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Section 9 of AA application for interim measures is maintainable even if there is legal deficiency of insufficiently stamped or unstamped Arbitration Agreement

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Section 9 of the Arbitration Act – Application for Interim Measures – legal deficiency of insufficiently stamped or unstamped Arbitration Agreement

Once again the question of consideration of insufficiently stamped or unstamped arbitration agreement came up before the Hon’ble High Court in the background of judgment of the Supreme Court in N.N.Global case.

The important question raised in the matter is that an unstamped agreement is not “stillborn” but it requires determination of the Court before it is declared as unenforceable.

HELD that the petition under Section 9 is different from the application under Section 11 and both the provisions operate in distinct fields.   The judgment of the SC in N.N.Global case was on section 11 of the AA by virtue of an agreement within the meaning of Section 7 of the Act which attracts stamp duty but no stamped or insufficiently stamped.   It was ruled that such an agreement cannot be acted upon in view of Section 35 of the Stamp Act.

An insufficiently or unstamped agreement shall not preclude the party seeking interim measures under Section 9 of the Act which is not the stage for the determination of said issue.   Section 9 petition is not a stage for determination of sufficiency or non-sufficiency of stamp duty as distinct from Section 11 application stage.

Order dated 27.10.2023 (uploaded on 9.11.20203) in Commercial Arbitration Petition No.1430 of 2019 L & T Finance Limited Vs. Diamond Projects Limited and others with connected matters.

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