{"id":304327,"date":"2023-10-11T10:00:33","date_gmt":"2023-10-11T04:30:33","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=304327"},"modified":"2023-12-13T10:25:33","modified_gmt":"2023-12-13T04:55:33","slug":"supreme-court-7-judge-bench-to-reconsider-whether-unstamped-arbitration-agreements-valid","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/10\/11\/supreme-court-7-judge-bench-to-reconsider-whether-unstamped-arbitration-agreements-valid\/","title":{"rendered":"7-Judge Bench of Supreme Court all set to reconsider whether unstamped arbitration agreements are valid in law"},"content":{"rendered":"<div style=\"text-align: justify; line-height: 150%;\">\n<p style=\"margin-bottom: 3%;\">On 14-02-2020, a 3 Judge Bench comprising of former Chief Justice SA Bobde, Justice BR Gavai and Justice Surya Kant in <span style=\"font-style: italic;\">Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram<\/span> v. <span style=\"font-style: italic;\">Bhaskar Raju &amp; Bros.<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/T8U88HkE\" target=\"_blank\" rel=\"noopener\">(2020) 4 SCC 612<\/a>, while setting aside the judgment and order of the Karnataka High Court in <span style=\"font-style: italic;\">Bhaskar Raju &amp; Brothers<\/span> v. <span style=\"font-style: italic;\">Dhamaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram &amp; Other Charities<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/aR5dat4p\" target=\"_blank\" rel=\"noopener\">2014 SCC OnLine Kar 8629<\/a> has held that the lease deed containing the arbitration clause which was required to be duly stamped , was not sufficiently stamped and though the registrar had directed the respondents to pay the stamp duty and penalty , the respondents failed to do so. Thus, the High Court erred in relying on the lease deed. Thus, an arbitration clause in an insufficiently stamped agreement cannot be acted upon by the court.<\/p>\n<p style=\"margin-bottom: 3%;\">In April 2023 , in the case of <span style=\"font-style: italic;\">N.N. Global Mercantile Pvt. Ltd.<\/span> v. <span style=\"font-style: italic;\">Indo Unique Flame Ltd.<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/R2kQP09S\" target=\"_blank\" rel=\"noopener\">2023 SCC OnLine SC 495<\/a>, an appeal against a three judge bench judgment in <span style=\"font-style: italic;\">N.N. Global Mercantile (P) Ltd.<\/span> v. <span style=\"font-style: italic;\">Indo Unique Flame Ltd.<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/0YbF0C3M\" target=\"_blank\" rel=\"noopener\">(2021) 4 SCC 379<\/a>, primarily challenging the non-admissibility of an unstamped arbitration agreement and judicial Court\u2019s intervention in matters of arbitration, the 5-Judge Bench comprising of K.M. Joseph, Ajay Rastogi, Aniruddha Bose, Hrishikesh Roy and C.T. Ravikumar, JJ. by a 3:2 majority, held that unstamped arbitration agreements are not valid in law. While KM Joseph, Aniruddha Bose and C.T Ravikumar, JJ. formed the majority, Ajay Rastogi and Hrishikesh Roy, JJ. dissented and opined that unstamped arbitration agreements are valid at the pre-referral stage.<\/p>\n<p style=\"margin-bottom: 3%;\">The Court in NN Global case (5Judge Bench), said that the view taken in <span style=\"font-style: italic;\">SMS Tea Estates (P) Ltd.<\/span> v. <span style=\"font-style: italic;\">Chandmari Tea Co. (P) Ltd.<\/span>, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/T0o3LPRd\" target=\"_blank\" rel=\"noopener\">(2011) 14 SCC 66<\/a>, as followed in <span style=\"font-style: italic;\">Garware Wall Ropes Ltd.<\/span> v. <span style=\"font-style: italic;\">Coastal Marine Constructions and Engineering Limited<\/span>, <a href=\"https:\/\/www.scconline.com\/DocumentLink.aspx?q=JTXT-9000297933\" target=\"_blank\" rel=\"noopener\">(2019) 9 SCC 209<\/a> and by the Bench in Dharmaratnakara Rai Bahadur (supra) as to the effect of an unstamped contract containing an arbitration agreement and the steps to be taken by the Court, represent the correct position in law. Further, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/0YbF0C3M\" target=\"_blank\" rel=\"noopener\">N.N. Global<\/a> (supra) (3 Judge Bench) was wrongly decided, when it held that arbitration agreement being a separate and distinct agreement from the underlying commercial contract would survive independent of the substantive contract and the arbitration agreement would not be rendered invalid , and overruled SMS Tea Estates (supra) and Garware (supra).<\/p>\n<p style=\"font-weight: bold;\">Also Read:<\/p>\n<p style=\"margin-left: 18pt;\"><a href=\"https:\/\/www.scconline.com\/blog\/post\/2023\/04\/25\/unstamped-arbitration-agreements-are-not-valid-in-law-supreme-court-legal-research-legal-news-updates\/\" target=\"_blank\" rel=\"noopener\">[Majority View] Unstamped Arbitration Agreements are not valid in law: Supreme Court<\/a><\/p>\n<p style=\"margin-left: 18pt; margin-bottom: 3%;\"><a href=\"https:\/\/www.scconline.com\/blog\/post\/2023\/04\/27\/we-dissent-here-why-2-out-of-5-judges-of-supreme-court-ruled-unstamped-arbitration-agreements-are-valid-in-law-legal-research-legal-news-updates\/\" target=\"_blank\" rel=\"noopener\">We Dissent! Here\u2019s why 2 out of 5 Judges of Supreme Court ruled unstamped arbitration agreements are valid at pre-referral stage<\/a><\/p>\n<p style=\"margin-bottom: 3%;\">Having regard to larger ramifications of NN Global case, the Supreme Court viewed that proceedings should be placed before a seven-judge bench to reconsider the correctness of the view by a five-judge bench.<\/p>\n<p style=\"margin-bottom: 3%;\">Thus, while hearing a curative petition, the 5 Judge Bench comprising of Dr. DY Chandrachud, C.J. Sanjay Kishan Kaul, Sanjiv Khanna, B R Gavai and Surya Kant, JJ. constituted a 7 Judge bench comprising of Dr. DY Chandrachud, C.J., SK Kaul, Sanjiv Khanna, BR Gavai, Surya Kant, JB Pardiwala, and Manoj Misra, JJ. to hear the judgment relating to unstamped arbitration agreements. The Bench will commence its hearing from 11-10-2023.<\/p>\n<p style=\"font-weight: bold;\">Also Read:<\/p>\n<p style=\"margin-bottom: 3%;\"><a href=\"https:\/\/www.scconline.com\/blog\/post\/2023\/05\/13\/necessity-of-stamping-of-arbitration-agreements-is-the-conundrum-solved\/\" target=\"_blank\" rel=\"noopener\">Necessity of Stamping of Arbitration Agreements: Is the Conundrum Solved?<\/a><\/p>\n<p style=\"margin-bottom: 3%;\"><a href=\"https:\/\/www.scconline.com\/blog\/post\/2023\/04\/28\/n-n-global-dictum-has-the-stamping-issues-resolution-opened-a-pandora-box\/\" target=\"_blank\" rel=\"noopener\">N.N. Global Dictum: Has the Stamping Issue\u2019s Resolution Opened a Pandora Box?<\/a><\/p>\n<p style=\"margin-bottom: 3%;\">[<span style=\"font-weight: bold; color: #632423;\">Bhaskar Raju &amp; Brothers v. Dharmaratnakara Rai Bahadur Arcot Narainswamy Mudaliar Chattram Other Charities, <a href=\"http:\/\/www.scconline.com\/DocumentLink\/d2A776b4\" target=\"_blank\" rel=\"noopener\">2023 SCC OnLine SC 1303<\/a>, Order dated 26-09-2023<\/span>]<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p style=\"font-style: italic;\">Having regard to larger ramifications of NN Global case, the Supreme Court viewed that proceedings should be placed before a seven-judge bench to reconsider the correctness of the view by a five-judge bench.<\/p>\n","protected":false},"author":67512,"featured_media":304334,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,9],"tags":[3226,33715,61402,61796,5363,57113,4041],"class_list":["post-304327","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-supremecourt","tag-arbitration","tag-curative-petition","tag-nn-global","tag-seven-judge-bench","tag-supreme-court","tag-unstamped-arbitration-agreement","tag-validity"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Supreme Court 7-Judge Bench all set to reconsider whether unstamped arbitration agreements are valid in law | SCC Blog<\/title>\n<meta name=\"description\" content=\"Whether unstamped arbitration 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