, 1899 provides for the timing of stamping i.e. before or at the time of execution and the term “execution” is defined in the Stamp Act, 1899 to mean B “signature” iv) Even though arbitral “awards” are liable to stamp duty under Item 12 of the Stamp Act, 1899 and are specifically mentioned in Schedule I ; the arbitration agreement for the purpose of stamp duty, gets covered only under the residuary entry viz “if not otherwise provided for” in C Article 5(c). The Stamp Act, 1899 does not specifically refer to an arbitration agreement. v) As per Section 7 of the Arbitration Act, 1996, Arbitration Agreement can even be non-contractual. D vi) Section 7(4)(c) of Arbitration Act, 1996 envisages that the scope of arbitration is not limited to the dispute initially referred to arbitration, but also encompasses any disputes that are included in the pleadings of the parties i.e. statement of claim and defence. E 78.2 The Appointment Of Arbitrators By The Chief Justice Of India Scheme, 1996 provides inter alia for the original or certified copy of the “arbitration agreement” for a Section 11(6) application. I completely agree with the opinion of my Learned Brother, Justice K.M. Joseph that an arbitration agreement has to comply with the indispensable requirements under the Contract Act, 1872 such as competency to contract and presence of sound mind. However, when it comes to “formal” validity which could include requirements of signature, stamps, seals; I’m unable to concur that the evidentiary bar under Section 35 of the Stamp Act, 1899 should be juxtaposed with Section 2(g) and (2h) of the Contract Act, 1872 to make the agreement “void”. For example, as per Section 10 of the Contract Act, 1872, even oral agreements are

58 Chennai Container Terminal Pvt Ltd v. Union of India, 2007 3 Arb LR 218 (Mad), Fisser v. International Bank, 282 F.2d 231, 233 (2d Cir 1960), Travancore Devaswom Board v. Panchamy Pack, 2004 13 SCC 510; Also see, David St. John Sutton, Judith Gill and Matthew Gearing, Russell on Arbitration(24 th Edition); P. 49 H

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A valid but as per the “form” of arbitration agreement provided in Section 7 of Arbitration Act, 1996, it has to necessarily be in writing. Another point worth noting is that if an arbitration agreement can be for example, even non-contractual and does not necessarily require signature, how far the general provisions of Stamp Act, 1899 and the Contract Act, 1872 can apply to prove “formal” validity of an arbitration agreement B produced under Section 11(6) of the Arbitration Act, 1996? Section 2(h) of the Contract Act, 1872 states that an agreement enforceable by law is a contract but a plain reading of Section 7 of the Arbitration Act, 1996 may also prove that an “arbitration agreement” can be non- contractual. This is not to say that the provisions of the Contract Act, C 1872 or Stamp Act, 1899 would not apply. As rightly held in Vidya Drolia(supra) and noted by my Learned Brother Justice K.M. Joseph, pre-conditions to formation of contract under the Contract Act, 1872 must be met which includes free consent of the parties, absence of fraud and misrepresentation etc. However, in my view, in this reference, we are concerned with a formal requirement. The point being that when D a special law provides for the specific requirements for the “formal” validity of an arbitration agreement, it cannot be rendered void by a general law. An Arbitration agreement has special attributes59 and is not a conventional agreement in that sense. Moreover, none of the provisions of the Stamp Act, 1899 would lead us to the conclusion that an arbitration E agreement would be invalid/void-ab-initio when it is not stamped. Thus, the conclusion in Garware(supra) that an unstamped agreement would be rendered void is not only inconsistent with Section 7 of the Arbitration Act, 1996 but also the Stamp Act, 1899 as per which a document can at most, be rendered inadmissible in evidence. F 78.3 In the context of Arbitration Act, 1996 being a Special law, CR Datta’s treatise titled Law Relating to Commercial & Domestic Arbitration60 notes: “The Act of 1996 is a special Act and a Central Act which provides that this Act will prevail over any other law so far as the matters G governed by this Act are concerned. The Authority of the Law

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Courts has been curtailed. The Courts cannot intervene in any A manner dealt with by Part I of this Act unless specifically empowered to do so. A judicial authority may intervene or exercise its powers to the extent specified in Sections 8, 9, 11, 13, 14, 16, 1727, 34, 36, 37, 42, 43, 45, 50, 54, 58, 59, 70, 74, 77, 81 and 82 of the Act. See Union of India v Popular Construction Co. 2001 8 B SCC 470, United India Insurance Companty v Kumar Texturisers AIR 1999 Bom 118) Section 5 restrains the Courts from interfering with the process of arbitration except in the manner provided in the 1996. CDC Financial Services (Mauritius) Ltd v BPI Communications Ltd. 2005 (Supp.) Arb LR 558(SC)” [Emphasis supplied] C 78.4 At the cost of repetition, let us now refer to Section 5 of the Arbitration Act, 1996 to understand the special nature of the Act. As noted above, Arbitration Act, 1996 is a special legislation and Section 5 begins with a non-obstante clause which overrides powers of judicial authorities acting under any other law other than the Arbitration Act, D

1996. As argued by the learned Counsel for the Intervenor, Debesh Panda, the special nature of the Act is also established from the non- obstante clause in Section 5 of the Arbitration Act, 1996. On the Arbitration Act being a self-contained code, Justice Indu Malhotra61, comments as under: E “The Arbitration and Conciliation Act, 1996 is a self-contained code governing the law relating to Arbitration, including Section 5 which gives it an overriding effect over statutes. Once it is held that the 1996 Act is a self-contained code and is exhaustive, it carries with it the negative import that only such acts which are permissible in the statute may be done, and none others.” F

78.5 The use of the expression “so provided” in Section 5, disregards all forms of intervention except that, which is specified in Part I. Such intention is apparent from the language of the non-obstante clause. As noted earlier, this provision is yet another instance where Parliament went a step beyond the language employed in the UNCITRAL G Model Law of 1985. 78.6 The doctrine of generalia specialibus non derogant i.e. general law will yield to the special law is well-established in Indian 61 Justice Indu Malhotra, Commentary on the Law of Arbitration, Vol. I, 4th Ed., P. 248 H

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A jurisprudence. In the concurring opinion of Chandrachud DY J. (as he then was) in Ayyasamy(supra) on Section 8 of the Arbitration Act, 1996, it was noted: “44. ….Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted. There is a lot of difference between the two approaches. Once it is brought to the notice of the court that its jurisdiction has been taken away in terms of the procedure prescribed under a special statute, the civil court should first see whether there is ouster of jurisdiction in terms or compliance of the procedure under the special statute. The general law should yield to the special law - generalia specialibus non derogant. In such a situation, the approach shall not be to see whether there is still jurisdiction in the civil court under the general law. Such approaches would only delay the resolution of disputes and complicate the redressal of grievances and of course unnecessarily increase the pendency in the court.” 78.7 Having noted that the Arbitration Act, 1996 is a special legislation, and that general law should yield to special law, let us now examine the principle of harmonious construction for the purpose of this reference. ii) Harmonious Construction

62 H (1992) 1 SCC 558

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‘No rule of construction can require that, when the words of A one part of a statute convey a clear meaning … it shall be necessary to introduce another part of the statute which speaks with less perspicuity, and of which the words may be capable of such construction, as by possibility to diminish the efficacy of the [first part] 63.’ B [emphasis supplied] 79.1. On a harmonious reading of the inconsistencies in the provisions of the three different Acts quoted earlier, we find that the general law must yield to the special law in the sense, that an arbitration agreement cannot be rendered void on insufficient stamping by a general law, especially when none of the provisions of the Arbitration Act, 1996 which is a special Act provide for stamping. The requirement for the “formal” validity of an arbitration agreement under Section 7 of the Arbitration Act, 1996 would take precedence, considering the special nature of the Act and the principle of minimal judicial intervention. Applying the rule of construction that in cases of conflict between a specific law and a general law, the specific law prevails and the general law like the Contract Act, 1872 applies only to such cases which are not covered by the special law; I therefore, hold that Section 2(e), 2(g), 2(h) of the Contract Act, 1872 cannot override Section 7contained in the special law i.e. the Arbitration Act, 1996 when it comes to formal validity. E 79.2. Moreover, when the words of the statute in Section 11 of the Arbitration Act,1996 do not mention “validity” or even “inoperable and incapable of being performed” as mentioned in Section 45 of the Arbitration Act, 1996 or “prima facie no valid arbitration agreement” in Section 8 of the Arbitration Act, 1996, it must be F understood that the general words in a different statute such as the Contract Act, 1872 cannot override the specific words used in the special law. That is to say, that an arbitration agreement cannot be rendered “void” on insufficient stamping by a Section 11 judge when the scope of

63 G Anandji Haridas and Co. (P) Ltd. v. S.P. Kasture [AIR 1968 SC 565 : (1968) 1 SCR 661] , Patna Improvement Trust v. Lakshmi Devi [AIR 1963 SC 1077 : 1963 Supp (2) SCR 812] , Ethiopian Airlines v. Ganesh Narain Saboo [(2011) 8 SCC 539 : (2011) 4 SCC (Civ) 217] , Usmanbhai Dawoodbhai Memon v. State of Gujarat [(1988) 2 SCC 271 : 1988 SCC (Cri) 318] , South India Corpn. (P) Ltd. v. Board of Revenue [AIR 1964 SC 207 : (1964) 4 SCR 280] , Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth [(1984) 4 SCC 27] H

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A examination is only limited to the “existence” of the arbitration agreement and not “validity”. 79.3. Coming back to the evidentiary bar under Section 35 of the Stamp Act, 1899 it is important to understand that since the scope of a Section 11 judge is limited, the court cannot receive evidence in such cases. Before the 2015 Amendment to the Arbitration Act, 1996, as per the position laid down in SBP(supra), the Chief Justice had wide powers to receive evidence, including affidavits, and get evidence recorded at the stage of appointment of arbitrator. Under the amended Section 11, as noted before, the scope is “confined” to the examination of the “existence” of the arbitration agreement. Thus, post-amendment, it can most certainly not admit evidence. A Section 11 Court is “not an authority to receive evidence” as provided in Section 35 of the Stamp Act, 1899. Moreover, it is an undisputed position that Section 35 of the Arbitration Act, 1996 does not preclude an arbitrator to impound or admit evidence. It states “any person having by law or consent of parties, authority to receive evidence.” Thus, the statutory bar under Section 35 of the Stamp Act, 1899 would not apply when a document is produced at the stage of a Section 11 proceeding of the Arbitration Act, 1996. 79.4. It is essential to interpret the special law in a way that gives effect to its specific provisions, while also ensuring that it is consistent with the general law to the extent possible. Impounding at the stage of Section 11 would stall arbitral proceedings right at the outset because of the statutory bar under Section 35 of the Stamp Act, 1899. One way to harmonise Section 35 of Stamp Act, 1899 and Section 11 of the Arbitration Act, 1996 is for the Section 11 judge to defer necessary stamping and impounding to the arbitrator/collector, as applicable. A plain reading of Section 35 of the Stamp Act, 1899 makes it clear that it does not preclude an Arbitrator or Collector to impound the unstamped/ insufficiently stamped document. 79.5. In this context, even if we are to assume that the Stamp Act, 1899 is a substantive law, the view taken by us is not intended to undermine the Stamp Act, 1899 in any substantial way. This is because the primary objective being revenue generation, could still be achieved even if the collection of stamp duty is deferred to the arbitrator and not at the stage of a judge referring the matter for arbitration. Additionally, if such a contention is raised before the referring judge, she/he can also caution the arbitrator on the aspect of no/deficient stamp duty on the

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concerned instrument. Such a course will also protect the interest of the revenue and the substantive law. K. Implication of changing nature of transaction and the advent of the technology

80. As we are proceeding on the basis that an arbitration agreement is liable to stamp duty, this Court cannot also be oblivious of the technological advancements as commercial transactions are going beyond pen and paper agreements. The 2015 amendment to Section 7 of the Arbitration Act, 1996 which defines arbitration agreement recognizes electronic communication, bringing the process in conformity with Article 7 of the UNCITRAL Model law which was amended in C

2006. It modernized and broadened the form of arbitration agreement to conform with international contract practices. The exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement are now recognized as valid arbitration agreement. D 80.1. Dr. Peter Binder in International Commercial Arbitration and Mediation in UNCITRAL Model Law Jurisdictions 64 notes: “The wording in “exchange of letters,telex, telegrams or other means of telecommunication” indicates Model law’s flexibility towards future means of communication by being geared solely at the “record of the agreement” rather than the strict direct signature of the agreement. Incidentally, Article 5(Section III) of the Montreal Protocol No. 4 to the Warsaw Convention which concerns the formal requirements of an air waybill, provided the impetus for the wording “Any other means which would preserve a record of the carriage to be performed may, with the consent of the consigner, be substituted for the delivery of an air waybill.” The Protocol specifically had electronic means of communication in mind, as the aviation industry was among the first to use this technology in business.” [emphasis supplied] G 80.2. What logically follows from the above is that the traditional laws must not render these new forms of agreements unenforceable on insufficient stamping. Recently, the Stockholding Corporation of India 64 Supra at note 40; P. 67-68 H

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A Ltd. has been authorised to provide e-stamp services, which allows for the payment of stamp duties for some Indian States. The Indian Stamp Act (Collection of Stamp-Duty Through Stock Exchanges, Clearing Corporations and Depositories) Rules 2019 as amended through the Finance Act, 2021 has been brought about to build a pan-India securities market and to enhance revenue. It amended the definition of “execution” B to include signature even in electronic form. 80.3. However, the definition of “duly stamped” in Section 2(11) of the Stamp Act, 1899 remains unchanged: “‘Duly Stamped’ as applied to an instrument means that the C instrument bears an adhesive or impressed stamp of not less than the proper amount and that such stamp has been affixed or used in accordance with the law for time being in force.” [emphasis supplied] 80.4. The penalty for an instrument which is not “duly stamped” D is provided in Section 62 of the Stamp Act, 1899. In this discussion, we must be conscious that the Stamp Act, 1899 was enacted nearly 125 years ago and the lawmakers could not have contemplated the march of law and the myriad issues which would crop up through the advent of technology and also the new enactments such as the Arbitration Act,

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are recommending smart contract arbitration. Describing smart contracts and how arbitration can be used to resolve disputes, Chief Justice DY Chandrachud commented: “Technology and artificial intelligence are integrated into commercial transactions. One such example of integration of technology and contracts is a smart contrAct, where the terms and conditions of the contract are encoded. A breach in the terms of the contract would automatically enforce the contract. 80.7. Modern arbitration law focuses on substance over form67. Learned Counsel, Mr. Ramakanth Reddy appearing for Respondent No. 1, referred to a judgment delivered in 2008 in Great Offshore Ltd. v. C Iranian Offshore Engineering and Construction Company68 where the Court speaking through Dalveer Bhandari J. held as under: “59. The court has to translate the legislative intention especially when viewed in light of one of the Act’s “main objectives”: “to minimise the supervisory role of Courts in the arbitral process. D [See: Statements of Objects and Reasons of Section 4(v] of the Act].If this Court adds a number of extra requirements such as stamps, seals and originals, we would be enhancing our role, not minimising it. Moreover, the cost of doing business would increase. It takes time to implement such formalities. What is even more worrisome is that the parties’ intention to arbitrate would be foiled by formality. Such a stance would run counter to the very idea of arbitration, wherein tribunals all over the world generally bend over backwards to ensure that the parties’ intention to arbitrate is upheld. Adding technicalities disturbs the parties’ “autonomy of the will” (l’ autonomie de la volonti), i.e., their wishes. [For a general discussion on this doctrine see Law and Practice of International Commercial Arbitration, Alan Redfern and Martin Hunter, Street & Maxwell, London, 1986 at pages 4 and 53].

60. Technicalities like stamps, seals and even signatures are red tape that have to be removed before the parties can get what they really want - an efficient, effective and potentially cheap resolution of their dispute. The autonomie de la volonti 67 Supra at Note 59; P. 274 68 (2008) 14 SCC 240 H

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A doctrine is enshrined in the policy objectives of the United Nations Commission on International Trade Law (“UNCITRAL”) Model Law on International Commercial Arbitration, 1985, on which our Arbitration Act is based. [See Preamble to the Act]. The courts must implement legislative intention. It would be improper and undesirable for the courts to add a number of B extra formalities not envisaged by the legislation. The courts directions should be to achieve the legislative intention.” [emphasis supplied] 80.8 Relying on the above case, in Trimex International FZE vs C Vedanta Aluminum Limited, India 69 , this Court held that the implementation of a contract cannot be affected merely because offer and acceptance was made via email. 80.9 In the context of the evolving law, it is important to observe that although an arbitration agreement is liable to stamp duty under the residuary entry, the technicality of stamping places hurdles in ensuring efficiency and efficacy in arbitration proceedings. An arbitration agreement does not even mandatorily require signature for it to be valid as per Section 7 of the Arbitration Act, 1996. The Stamp Act, 1899 is rooted in the past and does not take into account the changing nature of transactions and enactments such as the Arbitration Act, 1996. This is an aspect which would require the attention of the legislature. J. Doctrine of Separability

81. It appears that the Court in Garware(supra) rejected the concept of separability when it held: F “15. …..it is difficult to accede to the argument made by the learned counsel on behalf of the respondent that Section 16 makes it clear that an arbitration agreement has an independent existence of its own, and must be applied while deciding an application under Section 11 of the 1996 Act.” G 81.1. Historically, an arbitration agreement was treated as an accessory to the main contract70. Even if the main contract was found to be invalid or unenforceable, the arbitration agreement contained 69 2010 (1) SCALE 574 70 Gary B. Born, International Commercial Arbitration (3rd ed., Kluwer Law International H 2014) P. 380

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therein was also considered void71. This diminished the effectiveness of arbitration as a dispute resolution mechanism since it made the enforceability of arbitration agreements dependent on the validity of the underlying contract. Arbitration clauses are uniformly regarded in almost every jurisdiction as separate from and not “an integral part” of the parties’ underlying contract. It is regarded as a general principle reflected in International Arbitration Conventions, national arbitration legislations, judicial decisions, institutional arbitration rules and arbitral awards72. The early statutory recognition of the separability doctrine has also been recognized in United States with the separability presumption being a matter of substantive federal arbitration law.73 Even in English law, the principle of separability stands codified under C Section 7 of the English Arbitration Act, 1996. It has been identified as one of the cornerstones of arbitration in multiple jurisdictions. 81.2 The argument advanced by the learned Counsel, Gagan Sanghi for the Appellants that the doctrine of separability is a legal fiction, should not be accepted in light of the well-established jurisprudence in India as this doctrine has been consistently upheld by this Court74. Moreover, it stands codified in Section 16(1) of the Arbitration Act, 1996 which reads as under: “16(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, – (i) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and F (ii) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.”

71 Union of India v Kishorilal Gupta & Bros (1959) 1 SCR 493 G 72 Supra at note 70; Page 379-380. 73 Buckeye Check Cashing Inc. v. Cardegna, 2006 SCC OnLine US SC 14 74 National Agricultural Co-operative Marketing federation India Ltd. v Gains Trading Limited (2007) 5 SCC 692; Naihati Jute Mills Ltd. v Khayaliram Jagannath AIR 1968 SC 522; P Manohar Reddy & Bros. v. Maharashtra Krishna Valley Development Corporation & Ors (2009) 2 SCC 494 H

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A 81.3This Court in NN Global(supra) discussed judgments in US,UK and France, noting the importance of this principle in modern and contemporary arbitral jurisprudence: “4. It is well settled in arbitration jurisprudence that an arbitration agreement is a distinct and separate agreement, which is independent from the substantive commercial contract in which it is embedded. This is based on the premise that when parties enter into a commercial contract containing an arbitration clause, they are entering into two separate agreements viz. (i) the substantive contract which contains the rights and obligations of the parties arising from the commercial transaction; and, (ii) the arbitration agreement which contains the binding obligation of the parties to resolve their disputes through the mode of arbitration.”

81.4 My learned Brother, Justice K.M. Joseph in the majority opinion notes that the entire basis of the reference stands removed since we are proceeding on the basis that even a standalone arbitration agreement is liable to stamp duty. His opinion that the objective behind the principle of treating an arbitration agreement as a separate agreement is to create a mechanism, wherein, the arbitral agreement survives the Contract so that the disputes falling within the Arbitration Agreement E can be resolved, is correct. But I’m unable to agree with the proposition that is canvassed that since an arbitration agreement is liable to stamp duty, the separability presumption doesn’t take us further in this case. Let me set out the reason for my disinclination to accept such proposition. 81.5 As earlier stated in this opinion, the separability doctrine protects the arbitration clause even if the validity of the main contract is attacked. Therefore, if an arbitration agreement remains unaffected even if the main contract is null/void on issues of fraud or misrepresentation, it should not logically render an arbitration agreement, void on a technicality/formality, like stamping. The underlying rationale behind the principle of separability would then be made nugatory. The idea that an arbitration agreement is separate and independent with its own validity requirements, is to ensure that there is no hindrance to the enforceability of an arbitration agreement. This doctrine is also important to reduce circumstances in which the arbitral process may be halted/delayed. In H SMS Tea(supra), it was noted that the doctrine of separability can extend

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to an unregistered document, but not to an unstamped document as the bar under Section 35 is absolute. As I have noted above, the bar under Section 35 can be cured and the stamp duty can be collected at a later stage. Thus, NN Global(supra) rightly overruled SMS Tea(supra) on this aspect. Historically, the separability doctrine was introduced in order to protect the arbitration clause which, in turn, enabled arbitrators to adjudicate on the validity of the main contract75. Even though the doctrine of separability and Kompetenz Kompetenz are distinct as noted in NN Global(supra), reconciling the two principles would ensure that an arbitrator can rule on the objections of validity, existence as well as necessary stamping, if required. The doctrine of Kompetenz Kompetenz is discussed in greater detail in the next section. C

82. Turning to the decision in Garware(supra), it appears that the Court in Garware(supra) rejected the concept of severability only by relying on SBP(Supra) when it held: “15. In view of the law laid down by seven-Judge Bench,[SBP(Supra)] it is difficult to accede to the argument made by the learned counsel on behalf of the respondent that Section 16 makes it clear that an arbitration agreement has an independent existence of its own, and must be applied while deciding an application under Section 11 of the 1996 Act.”

83. In SBP(Supra), as we have noticed earlier in this opinion, stood legislatively overruled as a judge at the Section 11 stage could conduct detailed adjudication and make a conclusive determination at the pre-referral stage without deferring it to the arbitrator. As highlighted above, Section 16 and Section 11 of the Arbitration Act, 1996 indicates that there is an overlap when it comes to the word “existence”. As F Section 16 specifically deals with both existence and validity whereas Section 11 only deals with existence, the former should be given more weight. As such, the doctrine of Kompetenz Kompetenz comes into play as the arbitrator can decide on the validity of an agreement and the referral judge needs to confine his scrutiny to the existence of the arbitration agreement. However, in SBP(supra) it was generally held G that the referral judge should decide on all aspects. If such a view is to be applied for answering the present reference, a mini-trial will have to 75 HM Holtzmann and JE Neuhaus,A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History and Commentary (Kluwer Law and Taxation The Hague 1989) 485 H

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A be conducted by the referral judge. The question to be asked here is should we then push the Section 11 judge to deal with so many things that he/she left in a situation like Little Alice in the play Alice in Wonderland as described in Praveen Electricals(supra)?

84. In the referral order in NN Global(supra),the paragraph 29 B in Garware(supra) was doubted. In the Garware(supra) decision, this Court relied on United India Insurance Co. ltd. v. Hyundai Engg. & Construction Co. Ltd. 76 (for short “Hyundai Engg.). The paragraph 29 is extracted below for the discussion to be followed thereafter: C “29. This judgment in Hyundai Engg. case [United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607: (2019) 2 SCC (Civ) 530] is important in that what was specifically under consideration was an arbitration clause which would get activated only if an insurer admits or accepts liability. Since on facts it was found that the insurer repudiated the claim, though an arbitration clause did “exist”, so ‘to speak, in the policy, it would not exist in law, as was held in that judgment, when one important fact is introduced, namely, that the insurer has not admitted or accepted liability. Likewise. in the facts of the present case. it is clear that the arbitration clause that is contained in the sub-contract would not “exist” as a matter of law until the sub- contract is duly stamped, as has been held by us above. The argument that Section 11 (6-A) deals with “existence”, as opposed to Section 8. Section 16 and Section 45, which deal with “validity” of an arbitration agreement is answered by this Court’s understanding of the expression “existence” in Hyundai Engg. F case [United India Insurance Co. Ltd. v. Hyundai Engg. & Construction Co. Ltd., (2018) 17 SCC 607 : (2019) 2 SCC (Civ) 530] . as followed by us.” 84.1. In Hyundai(supra), the issue of stamping was not at all a matter of consideration and the Court decided on the arbitrability of the G dispute and whether it was an excepted matter and in that process, held that the arbitration agreement would not “exist-in-law”, as the arbitration clause was contingent on whether the insurer accepted liability. In these circumstances, the application of the proposition in Hyundai

76 H (2018) 7 SCC 607

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Engg(supra) to deal with the issue of unstamped document in A Garware(supra) appears to be an incorrect approach. This is because in Garware(supra), the Court found that the issue of stamping would go into the existence of the arbitration agreement in law. This was done by erroneously importing the principle enunciated in Hyundai(supra) and therefore the earlier Hyundai(supra) which had nothing to do with the stamping of the document, should have been distinguished. At this point, we may also notice the argument of the Learned Amicus who argued that the Court in Hyundai Engg(supra) relied on Oriental Insurance Co. Ltd. v. Narbheram Power and Steel (P) Ltd77 which never had the occasion to interpret Section 11(6A). For these reasons, I am of the considered view that applying the Hyundai(supra) principle to Garware(supra) is not acceptable. Consequently, the finding of the Court in Para 147.1 in Vidya Drolia(supra) placing reliance on the above paragraph viz. Para 29 in Garware(supra) also appears to be incorrect. The proposition of law in NN Global(supra) is therefore found to be correct. D L. Kompetenz Kompetenz and the issue of Judicial Logjam in India

85. Legal scholars have noted that the principle of Kompetenz Komptenz has been adopted in various forms in different countries78. Article 16 of the UNCITRAL Model Law adopted the principle of Kompetenz Kompetenz providing that an arbitral tribunal has the E jurisdiction to investigate and rule on its own jurisdiction. In a recent decision of the US Supreme Court in Henry Schein, Inc. v Archer and White Sales, Inc79, it was held that where an arbitration clause delegates the decision of arbitrability to arbitrators, Courts should have no say even if they consider the argument in favour as “wholly groundless”. F Justice Brett Kavanaugh opined: “Just as a Court may not decide a merits question that the parties have delegated to an arbitrator, a Court may not decide an arbitrability question that the parties have delegated to an arbitrator.” G

77 (2018) 6 SCC 534 78 John J. Barcello III, Who Decides the Arbitrators’ Jurisdiction? Separability and Competence-Competence in Transnational Perspective, Vanderbilt Journal of Transnational Law, Vol. 36, No.4, October 2003 79 2019 SCCOnline US SC 1 H

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A Proceeding further, Section 16(1) of the Arbitration Act, 1996 reads as under: “16. Competence of arbitral tribunal to rule on its jurisdiction.— (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence B or validity of the arbitration agreement, and for that purpose,— (a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

C (b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.” 85.1 It is clear from Section 16(1) of Arbitration Act, 1996 which uses the word “including” that an arbitral tribunal can not only rule on its own jurisdiction but also “any” objections on existence or validity. This Court in Weatherford Oiltool Middle East Limited vs Baker Hughes Singapore PTE80 where the issue concerned the validity of an unstamped document, noted as under: “8. The bare reading of the afore-stated provision makes it clear that arbitral tribunal is competent not only to rule on its own jurisdiction but to rule on the issue of the existence or validity of the arbitration agreement. It further clarifies that an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contrAct, and that a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.” F 85.2. Discussing the Kompetenz Kompetenz principles in NN Global(supra), it was noted: “4.3. The doctrine of kompetenz – kompetenz implies that the arbitral tribunal has the competence to determine and rule on its own jurisdiction, including objections with respect to the existence, G validity, and scope of the arbitration agreement, in the first instance, which is subject to judicial scrutiny by the courts at a later stage of the proceedings. Under the 8 Arbitration Act, the challenge before the Court is maintainable only after the final award is passed

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as provided by sub-section (6) of Section 16. The stage at which the order of the tribunal regarding its jurisdiction is amenable to judicial review, varies from jurisdiction to jurisdiction. The doctrine of kompetenz – kompetenz has evolved to minimize judicial intervention at the pre-reference stage, and reduce unmeritorious challenges raised on the issue of jurisdiction of the arbitral tribunal.” [emphasis supplied] 85.3. Justice Thakker emphasized this in his dissenting opinion in SBP(supra) where it was held that the legislature intended to allow the tribunal to rule on its own jurisdiction and the function of the Chief Justice C under Section 11(6) was only to “appoint an arbitrator without wasting any time.” 85.4. At this point we may benefit by referring to George A. Bermann whose article titled “Role of Courts at the threshold of Arbitration”81 would havesome relevance in this discussion: D “Positions at the polar ends of the spectrum of judicial involvement are not especially attractive. A system that permits plenary judicial enquiries into all aspects of enforceability of arbitration agreements prior to arbitration risks inviting costs, delay and judicial involvement in a very big way, contrary to arbitration’s basis premises. On the E other hand, a system that treats access to a court for these purposes as wholly off-limits, irrespective of the seriousness of the challenge, risks exacting too great a price in terms of arbitral legitimacy. Efficacy may be achievable through less drastic means.” F 85.5. Specific to the Indian context, while discussing Kompetenz Kompetenz, the overburdened judiciary and huge pendency of cases in our Courts cannot also be overlooked. The intent behind preferring arbitration would stand defeated, if the Court is expected to deal not only with the issue of existence but also validity of the agreement, at the G stage of appointment of the arbitrator. In this context, the following observations were made in the 246th LCI report (supra) noted:

81 George A. Bermann, The Role of National Courts at the Threshold of Arbitration, 28 American Review of International Arbitration 291 (2017) Available at https:// scholarship.law.columbia.edu/faculty_scholarship/3012 H

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A “22. Judicial intervention in arbitration proceedings adds significantly to the delays in the arbitration process and ultimately negates the benefits of arbitration. Two reasons can be attributed to such delays. First, the judicial system is over-burdened with work and is not sufficiently efficient to dispose cases, especially commercial cases, with the speed and dispatch that is required. Second, the B bar for judicial intervention (despite the existence of section 5 of the Act) has been consistently set at a low threshold by the Indian judiciary, which translates into many more admissions of cases in Court which arise out of or are related to the Act.” C [emphasis supplied] 85.6.Considering the large pendency of cases as noted by the 246th LCI Report(supra), it is essential that Section 16 of the Arbitration Act, 1996 is given full play. Discussing the history of arbitration law in India, the 246th LCI Report(supra) quoted the observations of Justice

D D.A. Desai in Guru Nanak Foundation v Ratan Singh and Sons 82

where commenting on the working of the Arbitration Act, 1940, it was noted that the challenge to arbitral proceedings in Courts have made “lawyers laugh and legal philosophers weep”. The situation is not different today as was recently observed by this Court in M/s Shree Vishnu E Constructions v. The Engineer in Chief Military Engineering Service and others83 where it was noted that several applications under section 11 were decided and disposed of after a period of four years which defeated the very purpose of the amended Arbitration Act, 1996. Such observation was made on a detailed report/statement on the number of pending section 11 applications before the Telangana High Court. This F Court noticed that even an application filed in the year 2006 was still pending. The High Court Chief Justices across the country were accordingly requested to ensure that applications under section 11, be decided within a period of six months. 85.7 This Court in the recent judgment in Intercontinental Hotels G Group (India) Private Ltd. v. Waterline Hotels Pvt. Ltd 84 on the issue of insufficiently /incorrectly stamped documents, proceeded to appoint the arbitrator under Section 11(6), considering the time- 82 (1981) 4 SCC 634 83 SLP(C) No. 5306/2022 dated 1.4.2022 H 84 2022 SCC OnLine SC 83

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sensitivity while dealing with arbitration. It left open the issue of stamping to be decided at a later stage. 85.8 Importantly, Section 11(13) of the Arbitration Act, 1996 provides that appointment of Arbitrators should be made within 60 days and such a provision makes it amply clear that substantive adjudication cannot be done by Courts, at the pre-referral stage. This was canvassed in Garware(supra) but the Court instead set a deadline for 45 days for adjudication and 15 days for appointment of arbitrator with the following observation: “37. One reasonable way of harmonising the provisions contained in Sections 33 and 34 of the Maharashtra Stamp Act, which is a C general statute insofar as it relates to safeguarding revenue, and Section 11(13) of the 1996 Act, which applies specifically to speedy resolution of disputes by appointment of an arbitrator expeditiously, is by declaring that while proceeding with the Section 11 application, the High Court must impound the instrument which has not borne stamp duty and hand it over to the authority under the Maharashtra Stamp Act, who will then decide issues qua payment of stamp duty and penalty (if any) as expeditiously as possible, and preferably within a period of 45 days from the date on which the authority receives the instrument. As soon as stamp duty and penalty (if any) are paid on the instrument, any of the parties can bring the instrument to the notice of the High Court, which will then proceed to expeditiously hear and dispose of the Section 11 application. This will also ensure that once a Section 11 application is allowed and an arbitrator is appointed, the arbitrator can then proceed to decide the dispute within the time frame provided by Section 29A of the 1996 Act.” 85.9 The above enunciation in Garware(supra) as is apparent goes against the legislative mandate which had prescribed the deadline of 60 days for appointment of arbitrators under Section 11(13) of the Arbitration Act, 1996. The criticism that a deadline of 45 days would be impractical, cannot also be brushed aside lightly. N. Discussion on Vidya Drolia

86. This case was concerned with the arbitrability of landlord- tenant disputes and the forum before which the issue of arbitrability H

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A must first be raised. The paragraph 146 as quoted below may require a relookin the context of the issue under consideration. “146. We now proceed to examine the question, whether the word “existence” in Section 11 merely refers to contract formation (whether there is an arbitration agreement) and excludes the question of enforcement (validity) and therefore the latter falls outside the jurisdiction of the court at the referral stage. On jurisprudentially and textualism it is possible to differentiate between existence of an arbitration agreement and validity of an arbitration agreement. Such interpretation can draw support from the plain meaning of the word “existence”. However, it is equally possible, jurisprudentially and on contextualism, to hold that an agreement has no existence if is not enforceable and not binding. Existence of an arbitration agreement presupposes a valid agreement which would be enforced by the court by relegating the parties to arbitration. Legalistic and plain meaning interpretation would be contrary to the contextual background including the definition clause and would result in unpalatable consequences. A reasonable and just interpretation of existence requires understanding the context. the purpose and the relevant legal norms applicable for a binding and enforceable arbitration agreement. An agreement evidenced in writing has no meaning unless the parties can be compelled to adhere and abide by the terms. A party cannot sue and claim rights based on an unenforceable document. Thus, there are good reasons to hold that an arbitration agreement exists only when it is valid and legal. A void and unenforceable understanding is no agreement to do anything. F Existence of an arbitration agreement means an arbitration agreement that meets and satisfies the statutory requirements of both the Arbitration Act and the Contract Act and when it is enforceable in law.” 86.1. As can be seen, the Court equated existence and validity G and it was held that a contract only exists if it is valid. And it is valid only if it is enforceable. As far as the issue in the present case is concerned, the authors’ Comments in Russell on Arbitration85 (24th Edition) in the context of English law provide useful pointers in this context:

85 H Supra at note 58; Chapter 7, P. 369

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“Existence and Validity of the arbitration agreement. .. the A Court draws a distinction between existence of the arbitration agreement, which is likely to be a matter for the Court(unless a stay under the inherent jurisdiction is granted) and its validity, which wherever possible should be left to the arbitrators.” [emphasis in original] B 86.2 I have already discussed that in the Indian regime, the Arbitrator under Section 16 has the jurisdiction to decide on “existence” and “validity”. A plain reading of Section 11(6A) would show that the examination by Court is confined only to “existence” and not even “validity”. Moreover, in the present reference, we are only concerned C with the formal requirement of stamping and not arbitrability. Applying contextual interpretation to render an arbitration agreement void on the formal requirement of stamping would defeat the very purpose of the Arbitration Act, 1996. A document cannot be rendered invalid or unenforceable especially if the defect is curable under the Stamp Act, D 1899 as noted earlier. Moreover, none of the provisions in the Stamp Act, 1899 have the effect of rendering a document invalid. Thus, we find the position in Vidya Drolia(supra)to the extent that it relies on Garware(supra) to be incorrect. O. Conclusion E

87. Harking back to Charles Evans Hughes with whose words we began the judgment, let us conclude with the following quote of the same judge reflected in Prophets By Honor86: “There are some who think it desirable that dissents should not be disclosed as they detract from the force of the judgement. Undoubtedly, they do. When unanimity can be obtained without sacrifice of conviction, it strongly commends the decision to public confidence. But unanimity, which is merely formal, which is recorded at the expense of strong, conflicting views, is not desirable in a court of last resort, whatever may be the effect on public opinion at the time. This is so because what must ultimately sustain the court in public confidence of is the character and independence of the judges.”

86 Alan Barth, Prophets with Honor,1974 Ed. P 3-6 H

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A 87.1 The practice of dissent in judicial decision-making process plays a critical role in revealing constitutional commitment to deliberative democracy. Allowing judges to express differing views and engage in a dialogue about the law and its interpretation can potentially lead toa more nuanced and refined understanding of the law, as the Court grapples B with competing interpretations and seeks to reconcile them in a principled manner. 87.2 Confronted with a similar situation which is confronting us today where the present opinion is the minority one, Justice Stephen Breyer of the US Supreme Court in his dissenting opinion 87 in a C question in the context of Federal Arbitration Act (FAA) spoke of interpreting not only the purpose of the Statute but also the likely consequence: “When interpreting a statute, it is often helpful to consider not simply the statute’s literal words, but also the statute’s purposes and the likely consequences of our interpretation. Otherwise, we risk adopting an interpretation that, even if consistent with text, creates unnecessary complexity and confusion.” 87.3. The objective behind the enactment of the Arbitration Act, 1996 was to, inter alia, avoid procedural complexity and the delay in litigation before Courts. Impounding and stamping at the Section 11 stage would frustrate the very purpose of the amended Arbitration Act, 1996 as the enforcement of arbitration agreements would be stalled on an issue, which is capable of being resolved at a later stage. To defer stamping to the stage of the arbitrator would in my view achieve the objective of both the Arbitration Act, 1996 and the Stamp Act, 1899.

87.4. The contours of the jurisdiction of the judge referring matters for arbitration, cannot be permitted to suffer from confusion and ambiguity. As can be seen, the present 5 judge-Bench could not provide clarity on the issue referred to us, on account of the fractured verdict, leading to legal uncertainty. The constitution of a larger Bench in this Court is certainly not commonplace as the last occasion when 7 judges assembled was in the year 2017. Around 5 matters as I am informed,

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are already awaiting the attention of 7 judges Bench. In such backdrop, the interplay between the Acts and how its objective is to be achieved in the course of Arbitral proceedings either at the referral stage or thereafter is much too important to be left lingering for a clarificatory verdict by a larger Bench. Therefore, I would appeal to the legislative wing of the State to revisit the Amendments which may be necessary in the Stamp Act, 1899 in its application to the Arbitration Act, 1996. The State might put into place a convenient mechanism which would efface the inconsistencies in both the Arbitration Act, 1996 and the Stamp Act, 1899. If we look at the legislative intent of the Arbitration Act, 1996 and what our country is hoping to be as the destination of choice for Arbitration, I’m of the considered opinion that it would be appropriate to interpret the statutory interplay in a constructive manner without defeating the legislative intent and thwarting the speedy referral to arbitration.

88. Following the above discussion, my opinion on the referred issue are as follows: i) The examination of stamping and impounding need not be done at the threshold by a Court, at the pre-reference stage under Section 11 of the Arbitration Act, 1996. ii) Non-stamping/insufficient stamping of the substantive contract/instrument would not render the arbitration agreement non-existent in law and unenforceable/void, for the purpose of referring a matter for arbitration. Garware(supra) wrongly applied the principle in Hyundai(supra) to hold that an arbitration agreement would not exist-in-law if it is unstamped/insufficiently stamped. An arbitration agreement should not be rendered void if it is suffering stamp deficiency which is a curable defect. To this extent, Garware(supra) and Hyundai(supra) do not set out the correct law. G iii) The decision in SMS Tea(supra) stands overruled. Paragraphs 22 and 29 in Garware (supra) which were approved in paragraphs 146 and 147 in Vidya Drolia(supra) are overruled to that extent. H

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A 89. The invaluable assistance rendered by Mr. Gourab Banerjee, learned Senior Counsel as the Amicus Curiae deserves a special mention in finalizing this opinion.

Bibhuti Bhushan Bose Reference answered. B (Assisted by : Shubhansh Thakur, Sahil Rajan and Rahul Rathi, LCRAs)