A foreign award without the stamp duty would not render it unenforceable
[Case Brief] M/S SHRIRAM EPC LIMITED V/S RIOGLASS
SOLAR SA
Case name: M/S SHRIRAM EPC LIMITED V/S RIOGLASS
SOLAR SA
Case number: CIVIL APPEAL NO. 9515 of 2018
Court: THE SUPREME COURT OF INDIA
Bench: Justice R. F. Nariman
Justice Indu Malhotra
Decided on: September 13, 2018
Relevant Section 34 , 48, 49 Arbitration and Conciliation Act, 1996
Act/Sections: Section 1 Indian Stamp Act 1899
BRIEF FACTS AND PROCEDURAL HISTORY:
1. An ICC award was delivered in London on February 12 2015 by Mr. Christopher
Style QC after considering all the factual and legal submissions it was stated Rioglass is
not obliged to a performance Back Guarantee as provided in the Clause 6 of the
agreement.
2. It was declared that Rioglass is entitled to sell the mirrors as scrap that it was holding in
storage in relation to delivery four.
3. As Shriram acted in breach of the agreement therefore it was ordered that Shriram is
liable to pay Rioglass a sum of €4,366,598.70 which consists of damages amounting to
€4,151,570.52 and interest amounting to €215,028.18.
4. The procedural history is :
a. On July 21 2015 objections under Section 34 of the Arbitration and
Conciliation Act 1996 were filed by the appellant which was dismissed on
September 27 2016 and it was stated that a petition under Section 34 would not
be maintainable as against a foreign award.
b. The respondent filed petition under Section 47 of the Arbitration and Conciliation
Act 1996 on August 5 2015 to enforce the said award and all the objections
regarding the award rejected by the Judge on February 9 2017.
c. An Appeal was made to the Division Bench which resulted in an order passed on
March 14 2018 and it was stated that in view of Section 50 of the Arbitration and
Conciliation Act 1996. The appeal was not maintainable.
ISSUE BEFORE THE COURT:
1. Whether the term 'award' will include a foreign award under the provisions of the Indian
Stamp Act, 1899 ?
2. Can an unstamped foreign award be enforced under Section 48 and 49 of the Arbitration
and Conciliation Act ?
RATIO OF THE COURT:
1. Counsel for the appellant argued that Article 3 of the New York conventions makes it
clear that the stamp duty being in nature of fees for charges for recognition and
enforcement of a foreign award and to be enforced in accordance with the rules and
procedures of the territory in which the award is sought to be enforced.
2. Counsel for the respondent argued that the term award which occurs in the Indian Stamp
Act applies only to a domestic award and not on a foreign award and therefore the term
award in the Indian stamp act had never been and last to include foreign awards.
3. Further it was also stated by the Respondents counsel that the requirement for the
enforcement of a foreign award is laid down in Section 47 of the Act and also under
Section 48(2)(b) of the Indian Stamp Act.
4. The Court observed that in order to determine whether the expression award would
include a foreign award it is important to note the history of arbitration in India as the
arbitration at that time of Indian stamp act in 1899 there were only two sets of law
dealing with Arbitration and both was in the Code of Civil Procedure 1882.
5. The Court after observing the Indian Arbitration Act 1899 and the Indian Stamp Act 1899
came to the view that that the tem 'award’ had never included a foreign award from the
very inception till date .
6. The Court observed the case of Narayan Trading Co. vs. Abcom Trading Pvt. Ltd.
and stated that foreign awards do not have to suffer stamp duty because when the
arbitration act was enforced no amendment was made in terms of award given and
nothing was mentioned for the foreign awards in the Indian Stamp Act .
7. The Court also stated that even the section 47 of the Act does not require the award to be
stamped, it also does not prohibit payment if it is otherwise payable by law.
8. It was also stated by the Court that the Indian Stamp act 1899 was a fiscal statute and it
certainly reflects the fundamental policy of Indian law and consequently foreign awards
were not included in the schedule 1 of the Indian stamp act 1899 and further does not
become unenforceable on not paying for the stamp duty.
9. The Court upheld the decision of the Madras High Court and held that even if a foreign
award has not bond stamp duty under the Indian stamp act 1899 this would not rendered
unenforceable.
DECISION HELD BY COURT:
1. The appeal accordingly stands dismissed .
-Author : Aditya Das.
