Arbitration and Conciliation Act, 1996: s.11(6) read with s.11(12) – Appointment of arbitrator – Arbitration agreement in unstamped Contract – In the instant case, petitioner and respondent entered into three agreements – Respondent issued letters to the petitioner terminating the three agreements – Pursuant to this, petitioner asked respondent to pay certain amount which was refused by respondent – Thereafter, petitioner issued notices invoking arbitration clauses containing in three agreements – In reply, respondent raised a contention that stamp duty was not paid on agreements – However, respondent proposed for referring the dispute to mediation, but it failed eventually – Consequently, respondent neither agreed nor suggested any of the names of arbitrators – Three Arbitration petitions filed by the petitioner under s.11(6) read with s.11(12) of the Act, 1996 seeking appointment of a sole arbitrator to adjudicate upon the aforesaid disputes - Held: Since the arbitration agreements contained in all the three agreements were not disputed by the respondent, and since the respondent itself had proposed to consolidate the disputes under the said agreements and to refer them to a sole arbitrator in one single arbitration, it does not lie in the mouth of the respondent now to say that the petitions seeking appointment of a sole arbitrator should not be entertained, as the matter with regard to the determination of requisite stamp duty under the Maharashtra Stamp Duty Act on the two agreements is pending before the Collector – There is no legal impediment to the enforceability of the arbitration agreement pending payment of stamp duty on the substantive contract – Of course, the said issue is pending under consideration by the Constitution Bench, the matters which are still pending at a pre-appointment stage, cannot be left hanging until the larger Bench settled the issue – A former Judge of High Court appointed as a sole arbitrator to adjudicate upon dispute – Stamp Duty. Allowing the petitions, the Court
HELD: 1. When the facts of the present petitions are examined, it deserves to be noted that the execution of three agreements, namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement between the petitioner and the respondent has not disputed. The letters of termination terminating the said three agreements by the respondent on 9 th April, 2020, and other correspondence that ensued between the parties as stated in the earlier part of the judgment are also not disputed. Though the respondent, in response to the arbitration notices given by the petitioner had raised a contention in the letter dated 17th January 2021 that the agreements were not stamped and that consequences would follow as per the Maharashtra Stamp Act, the respondent proposed to amicably resolve the disputes through Mediation, and also suggested in the alternative to consolidate the disputes under the three agreements to be heard by a sole arbitrator in one single arbitration. The efforts to amicably resolve the disputes through Mediation having failed, the petitioner thereafter also agreed to consolidate the disputes under the three agreements to be heard by a sole arbitrator in one single arbitration, as proposed by the respondent. The petitioner also proposed the names of the arbitrators, however, the said names were not agreeable to the respondent. The respondent also failed to propose any names for the appointment of a sole arbitrator. [Paras
14 and 15][1008-G-H; 1009-E-H]
2. Since the arbitration agreements contained in all the three agreements namely, Onshore Service Agreement, Lease Agreement and Drilling Service Agreement were not disputed by the respondent, and since the respondent itself had proposed to consolidate the disputes under the said agreements and to refer them to a sole arbitrator in one single arbitration, this court is of the opinion that now it does not lie in the mouth of the respondent to say that the petitions seeking appointment of a sole arbitrator should not be entertained, as the matter with regard to the determination of requisite stamp duty under the Maharashtra Stamp Duty Act on the two agreements is pending before the Collector. There is no legal impediment to the enforceability of the arbitration agreement pending payment of stamp duty on the substantive contract. Of course, the said issue is pending under consideration by the Constitution Bench, the matters which are still pending at a pre-appointment stage, cannot be left hanging until the larger Bench settled the issue. [Para 16][1010-B-E]
N.N Global Mercantile Unique Pvt. Ltd. v. Indo. Unique Flame Ltd. and Others (2021) 4 SCC 379, Intercontinental Hotels Group (India) Private Limited and Another v. Waterline Hotels Private Limited (2022) 7 SCC 662 – followed.
SMS Tea Estates (P) Ltd v. Chandmari Tea Co. (P) Ltd (2011) 14 SCC 66 : [2011] 9 SCR 382, Garware Wall Ropes Ltd. v. Coastal Marine Constructions & Engg. Ltd (2019) 9 SCC 209 : [2019] 5 SCR 579, Vidya Drolia v. Durga Trading Corporation (2021) 2 SCC 1 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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