Interim Arbitral Award on Application of Stamp Act to the Loan Agreements
Comments on the post of Bar Bulletin and the Judgment dated 2.11.2026 of the High Court of Delhi in O.M.P. (COMM) 253/2026 of Asian Satellite Broadcast Pvt Ltd and another Vs. Religare Finvest Limited and another with connected matters.
The present petitions revolve around a single issue, i.e., whether MSA or ISA6 shall apply to the loan agreement(s) dated 15.03.2014? An ancillary question arises: if MSA is to apply, then which provision governs the applicable rate of stamp duty?
The question of adequate stamp duty on the loan agreement(s) dated 15.03.2014 arose before the learned Sole Arbitrator in the first round of arbitration in the Section 16 application filed by the Zee Group.
By the common interim arbitral award dated 28.02.20262, whereby the learned Sole Arbitrator held that the loan agreements executed between the parties dated 15.03.2014, are governed by the Maharashtra Stamp Act of 19583. The learned Sole Arbitrator further held that Article 5(h)(B) of Schedule I to the MSA is applicable to these agreements, thereby attracting a fixed stamp duty of Rs. 100/- each.
By the impugned award, the learned Arbitrator only gave reasoning pertaining to Issue Nos. 3 and 4. It was held that MSA was applicable and that the stamp duty was sufficient as per Article 5(h) B, therefore, there arose no question of impounding the agreements. 118. Therefore, in light of the ratio in IFFCO (supra) and MCM Worldwide (supra), such determination of preliminary issues framed amounts to an interim award under Section 31(6) of the Act as it finally decides an issue inter se the parties and would not be revisited at the stage of final award. Therefore, it must be challenged under Section 34 of the Act.
- Accordingly, in the opinion of this Court, the present batch of cross objection petitions filed under Section 34 of the Act are maintainable.
This Court is of the considered view that the traditional understanding of “execution”, developed in an era when instruments were ordinarily prepared, stamped and signed in physical form, cannot be mechanically applied to modern digital transactions without examining the consequences of such an interpretation.
The mere physical presence of one contracting party within a State may not conclusively constitute a deciding factor for imposing stamp duty upon an otherwise wholly foreign instrument.
Therefore, in light of the foregoing discussion and considering the scheme of MSA and ISA and the discussion above, the loan agreements dated 15.03.2014 are held to be “executed” in Delhi. A logical corollary would be that the loan agreements are liable to be stamped as per ISA, as applicable in NCT of Delhi.
