TMI Blog2018 (9) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Stamp Act, 1899. Only awards which are decisions in writing by an arbitrator or umpire, made in British India, on a reference made otherwise than by an order of the Court in the course of a suit would be included. “Award” under Item 12 of Schedule I of the Indian Stamp Act, 1899 has remained unchanged till date - this “award” would refer only to a decision in writing by an arbitrator or umpire in a reference not made by an order of the Court in the course of a suit. This would apply only to such award made at the time in British India, and today, after the amendment of Section 1(2) of the Indian Stamp Act, 1899 by Act 43 of 1955, to awards made in the whole of India except the State of Jammu and Kashmir. This being the case, we are of the view that the expression “award” has never included a foreign award from the very inception till date. Consequently, a foreign award not being includible in Schedule I of the Indian Stamp Act, 1899, is not liable for stamp duty. There is no doubt whatsoever that if stamp duties are leviable in India on foreign awards, the imposition should not be substantially more onerous than the stamp duty that is imposed on recognition or enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Arbitration and Conciliation Act, 1996 were filed by the Appellant which were dismissed on 27.09.2016, stating that a petition under Section 34 would not be maintainable as against a foreign award, citing this Court s judgment in Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc., (2012) 9 SCC 552. Meanwhile, the Respondent filed a petition under Section 47 of the 1996 Act, dated 05.08.2015, to enforce the said award. As stated hereinabove, all objections to the said award were rejected by the learned Single Judge on 09.02.2017. An appeal to the Division Bench resulted in an Order dated 14.03.2018, stating that in view of Section 50 of the 1996 Act, the said appeal would not be maintainable. This is how the present SLP has been filed against the decision of the learned Single Judge. 4. Shri K.V. Viswanathan, learned senior advocate, appearing on behalf of the Appellant, has submitted before us, that given the provisions of the Indian Stamp Act, 1899, it is clear that a foreign award would be covered by the said Act. This being so, and stamp duty not having been paid, the said foreign award cannot be enforced. He relied strongly on a judgment of the Punjab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... award to be stamped. A without prejudice argument was also made that under Section 48(2)(b), even if a foreign award were required to be stamped, but is not stamped, enforcement of such award would not be contrary to the fundamental policy of Indian law. 6. Having heard learned counsel for the parties, it is important to first set out the relevant provisions of the Indian Stamp Act, 1899. Section 1 of the Indian Stamp Act, 1899 as it originally stood, reads as follows: 1. Short title, extent, and commencement.-(1) This Act may be called the Indian Stamp Act, 1899. (2) It extends to the whole of British India inclusive of Upper Burma, British Baluchistan, the Santal Parganas, and the Pargana of Spiti; and (3) It shall come into force on the first day of July 1899. Section 2(14) defines instrument as follows: 2. Definitions.- xxx xxx xxx (14) Instrument includes every document by which any right or liability is or purports to be created, transferred, limited, extended, extinguished, or recorded: Instruments chargeable with duty are dealt with by Section 3. Section 3 states as follows: 3. Instruments chargeable with duty.-Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows: Description of Instrument Proper Stamp-duty 12. AWARD, that is to say, any decision in writing by an arbitrator or umpire, not being an award directing a partition, on a reference made otherwise than by an order of the Court in the course of a suit.- (a) where the amount or value of the property to which the award relates as set forth in such award does not exceed ₹ 1000; The same duty as a bond (No. 15) for such amount. (b) in any other case. Five rupees. Exemption Award under the Bombay District Municipal Act, 1873 (Bom. Act 6 of 1873), Section 81, or the Bombay Hereditary Offices Act, 1874 (Bom. Act 3 of 1874), Section 18. 7. The main bone of contention in the present appeal is whether the expression award would include a foreign award. 8. In order to determine this question, it is important to see the state of the law insofar as arbitration is concerned in the year of the Indian Stamp Act, 1899. At this point of time, there were two sets of laws dealing with arbitration. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission or any person claiming under him, and upon payment of the fees and charges due in respect of the arbitration and award, and of the costs and charges of filing the award, cause the award, or a signed copy of it, to be filed in the Court; and notice of the filing shall be given to the parties by the arbitrators or umpire. (3) Where the arbitrators or umpire state a special case under section 10, clause (b), the Court shall deliver its opinion thereon; and such opinion shall be added to, and shall form part of, the award. Section 15, which is important, states as follows: 15. Award when filed to be enforceable as a decree.-(1) An award on a submission, on being filed in the Court in accordance with the foregoing provisions, shall (unless the Court remits it to the reconsideration of the arbitrators or umpire, or sets it aside), be enforceable as if it were a decree of the Court. (2) An award may be conditional or in the alternative. 10. On a reading of the aforesaid provisions of these Acts, it becomes clear that the only award that is referred to in the Indian Stamp Act, 1899 is an award that is made in the territory of British India provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be recognized and enforced in signatory countries, India being one. In this Act, foreign award is defined as follows: 2. Interpretation.-In this Act foreign award means an award on differences relating to matters considered as commercial under the law in force in India, made after the 28th day of July, 1924,- (a) in pursuance of an agreement for arbitration to which the Protocol set forth in the First Schedule applies; (b) between persons of whom one is subject to the jurisdiction of some one of such powers as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be parties to the Convention set forth in the Second Schedule, and of whom the other is subject to the jurisdiction of some other of the powers aforesaid; and (c) in one of such territories as the Central Government being satisfied that reciprocal provisions have been may by like notification, declare to be territories to which the said convention applies, and for the purposes of this Act an award shall not be deemed to be final if any proceedings for the purposes of contesting the validity of the award a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been made, may, by notification in the official Gazette, declare to be territories to which the said Convention applies. 15. As is well-known, the present Arbitration and Conciliation Act, 1996 then came into force and repealed the Arbitration (Protocol and Convention) Act, 1937, The Arbitration Act, 1940, and the Foreign Awards (Recognition and Enforcement) Act, 1961 bringing, with certain important changes, domestic awards within Part I, foreign awards relatable to the New York Convention within Chapter I of Part II, and foreign awards relatable to the Geneva Convention within Chapter II of Part II. In the present Act, under Section 2(1)(c), arbitral award is defined as follows: 2. Definitions.-(1) In this Part, unless the context otherwise requires,- xxx xxx xxx (c) arbitral award includes an interim award; Section 44 in Chapter I of Part II defines a New York Convention award as follows: 44. Definition.-In this Chapter, unless the context otherwise requires, foreign award means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy thereof, duly authenticated in the manner required by the law of the country in which it was made; (b) the original agreement for arbitration or a duly certified copy thereof; and (c) such evidence as may be necessary to prove that the award is a foreign award. (2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India. Explanation.- In this section and in the sections following in this Chapter, Court means the High Court having original jurisdiction to decide the questions forming the subject-matter of the arbitral award if the same had been the subject-matter of a suit on its original civil jurisdiction and in other cases, in the High Court having jurisdiction to hear appeals from decrees of courts subordinate to such High Court. xxx xxx xxx 49. Enforcement of foreign awards.-Where the Court is satisfied that the foreign aw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation has arisen subsequently in order to apply the ratio of the said judgment. Further, we must not forget that the Indian Stamp Act, 1899 is a fiscal statute which must be construed literally. Any ambiguity in the said statute would enure to the benefit of the assessee who has to pay stamp duty. This being the case, Shri Viswanathan s argument based on the aforesaid judgment, must be rejected. 18. We now come to some of the judgments referred to by counsel for the parties. The Punjab and Haryana High Court judgment (supra), strongly relied upon by Shri Viswanathan, referred to and relied upon Section 3(c) of the Indian Stamp Act, 1899, and held that an instrument mentioned in the Schedule which is executed out of India, being a foreign award, would relate to a matter or thing done or not to be done in India, and that, therefore, stamp duty would be payable on such an award. It is important to note that this judgment does not refer to the definition of award in Item 12 of Schedule I at all. For this reason alone, this judgment cannot take us very much further, as it is clear that a foreign award, as has been held by us, is not contained within the expression award in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. On the other hand, the Madhya Pradesh High Court judgment (supra) hits nearer home. This judgment, in paragraph 12 thereof, states why foreign awards do not have to suffer stamp duty in the following terms: 12. The Law on Arbitration in India was substantially contained in three enactments namely, The Arbitration Act, 1940, The Arbitration (Protocol and Convention) Act, 1937 and The Foreign Awards (Recognition and Enforcement) Act, 1961. It was widely felt the 1940 Act, which contains the General Law of Arbitration, has become outdated. The Arbitration and Conciliation Act, 1996 came in force to consolidate and amend the Law relating to Domestic Arbitrations, International Commercial Arbitration, enforcement of foreign arbitral awards and to define the law relating to conciliation, commission on international trade in short (UNCITRAL) Model Law and Rules. Apart from other object, the object of the Act is to provide that every final arbitral award is enforced in the same manner as if it were a decree of the Court. While Arbitration and Conciliation Act, 1996 was enforced, no amendment was made in the definition of award given in the Indian Stamp Act. Similarly, the Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement of domestic arbitral awards. 23. There is no doubt whatsoever that if stamp duties are leviable in India on foreign awards, the imposition should not be substantially more onerous than the stamp duty that is imposed on recognition or enforcement of domestic arbitral awards. For the said Article to apply, stamp duty must first be leviable on a foreign award, which, as we have held earlier in this judgment, is not the case. Equally, reliance upon the 194th Law Commission of India Report, insofar as stamp duty on domestic awards is concerned, would again have little bearing, given our finding that under the present state of the law, foreign awards are not liable to stamp duty under the Indian Stamp Act, 1899. 24. An argument was made by learned counsel for the Respondent that Section 47 of the Act requires three things and only three things to be produced before the Court for enforcement of a foreign award, and that therefore, stamp duty not being one of the three things required, cannot ever be levied. We are afraid that this again is an extreme argument. All that Section 47 deals with is production before the Court of proof of the fact that a foreign award is sought ..... X X X X Extracts X X X X X X X X Extracts X X X X
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